One57

The two-level penthouse features glass walls that offer near-panoramic park views.

What real estate downturn? A two-level penthouse with sweeping views of Central Park just sold for more than $90 million — a record price for New York, according to the New York Times. At nearly 11,000 square feet, the apartment takes up the top two floors of the 90-story One57 building, which will include 92 residences and a Park Hyatt hotel when it opens next year.

One57

At nearly 11,000 square feet, the apartment takes up the top two floors of the 90-story One57 building.

A spokeswoman for the building said the exact price was subject to a confidentiality agreement, but that it was less than $100 million. The penthouse was listed at $98.5 million when the buyer agreed to purchase it three months ago. 

That unnamed buyer is getting a lot for the approximately $8,000 per square foot they agreed to pay. The six-bedroom, eight-bathroom penthouse includes four fireplaces, a "grand salon" with 23-foot ceilings and glass walls that offer near-panoramic park views. The kitchen has handmade cabinets, granite counters, Miele appliances and a 132-bottle wine refrigerator. 

Developer Gary Barnett declined to identify the buyer to the Times, only specifying that they didn't hail from Russia or any former Soviet state. He referred to them as a "very nice family" and said "people would recognize" them, according to the newspaper.

One57

The six-bedroom, eight-bathroom penthouse includes four fireplaces, a "grand salon" with 23-foot ceilings.

Suhaimi Abdullah / Getty Images

The Merlion, a symbol of Singapore, is lit up in front of the central business district. The city, one of the world's most competitive, also has the largest GDP per capita anywhere.

The votes are in and London is the most important city in the world -- at least, according to the ultra-wealthy. The Wealth Report, a new study by Knight Frank Research and Citi Private Bank, breaks down the 10 international cities that high-net-worth individuals consider the most important. 24/7 Wall St. examined the list to identify what it is that makes these cities exceptional.

The report surveyed individuals worth more than $25 million in investable assets to find which cities impress them the most. The survey focused on several factors that can make cities important, including economic activity, political power, knowledge and influence and quality of life.

A number of cities on the list are traditional hubs for business. New York and London, which sit at the top of list, are considered global financial centers. They are also important to the wealthy for other reasons, including good markets for luxury housing, strong educational resources, social stability, economic openness and personal safety.

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The list also features cities in countries with emerging economies, although they generally rank lower than the established Western urban centers. Beijing and Shanghai, while already two economic powerhouses, are quickly becoming important and represent fierce competition for the old guard. In fact, a number of leading commentators believe Shanghai will be the most important city in 2050.

For each city among the top 10, 24/7 Wall St. included its estimated rank in 10 years. We included the average price of prime property for each city as well. Prime property is defined as “a location’s most desirable, and usually most expensive, property,” the price of which often reflects demand among the world’s wealthiest individuals. We also included the population of each city’s metropolitan area, which includes surrounding suburbs, based on data from the United Nations. That the cities vary in size reflects the fact that what is important to the rich does not necessarily translate to universal popularity.

These are the most popular cities of the ultra-rich.

1. London

• Estimated rank in 10 years: 1
• Avg. prime property price: $4,500/sq. ft. (3rd most)
• Population: 8,631,325 (30th most)

London, which is one of the world’s top financial centers, is considered the most important city by high-net-worth individuals -- and by a significant margin. It ranks the highest in economic activity, knowledge and influence, and quality of life categories. It is second in political power, behind only Washington, D.C. The city has an abundant supply of luxury housing, top-tier educational opportunities and a large population of the ultra-wealthy -- all characteristics that appeal to the rich. Despite competition from emerging Asian nations, London is expected to maintain its top position for the next 10 years.

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2. New York

• Estimated rank in 10 years: 2
• Avg. prime property price: $2,200/sq. ft. (Manhattan) (17th most)
• Population: 19,425,069 (New York-Newark) (6th most)

New York is ranked second in both the economic activity and knowledge and influence categories. It is ranked third in the quality of life and political power categories. In 10 years, the city is expected to remain as the second-most important city. David Adam, managing director at Global Cities, notes in The Wealth Report that New York’s ability to attract a significant foreign workforce will keep it on top.

3. Hong Kong

• Estimated rank in 10 years: 6
• Avg. prime property price: $4,400/sq. ft. (4th most)
• Population: 7,069,378 (38th most)

Hong Kong is seen as one of the world’s most important economic centers. At $45,301, it has the world’s fourth-largest GDP per capita and is expected to have the second-largest GDP per capita by 2050. Hong Kong is also very highly rated in the quality of life and knowledge and influence categories. The average price per square foot in the city is the fourth-highest for houses and the 10th-highest for apartments.

