The country is finally starting to see some positive signs in the housing market. But don't tell that to Treasury Secretary Tim Geithner or the countless other Americans who still can't sell their homes.
After leaving the tony New York City suburb of Mamaroneck to take his new post in Washington, D.C., Geithner put his five-bedroom Tudor home on the market for $1.635 million.
That was in February. By May, he cut the price $60,000 but still got no takers. A few weeks later, May 21, the home in New York's Westchester County was reportedly rented for $7,500 a month.
"Mr. Geithner's house is a textbook example of what is happening in the market here," said Leah Caro, president of Bronxville-Ley Real Estate and president of the Westchester Board of Realtors. "Many sellers are bringing their houses on [the market], finding that they don't have a buyer for it, making price adjustments in hope of luring a buyer into the marketplace. In the case of Mr. Geithner, he had to move. And renting was his best option."
Many properties in the suburbs north of New York City are on the market both for rentals and sale, real estate agents there said.
"Sellers who are trying to sell their houses and may not be able to, have decided that getting some money every month is better than getting no money, particularly in the case of vacant homes or owners who are relocating," Caro said.
And while $7,500 a month might seem a lot to rent Geithner's 3,600-square-foot home that includes an eat-in kitchen with black granite countertops, it probably falls short of his monthly expenses for the house.
Records show Geithner and his wife, Carole Sonnenfeld Geithner, paid $1.602 million for the home in 2004. The couple have two loans totaling $1.25 million and pay about $27,000 a year in property taxes.
Scott Stiefvater of Stiefvater Real Estate in nearby Pelham, N.Y., said that rentals right now are surpassing the sales.
The question is whether the rental prices cover the cost of mortgages.
"In some cases, yes, in some cases, no. Like Geithner, I don't think his is covering it," Stiefvater said.
Neither Stiefvater nor Caro were involved in the sale or rental of Geithner's house.
Treasury Department representatives didn't respond to requests for comment. Neither did Geithner's broker, Candy Steiner of Houlihan Lawrence Real Estate.
June marked the fourth consecutive month that the pace of home sales nationally rose, the National Association of Realtors reported last week.
But many homeowners are still sitting on the sidelines, choosing to rent instead.
"The renters are coming in in droves. There are people coming in from Argentina, London, all over the country, all over the world and they're coming to Westchester and they're looking to rent before they buy," Stiefvater said. "People are still waiting for the bottom and they just haven't seen the bottom, so they don't want to invest all their money in real estate yet."
Some people are signing rental leases with the possibility of buying at the end of the rental term, he said. Other clients come in and try to see which of the sellers might be willing to, instead, rent.