U.S. Treasury Secretary Can’t Sell His N.Y. House

Tim Geithner, U.S. Treasury Secretary under President Barack Obama, is walking through a drama all to familiar to all to many ordinary Americans these days.

Geithner took a job out of state (Washington D.C.) and has been unable to sell his five bedroom, NY suburban home ever since, even after dropping the asking price to less than what he paid for it.

Originally on the market for $1.65 million, the price was of the Geithner home was dropped to $1.57 million a few weeks after being listed, but to no avail. On May 21st, Geithner’s realty firm finally rented the home out at $7500 per month.

The median price of a home in Geithner’s part of the U.S. was $170,500 in April of this year, down 15% from what it was in April of last year.

On the up side, existing home sales in the U.S. jumped 6.7% nationally in April, making April the third month running this year to show a sales increase. Even so, the glut of foreclosures on the market leads most analysts to believe recovery will be slow.

Sales vary wildly by locale, so foreign investors interested in getting into the market now should do lots of careful research with a licensed realtor familiar with neighborhoods and trends before taking the leap. In general, the West Coast is better than the East, and the Rust Belt continues to plummet (except in towns with a single major employer, for example, a military base or a multinational insurance center).

Treasury Secretary Tim Geithner's tony suburban NY house is now a rental

Luxury market home prices (like Geithner’s and upward) on the east coast are at historic lows but international buyers are still biding their time, watching for the market to bottom out.

At the same time the U.S. housing market is showing some preliminary signs of recovery, mortgage rates are beginning to rise and the foreclosure crisis is beginning to spread to prime buyers as well as subprime, due to the steadily rising unemployment rate. (Having great credit isn’t that helpful if no money is coming in.)

Making a decision on when to buy U.S. real estate in such turbulent times is not easy, and many American buyers are holding back, even with significant government incentives to buy now. Most of the homes that are currently selling are ‘distressed’ properties: repos, foreclosures, homes that have been bank-owned for awhile and have condition issues and other drawbacks.

It’s probably unfair to bring up Tim Geithner’s real estate issues and use that as any kind of yardstick regarding his performance of Treasury Secretary. It’s unfair, but hard to resist.

When the Secretary of the U.S. Treasury is finally able to sell his own high end, formerly incredibly desirable piece of NY real estate, the U.S. might finally be able to look forward to some better times.