4. Paris

• Estimated rank in 10 years: 7
• Avg. prime property price: $2,500/sq. ft. (11th most)
• Population: 10,485,263 (21st most)

Paris performs fairly well in all leadership categories considered by The Wealth Report. The city also has the 11th-most expensive prime property values. According to the report, Paris has long been a popular center for real estate investments by foreigners. Since 2009, prime office rentals have increased by 17 percent. The city is also a major destination for business and tourism. In 10 years, however, the city is expected to fall behind Beijing, Shanghai and Singapore in importance.

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5. Singapore

• Estimated rank in 10 years: 5
• Avg. prime property price: $2,400/sq. ft. (13th most)
• Population: 4,836,691 (60th most)

Singapore is considered to have the second-highest quality of life. It ranks fifth-highest in economic activity, eighth-highest in knowledge and influence and eleventh-highest in political power. Singapore also is listed among the cities growing fastest in importance. The city currently has the largest GDP per capita in the world at $56,532 per person. It is expected to maintain this position through 2050. According to data from the Economist Intelligence Unit, Singapore is one of the most competitive cities in the world, along with New York and London.

Click here to read the rest of the top 10 cities most favored by the ultra-rich.

Brown Harris Stevens

The view from Huguette Clark's apartment 8W, which still could be yours. The asking price is $19 million.

NEW YORK — One of the three mysterious apartments of copper heiress Huguette M. Clark has sold for an undisclosed price. Her top-floor apartment, with 5,000 square feet of space overlooking Central Park, was on the market for $24 million, the most expensive of the three.

The signing of a contract for apartment 12W was confirmed Monday by broker Mary Rutherfurd of Brown Harris Stevens, an exclusive affiliate of Christie's International Real Estate. The apartments have been on the market for less than a month.

Still available: apartment 8W, also with a park view, at $19 million, and 8E, listed at $12 million.

You can see the floor plans and descriptions of the apartments in our earlier story.

The three apartments cost the reclusive heiress to a Montana copper fortune $28,500 a month in co-op fees, or $342,000 a year, while she lived for two decades in New York hospital rooms. Huguette Marcelle Clark has been the subject of a series of reports on msnbc.com about her vacant properties and the management of her fortune. When she died last May at age 104, she owned three apartments at 907 Fifth Avenue, at 72nd Street, in addition to an oceanfront estate in Santa Barbara, Calif., with an estimated value of $100 million, and a country house in New Canaan, Conn., recently put back on the market by the same broker at $19.8 million.

The auction of the Clark jewelry collection, at Christie's New York, is scheduled for April 17. A slideshow of the Clark jewels is available at the home page for our Clark mystery series.

When the apartments and jewelry sell, some of the money will be used to pay estate expenses, with the rest will be held for the eventual winner of the legal battle. On one side are members of the Clark family, grandchildren of her father from his first marriage, whom she included in one will and then cut out of her last. On the other side are her attorney, accountant, nurse and favorite museum, the Corcoran Gallery of Art in Washington, which were all named in the second will, which left the largest portion of her estate to create an art museum in her California home, with the next largest piece going to her nurse.

Slideshow: A look at Huguette Clark's jewelry collection

Christie's, New York

Freed from their bank vault by the executor of the estate, the jewels of copper heiress Huguette Clark go on sale at Christie's New York on April 17, including a rare pink diamond and these emerald, pearl and diamond ear pendants. Which piece do you prefer?

Launch slideshow

Marc Serota / Getty Images

No state has a vacancy rate higher than Florida, standing at more than 20 percent. The metro area of Miami, shown here, has a population of some 5.5 million.

As home prices continue to slide, more and more homeowners find themselves owing more on their homes than those houses are worth. The slowing level of foreclosure activity last year only exacerbated the problem, leaving more homes in trouble on the market.

Last week, Corelogic reported that the number of underwater mortgages as a percentage of all mortgaged homes rose in the fourth quarter of 2011 to its highest level since 2009, the first year the property analytics provider began reporting the data.

According to Corelogic’s Negative Equity report, the mortgages on more than 11.1 million homes, or 22.8 percent of the nation’s 48.7 million mortgaged homes, are underwater. Based on Corelogic’s report, 24/7 Wall St. identified the 10 states with the highest percentage of underwater mortgages.

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Some of the states with a high percentage of underwater mortgages had economic problems long before the recent recession. States such as Michigan and Rhode Island have experienced long-term industrial declines for some time. In these areas, drops in home values were only accelerated by the recession.

For most of the states on the list, however, a decline in home values is the main reason homeowners suddenly found themselves owing more on the their houses than they are worth. These states, which include Nevada and Arizona, experienced some of the biggest housing booms in the country. Many homeowners took out mortgages when home values were at their highest. The plunge in housing values was just as big, though. As a result, nearly half of all mortgages in these states are underwater.

