The real estate market's troubles are hitting close to home for Treasury Secretary Timothy Geithner.
After reducing the price on his house in a tony New York City suburb to less than he paid for it, Geithner still couldn't sell and recently rented it out instead, according to real estate agents familiar with the deal.
Geithner put his five-bedroom Tudor near leafy Larchmont on the market for $1.635 million in February, after heading to Washington for his job as the nation's top economic official.
A few weeks after the asking price was dropped to $1.575 million, the home was rented for $7,500 a month on May 21, said the agents, Scott Stiefvater of Stiefvater Real Estate and Debbie Meiliken of Keller Williams Realty New York.
Neither was directly involved in the rental; the name of the broker and agency that arranged it were not immediately available.
Although $7,500 might seem like a lot of rent, it probably falls a bit short of the monthly mortgage payments on the Geithners' two loans totaling $1.25 million, plus $27,000 a year in property taxes.
Treasury Department representatives didn't immediately return calls about Geithner's home Monday and Tuesday. He was in Beijing for talks with Chinese leaders.
Records show Geithner and his wife, Carole Sonnenfeld Geithner, paid $1.602 million for the home in 2004.
The roller-coaster housing market helped spawn the recession Geithner is tasked with ending. Nationwide, the median home price in April — $170,200 — was more than 15 percent lower than in the same month last year.
Prices have declined at about the same rate in Geithner's home base of Westchester County, which includes a string of upscale suburbs north of New York City. At $532,000, the median Westchester home price in the first quarter of this year is at a level last seen in 2003, according to the Westchester-Putnam Multiple Listing Service. Sales have been especially slow in the $1 million-plus range, the real estate information service said.
Despite some signs of a national housing-market turnaround, analysts expect prices to take some time to stabilize because of the overload of homes available.
In the meantime, many homeowners, like the Geithners, are deciding to rent their properties, brokers say.
Some are buying themselves time to wait for prices to rise. Others are trying to cut the cost of carrying their unsold homes, even if their tenants' rent doesn't entirely cover it.
"There are people who just cannot come down off their asking price because they just cannot afford to lose $200,000 or $300,000, so they're saying, 'Let me just put a Band-Aid on it temporarily,'" Stiefvater said. "Losing a couple of thousand versus $5,000 or $6,000 a month, that's a lot better."
Geithner, 47, was president of the Federal Reserve Bank of New York before becoming treasury secretary.
His Westchester home has a Larchmont mailing address but is just outside the village boundaries in the town of Mamaroneck, a yachting hub and the home of the Winged Foot Golf Club, a frequent site of professional championships.
The 1931 home has been renovated, making it appealing to renters looking for a ready-to-move-in home, Meiliken said.
"Geithner's house was definitely something that you could be happy to live in for a while without having to put any money in it," she said.