On The Daily Show last week, John Oliver explored the difficulty Treasury Secretary Tim Geithner is having selling his house. It was funny! But was it true? Geithner or his broker might have been lying a little bit! [UPDATE: Corrected.]
Correction: So we got this totally wrong. The price listed above was the last sale price when Geithner bought the house. He bought it in 2004 for... $1,601,700. But this is the best part, that The Daily Show didn't mention: Geithner bought the house, at the height of the bubble, from Goldman Sachs Vice President Michael Millette.
Millette might have not put the house on the market when he sold it to Geithner, which would maybe explain why the 2004 sale price wasn't mentioned on the property report we saw.
Additionally, the day Geithner bought the house, he took out a $250k home equity line of credit.
After hosing Geithner, Millette bought a $1.3 million home in New Rochelle. Then he donated $2,300 to John McCain.
We were wrong, obviously, about all of this, and we apologize for accusing anyone of lying. Also we apologize for thinking Geithner was canny about real estate.
According to John Oliver, Geithner bought this Westchester house for $1.6 million in 2004. Once he got the new gig in DC, he put it on the market, asking $1.635 million. So the joke is that he bought at the height of the (Fed-approved) bubble and is now, in this shitty marker, asking for even more money. Even the realtor, Ms. Debbie Meiliken, says he's asking way too much!
But! According to the public records, Geither and his wife bought the Larchmont, NY house in 1998. For $705,000.
So someone just made up the $1.6 million in 2004 thing. And Geithner is maybe not as clueless about this real estate thing as it seemed!
According to another Westchester real estate broker, who contacted us, Geither's renting out the house for $7,500 a month. So, you know, the house can stay on the market for a while, as he's making 9.7% on his initial investment. Or more!
Since he also holds a $515,000 mortgage on the property, he is likely netting much more than that, because the lending rate at the time was no greater than 5.5%. Assuming he took a 30 year mortgage, Mr. Geithner is now making 17.89% on his initial investment of $190,000. This does not include amortization.
So don't worry: you can totally trust Geithner to fix the housing crisis now. And if you're facing foreclosure, rent your house out and move to Washington.