Being underwater does not ensure financial disaster for homeowners -- so long as they are otherwise financially secure. In states like Virginia, for example, high median income and low unemployment has contributed to a relatively low rate of homes that are 90 days or more late on their payments, or are in foreclosure. This is despite the fact that 23 percent of the state’s mortgages are underwater, the 10th-highest rate in the country.

Most of the states on the list, however, are not as fortunate as Virginia. Seven of the 10 worst-off states have unemployment rates above the national average. Six of them have median household incomes below the national average. According to Fiserv’s home price projections, nine of the 10 states on this list will continue to see home values fall substantially through the third quarter of this year.

24/7 Wall St. relied on Corelogic’s Q4 2011 Negative Equity report to determine the states with the highest percentage of mortgages with negative equity. Because of sample size, seven states were excluded from their results. These states, which include Wyoming and Vermont, account for fewer than 5 percent of the total U.S. population.

In our own analysis, we examined a variety of metrics. We included December unemployment rates provided by the Bureau of Labor Statistics and median income, median home value and poverty rate from the U.S. Census Bureau. Declines in home value from peak to fourth quarter of 2011 is from FHFA. Fourth-quarter 2011 delinquency (90-plus days) and foreclosure rates are from Corelogic. Forecast changes in home value by state are from Fiserv.

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1. Nevada

•  Percent homes underwater: 61.1 percent
•  Total property value: $96.57 billion
•  Mortgage debt outstanding: $109.94 billion
•  Median home value drop from peak: 60 percent (the biggest decline)
•  Homes in foreclosure or 90-plus days delinquent: 13.4 percent (second-largest percentage)

Like Arizona, Nevada’s property value has plummeted since the middle of the decade, losing more than $150,000 on average (more than 50 percent) in just five years. Nevada is also the only state in the country in which total homeowner debt is actually higher than the total property value of owned homes -- nearly two in three mortgaged homes are underwater. As of the end of 2011, 13.4 percent of mortgages were either already in the foreclosure process or more than 90 days delinquent on their payments.

2. Arizona

•  Percent homes underwater: 48.3 percent
•  Total property value: $243.02 billion
•  Mortgage debt outstanding: $226.22 billion
•  Median home value drop from peak: 47.9 percent (second-biggest decline)
•  Homes in foreclosure or 90-plus days delinquent: 7.1 percent (11th-largest percentage)

Through the first half of the decade, states such as Nevada, Utah and Arizona experienced record growth in population, business and, as a result, new construction. Conditions reversed in 2008, and the states that once led in property value growth and employment, like Arizona, fell through the floor. In the third quarter of 2006, Arizona had median home value of $254,655. To date, that value has dropped by more than $100,000. Some 48.3 percent of all mortgaged homes are now underwater.

3. Florida

•  Percent homes underwater: 44.2 percent
•  Total property value: $809.95 billion
•  Mortgage debt outstanding: $706.00 billion
•  Median home value drop from peak: 44.8 percent (fourth-biggest decline)
•  Homes in foreclosure or 90-plus days delinquent: 17.4 percent (the largest percentage)

No state has a larger gross vacancy rate than Florida, standing at more than 20 percent. When the housing market flourished, the state geared up for the impending retirement of millions of baby boomers by constructing tens of thousands of new homes. When the market collapsed, real estate investments in the state were hit hard. Florida’s home value has plummeted by more than 40 percent -- the second largest drop in the country -- and nearly one in two mortgaged homes are underwater.

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4. Michigan

•  Percent homes underwater: 34.7 percent
•  Total property value: $198.05 billion
•  Mortgage debt outstanding: $165.45 billion
•  Median home value drop from peak: 30.1 percent (fifth-biggest decline)
•  Homes in foreclosure or 90-plus days delinquent: 6.5 percent (19th-largest percentage)

Michigan’s economy and housing market was already in bad shape leading up to the recession, and things have only gotten worse. The state experienced a net loss in population between 2000 and 2010, the only state that lost residents during the period. Unemployment has improved somewhat in the past few years, but it is still the 10th-highest rate in the U.S. Michigan home value began to decline before the recession hit, after peaking in 2005. Since that time, home prices have dropped by 33 percent.

5. Georgia

•  Percent homes underwater: 33.0 percent
•  Total property value: $306.59 billion
•  Mortgage debt outstanding: $252.81 billion
•  Median home value drop from peak: 26 percent (10th-biggest decline)
•  Homes in foreclosure or 90-plus days delinquent: 8.0 percent (tied for fifth-largest percentage)

One-third of mortgage owners in Georgia have more mortgage debt than their homes are worth. Since the home values peaked in the state in 2007, prices have declined 26 percent. The state has the ninth-most mortgaged homes in the country and even more homes underwater. At 540,000 it has the fourth-most underwater mortgages of any state. Georgia’s unemployment rate is the ninth-highest in the country.

Click here to read the rest of 24/7 Wall St.'s "The 10 states sunk by underwater mortgages."

By Laura Vecsey, Zillow

With their musical achievements crafted in attics, basements, bungalows, Victorians, Jersey cottages and Hollywood mansions, the legends of pop, folk, alternative, rap and rock have shown that home may not be where the heart is, but it's definitely where the art is.

From the hills of Los Angeles to the lakes of Tennessee, some of America's most original and game-changing creators have called upon special, sometimes spiritual places to conjure their muses to bring forth the tunes.

With the 54th Grammys coming Sunday, we went on a magical mystery tour to uncover some of the iconic locales where award-winning music was inspired, written and recorded.

Grateful Dead

 710 Ashbury Street, San Francisco, Calif.

Flickr photo by elchicogris

Grateful Dead home.

The Summer of Love took place in 1967 in the center of the flower power universe: The Haight-Ashbury. And right in the thick of things was the Grateful Dead, who famously occupied 710 Ashbury Street (above) from 1966 until 1968. It was there that Jerry Garcia and the gang spawned not just a new music scene, but a new pop culture era that bent all the Establishment's rules.

Part of the Hayes Valley real estate market, this Victorian was the site of the Dead's famous drug bust in 1967. Garcia managed to move on to bigger and more spacious digs later in life, including this Marin County home that was listed for sale in 2010.

Jefferson Airplane

2400 Fulton Street, San Francisco, Calif.

Zillow

Jefferson Airplane house

Jefferson Airplane hit the scene in 1966, a year before the Dead, and occupied a similarly famous Haight-Ashbury dwelling -- a Victorian at 2400 Fulton St. that was right near Golden Gate Park. Airplane founder Marty Balin talked about the place in a video he shot in 2009, when he revisited the house that is now privately owned:

"Yup, 2400 Fulton Street. This was the Airplane mansion. This was our office and at one point, we all lived here. It was quite a party pad. We had the Dead, Big Brother, Janice and anybody else in town would come over. We had a pool table in there and we had a recording studio in the basement,'' Balin said.

The house figured so much into the Airplane's early days they named a record after it: 2400 Fulton Street.

Johnny Cash & June Carter Cash

200 Claudill Drive, Hendersonville, Tenn.

People.com

Johnny Cash in front of his lakeside home that later burned down.

One of the most famous homes in country music -- or any musical genre, given the reach of Johnny Cash's career -- was the home of Cash and his wife, June Carter Cash. The property figured in the Cash bio-pic, "Walk The Line" and for nearly all of their 35-year marriage, the Cash family lived in the massive, 13,880-square-foot home that ran along on Old Hickory Lake. The lake house was set on a solid rock foundation. The property had an outdoor swimming pool, bell garden, four 35-foot round rooms, seven bedrooms, and five full baths.

But it was more than a house. It was the spiritual home of Cash and the artistic and cultural universe he created, drawing likes of Bob Dylan, evangelist Billy Graham, Carl Perkins, Brooks & Dunn and other high priests and priestesses of the music, entertainment and political worlds. The place was memorialized in a song by Cash's daughter, Rosanne Cash, "House On The Lake."

After Johnny and June both died six months apart in 2003, the house was sold to singer Barry Gibbs and his wife, who were undertaking a massive renovation. Their plan was to pay homage to Cash and his legend by inhabiting the famous home, but that never happened. The home burned down during the remodel. The event prompted none less than the Oak Ridge Boys to remark that it might have been God's will; no one else but Johnny Cash was meant to live in that house.

Zillow

Johnny Cash spent his final days at this ranch house he owned across the street from his lake house.

What is less known, however, is that Cash wound up living in the house he owned across the street at 187 Claudill Drive. The ranch home (above) was built by the same architect, and Cash had used it to house his own parents prior to their passing.

"He spent his last days there after it was harder for him to get around in a wheelchair in lake house,'' said Stan Peacock, whose father-in-law -- a former Grand Ole Opry musician -- bought the house from the Cash family in 2004.

The ranch house, which was always referred to as "Mama Cash's house" because it was where Cash's mother lived, has been listed for sale for a modest $595,000. It once housed some very unique Cash mementos, including the Gold Record for Cash's major hit: "I Walk The Line.''

The Band at Big Pink

56 Parnassus Lane, West Saugerties, NY

BigPinkBasement.com

Big Pink House.

We're not sure there's a house so singularly identified with a band, The Band, and its iconic, genius collaborator, Bob Dylan, where an album was written and recorded and still celebrated for its dramatic and enduring success.

Welcome to "Music From Big Pink," where the house used by The Band generated one of the greatest albums of all-time. Located just outside of Woodstock in upstate New York, Big Pink was a rental property found by Band member, Rick Danko, who in turn brought in Dylan, who used the place as a retreat and place for experimentation that resulted in songs like "Chest Fever," "The Weight" and "Long, Black Veil." In addition to "Music From Big Pink," the pink-sided dwelling also spawned "The Basement Tapes.''

Since 1998, Big Pink has been owned by Don and Susan LaSala, who call themselves stewards of this musical shrine. Good thing, since many fans of The Band and Dylan continue to make pilgrimages to the grand, pink house of music.

The Mansion, owned by Rick Rubin

8134 Tianna Rd. Los Angeles, Calif.

Greg Headley

Uber-producer Rick Rubin's house.

He doesn't know how to work a sound board. He doesn't read music or play any instruments. But Rick Rubin knows what makes a good song and great records. That's why this producer is called a musical guru and his three-story, 1923 Spanish villa is considered one of the most deeply steeped venues in music history.

After starting Def Jam records with Russell Simmons, Rubin has continued to reinvent the music industry, marrying rap with metal and bringing in a variety of artists to record ground-breaking, career-shaping music in his mammoth studio: Johnny Cash, Neil Diamond, Jakob Dylan, Dixie Chicks, Slayer, Red Hot Chili Peppers, Jay-Z. While the guru now prefers to live on the beach at Malibu, his home continues to be a mecca for Grammy-making music.

Motown's Hitsville U.S.A.

2646 W. Grand Blvd., Detroit, Mich.

Zillow

Motown's first headquarters

This is the cradle of the Motown Sound. "Hitsville U.S.A." -- a former photographers' studio -- was Motown's first headquarters. Label founder Berry Gordy bought it in 1959. What came next was a recording studio where a non-stop creative churn filled the airwaves with a sound that changed radio and the music industry.

The lineup of artists included Smokey Robinson, Diana Ross & The Supremes, Stevie Wonder, the Jackson 5, Marvin Gaye, Tammi Terrell, The Four Tops and The Temptations, who won the recording studio its belated first Grammy in 1972 for "Papa Was A Rolling Stone."

While Gordy finally moved to Los Angeles to create Hitsville West, the Motown sound will always be known for its birthplace in the Motor City, where Gordy mirrored the assembly-line approach of the car industry -- to sweeter strains.

Kurt Cobain of Nirvana

171 Lake Washington Blvd. Seattle, Wash.

Flickr user Etsy Ketsy

Kurt Cobain's house, where the Nirvana frontman committed suicide in 1994.

Unlike the homes where music history was made for all the right reasons, Kurt Cobain's home in Seattle made history for all the wrong ones. The Nirvana front man who brought grunge music from the rain-slicked Pacific Northwest to a world audience took his life in the greenhouse over the garage of his Denny-Blaine neighborhood home.

It was an abrupt and stunning end to a life and artist who had taken all the angst and swirling mix of nihilistic pessimism of his Aberdeen, Wash., childhood to a new musical frontier. While his larger-than-life wife Courtney Love tore down the garage and sold the property in 1997, the cedar shake-sided house overlooking Seattle's Lake Washington continues to be a mecca for fans of one of music's most intensely talented and tortured souls.

Shangri-La Recording Studio

300065 Morning View Drive, Malibu, Calif.

Zillow

The Shangr-La home and recording studio has hosted a myriad of popular musicians.

There are no shortage of real estate listings claiming the property is a veritable "Shangri-La." In the case of the famous Malibu music studio that hosted milestone recording sessions for many top artists, it is a real Shangri-La.

Originally built by actress Margo Albert, who starred in the movie "Lost Horizon" and who aimed to recreate a mystical place, the Zuma Beach property elicited ethereal performances from some of music's biggest stars: Bob Dylan, The Band, Eric Clapton, Billy Preston, Van Morrison, Ringo Starr, Joe Cocker and more.

The studio and living quarters have been described by The Band drummer Levon Helm as "a clubhouse and studio where we and our friends could record albums and cross-pollinate one another's music."

The place hosted is a who's-who of recording history, including the 2012 Grammy favorite Adele, whose song "Rolling in the Deep" was not only recorded at Shangri-La Ranch, but the music video was also filmed there.

Shangri-la went on the real estate market last May for $4.1 million.

The Eagles

Beverly Hills Hotel, Sunset Blvd. Los Angeles Calif.

Flickr user: T Hoffarth

Beverly Hills Hotel

The dark and mysterious nature of the Eagles' mega-hit album "Hotel California" stems from its use of one of the oldest literary tricks in the book: A weary traveler stops into an inn that at first glance holds a fascinating promise, only to entrap the traveler in its frightening confines.

While the Eagles have endured decades of miserable interpretations about what the title song of their all-time great recording meant, one element of the song and album reveals itself with some clarity: Since the cover of the album is a picture of the Beverly Hills Hotel, there's no mistaking that famous landmark as a metaphor for the trappings of American excess, particularly the Los Angeles music scene of the '70s.

"Hotel California" is Rolling Stone magazine's 49th greatest song of all time. It's one of the 500 songs that shaped rock 'n roll, according to the Rock and Roll Hall of Fame. It won "Record of the Year" at the 1977 Grammy awards and it is ranked No. 8 in the Top 100 Guitar Solos, according to Guitar Magazine.

As for the fabled hotel, it remains a beacon in the Beverly Hills real estate market and continues to stand out as a highly-rated accommodation.

Bruce Springsteen

7 1/2 W. End Ct. Long Branch, NJ

The Long Branch, NJ, house where Bruce Springsteen wrote

In 2009, fans of Bruce Springsteen beat out potential developers seeking to turn this commercial-area bungalow into another strip mall, or something. What the fans recognized is that posterity was more important than bulldozers. Why? Because this is the house where Jersey's famous singer/songwriter/rocker penned the music for his breakout album, "Born To Run."

The home appears to have such special allure that in 2009, Bob Dylan was found reportedly wandering in the rain near the 890-square-foot house. Given Dylan's respect for music history, with his affinity for legends like Hank Williams and Woody Guthrie, that all but cements the value of this little white refuge.

Related:

Homes of Grammy nominees

Homes that inspire Fashion Week 

Carole King's "Music" house for sale in Hollywood Hills

There was fresh data from the government Tuesday showing that the American dream of owning a home is fading fast.

The share of all U.S. privately-owned houses that stood empty fell in the fourth quarter to its lowest since 2006 as the number of houses occupied by renters rose faster than the pace of new vacancies created by homeowners moved out, according to the Commerce Department.  There number of housing units occupied by renters rose by 749,000 in the fourth quarter compared to a year earlier; some 91,000 fewer homes were occupied by owners, the data show. 

With the fast pace of foreclosures showing no sign of letting up, the U.S. homeownership rate continues to fall. Just 66.0 percent of U.S. homes were occupied by their owners in the fourth quarter of last year – half-a-percentage-point lower than a year earlier. That’s the lowest level of homeownership since the second quarter 1998.

The steady rise in demand for rentals has tightened the supply of housing, helping to push rents higher. Homebuilders report that the market for multi-family units has been a lone bright spot in the overall housing market. While the pace of new household formations has lagged historical averages, those new households are becoming renters. That trend is likely to continue until would-be home buyers gain more confidence that the housing market has bottomed, according to NAHB Chief Economist David Crowe. 

Despite the ongoing high rate of default and foreclosure, the share of houses that stood empty fell in the last three months of last year. Part of the reason may be that bankers have been trying to match the pace of new foreclosures to the sale of homes they’ve already seized, waiting to sell a house before closing out the foreclosure of another one. By letting homeowners remain, banks can reduce the cost of maintaining a house until they’re ready to put it on the market.

Though the overall share of houses that stood empty fell slightly at the end of last year, it remains high by historical standards. A separate report by the Government Accountability Office in November, based on Census data, found that the number of vacant, non-seasonal, residential properties increased 51 percent nationally, from nearly 7 million in 2000 to 10 million in April 2010.

The homeownership rate will likely continue to fall until the pace of foreclosures begins to ease. So far, public and private efforts to modify loans to allow homeowners to stay put haven’t kept up with new defaults. With home buying demand weak, those newly-vacated homes will continue to weigh on home prices.

By the end of the third quarter of last year, some 12.6 percent of homeowners with mortgages – or more than 6 million homeowners - were either delinquent on their payments or in foreclosure, according to the Mortgage Bankers Association. Roughly 22 percent of residential properties with mortgages were underwater at the end of the third quarter, according to CoreLogic.

“Add to this the currently high unemployment and underemployment rates, one gets a recipe for further price declines,” said Patrick Newport, an economist at IHS Global Insight. “Our view is that foreclosures, excess supply, and weak demand will drive prices down another 5 to 10 percent.” 

In the Wild West of the ongoing mortgage mess, there’s a new sheriff in town. And he’s not handing "Get Out of Jail Free" cards in return for a $25 billion check.

The appointment of New York Attorney General Eric Schneiderman to head a special task force that will investigate mortgage fraud marks a turning point in a year-long effort to resolve a wave of legal challenges to abusive and illegal foreclosure practices.

After a year of talks aimed at a settlement with five big banks — Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial (formerly GMAC) — attorneys general in all 50 states this week have been poring over the 100-page draft of a proposed $25 billion deal requiring bankers to commit to modify problem loans that they have been slow to do. Under the proposed terms, the banks would also agree to follow strict foreclosure guidelines and procedures and contribute as much as $5 billion to foreclosure relief programs.

On Wednesday, President Barack Obama tapped Schneiderman to co-chair a joint federal-state task force to pursue criminal charges related to abusive mortgages and the bundling of those loans into investments. Some observers suggested the appointment was intended to blunt Schneiderman’s opposition to the multistate settlement.  Schneiderman has said he's not about to let bankers off the hook.

"My concern ... has always been to make sure that we're not releasing claims that obviously now are even more important to me because I'm investigating them," he told reporters Wednesday.

From the beginning of the settlement talks, the five big banks have been holding out for a blanket waiver of legal liability to protect them from future lawsuits or prosecution. The creation of Schneiderman’s task force makes that blanket waiver extremely unlikely. It may even collapse the deal, JP Morgan Chase Chief Executive Officer Jamie Dimon, told CNBC.

“My own read is (the creation of the new task force) has a pretty good chance of derailing it,” said Dimon.

The proposed settlement was also dealt a major blow Wednesday when California Attorney General Kamala D. Harris said its terms would limit her ability to bring civil charges against mortgage lenders that wrongfully foreclosed on homeowners.

"We've reviewed the details of the latest settlement proposal from the banks, and we believe it is inadequate for California," said Shum Preston, a spokesman for Harris

As ground zero for the mortgage meltdown, California is critical to the approval of any settlement. Roughly one in four of all foreclosures are happening in the state and ten of the top 20 metro areas with the highest foreclosure rates in 2011 are there according to RealtyTrac.

From the early stages of the talks, Schneiderman and a handful of other state AGs have resisted any deal that would let banks off the hook for a variety of claims by homeowners and investors who bought bonds backed by home mortgages. In August, Iowa Attorney General Tom Miller, who is leading the state group, booted Schneiderman from the executive committee of federal and state officials because he steadfastly opposed any deals that would end investigations into mortgage fraud.

Schneiderman holds several powerful legal cards that the other 49 AGs don’t. New York’s anti-fraud Martin Act gives him broad subpoena powers other state prosecutors lack. Some New York state securities laws apply to Wall Street firms based in the state. Many of the pools of mortgages that were chopped up into bonds are held in trusts registered in New York.

Delaware, another AG holdout, has securities laws that apply to the corporate registrations of many of entities involved the mortgage mess. Massachusetts has successfully sued other smaller players in the mortgage mess. In September, Massachusetts Attorney General Martha Coakley broke with the talks to file her own lawsuit against the five banks.

From the beginning, critics have argued that the White House has been too eager to see a settlement and too willing to help the five big banks get the immunity they’re seeking.

“The Obama administration has been more concerned with settling quickly than with settling in a way that moves the ball forward for homeowners,” said Diane Thomsen, an attorney with the National Consumer Law Center.

It remains to be seen whether the new mortgage fraud task force will produce results. The Obama administration already created a Financial Fraud Enforcement Task Force in November of 2009 that tapped 20 federal agencies, 94 U.S. Attorneys offices and state and local partners. Though the group has won a number of cases against smaller players, it has yet to win any high-profile convictions.

In June, Sen. Charles Greassley (D- Iowa) described the task force as “a press release collection agency utilized by the Justice Department to collect examples of investigations of prosecutions that would otherwise have been brought.”

Neil Barofsky, a former federal prosecutor who served as the special inspector general of the Troubled Asset Relief Program and worked with the 2009 task force, shared those doubts.

“I'm a little puzzled by it," he told Reuters. "Here we are three years later, launching what seems like a very similar effort, except now co-headed by a state attorney general."

"Does it mean they haven't really been working on investigating the causes of the financial crisis for the last three years?" he said. "Or is it a statement that the last three years of investigating done by the Department of Justice has been ineffectual and needs to be reworked?"

Related:

Proposed mortgage settlement offers little relief for homeowners  
Obama: New push to aid homeowners

Carlos Osorio / AP

The General Motors headquarters in downtown Detroit.

By Colleen Kane, CNBC.com

With common factors such as traffic, crowds, noise, grime, and crime, cities are generally not perceived as oases of calm.

But what makes one city more stressful to live in than the next? To gauge the stress of residents in American cities, data cruncher Sperling’s Best Places considered the 50 largest metropolitan areas (which includes suburbs). The team considered the following factors: divorce rate, commute times, unemployment, violent crime, property crime, suicides, alcohol consumption, mental health, sleep troubles, and the annual amount of cloudy days.

There wasn’t much variance in several categories. For alcohol consumption per month, each of the top 10 cities ranged from 8.7 to 14 drinks per month; for days per month with poor mental health, the metro areas ranged from 2.9 to 4.3; and for days per month of poor sleep, the range was 6.9 to 8.2.

The data behind this list does not paint a cheery picture. The Sunshine State, in particular, seems much less sunny — dismal, even. What follows are the five metropolitan areas that fared the worst using the above criteria.

5. Detroit-Livonia-Dearborn, Michigan
Population: 1,918,288
Divorced: 11.4%
Commute time – minutes: 27
Unemployment: 15.7%
Violent crime per 100,000 population: 1111.2
Property crime per 100,000 population: 4,152.4
Suicides per 100,000 population: 9.6
Cloudy days annually: 180

Standout factors: The Detroit metropolitan area is in the 100th percentile for violent crime and property crime. It also ranks in the 97th percentile for poor mental health days per month, though it is in the second percentile for alcohol consumption per month.

4. Jacksonville, Florida
Population: 1,374,303
Divorced: 12.3%
Commute time – minutes: 28.0
Unemployment: 10.4%
Violent crime per 100,000 population: 557
Property crime per 100,000 population: 3,772.4
Suicides per 100,000 population: 13.9
Cloudy days annually: 139

Standout factor: Jacksonville is in the 95th percentile for divorces.

3. Miami-Miami Beach-Kendall, Florida
Population: 2,472,015
Divorced: 11.5%
Commute time – minutes: 33.2
Unemployment: 12.5%
Violent crime per 100,000 population: 733.3
Property crime per 100,000 population: 4,678.3
Suicides per 100,000 population: 9.3
Cloudy days annually: 117

Standout factors: Metropolitan Miami is in the 97th percentile for property crime, and 95th percentile for violent crime, but is in the fourth percentile for alcohol consumption.

2. Las Vegas-Paradise, Nevada
Population: 1,908,008
Divorced: 13.2%
Commute time – minutes: 27
Unemployment: 14%
Violent crime per 100,000 population: 763.4
Property crime per 100,000 population: 2,921.9
Suicides per 100,000 population: 18
Cloudy days annually: 65

Standout factors: Las Vegas-Paradise is in the 100th percentile for divorces, but it had the least cloudy days of the 50 cities analyzed.

1. Tampa-St. Petersburg-Clearwater, Florida
Population: 2,780,818
Divorced: 12.3%
Commute time – minutes: 28.3
Unemployment: 11.2%
Violent crime per 100,000 population: 500
Property crime per 100,000 population: 3,387.2
Suicides per 100,000 population: 15.5
Cloudy days annually: 127

Standout factor: Tampa is in the 97th percentile for suicides.

Click here to see all of America's most stressful cities on CNBC.com.

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David Martin, 68, in his home in north Seattle, Washington. He and his wife are facing retirement within five years, but their retirement income won't cover their mortgage.

When David Martin and his wife bought their north Seattle condo five years ago, they figured they had plenty of time to downsize if they needed to before they retired.

Now, with the property worth roughly $60,000 less than the balance of their mortgage, Martin, 68, has been giving serious thought to just walking away, a process lenders call "strategic default."

"Guilt and morality are one side, and objective financial analysis are on the other side," Martin said. "They're coming to two opposite conclusions. I wonder how many other people are struggling with the same question."

Strategic defaults like the one contemplated by Martin are on the rise. A survey last year by two Chicago-area finance professors, Paola Sapienza at Northwestern University and Luigi Zingales at the University of Chicago, found that roughly three out of 10  mortgage defaults in 2010 were by homeowners who could afford to make their payments, up from 22 percent in 2009.

"It's a looming problem that's in the shadows," said Jason Kopcak, a mortgage trader at Cantor Fitzgerald who advises lenders on how to value the loans on their books. "It's very worrisome to mortgage lenders."

Researchers point to a number of forces that are driving borrowers to walk away from their mortgages. At the top of the list is the estimated 12 million homes that are underwater, meaning the owners owe more than they are worth.

Until recently, borrowers like Martin and many industry analysts held out hope that a housing recovery would reverse the rising tide of "negative equity." But after stabilizing this summer, home prices began falling again, dropping 7.5 percent in the third quarter alone and leaving more homeowners underwater.

Even if prices stabilize this year, millions of underwater borrowers face a long wait before they can sell their homes without having to write a big check to their lender to cover the shortfall. Economists at Goldman Sachs recently forecast that after bottoming in 2013 house prices won't recover their 2006 peak until 2023. (No, that's not a typo.)

Many homeowners simply can't wait that long.

In the early stages of the housing bust, the main causes of defaults included unemployment or other financial setbacks and adjustable mortgages that reset to unaffordable levels, according to researchers. Now, five years into the housing recession, strategic defaults are growing as financially healthy borrowers learn of friends or family who have decided to walk away.

A recent study commissioned by the Mortgage Bankers Association likens the rise in the rate of strategic defaults to the spread of a disease. The longer the crisis drags on, the more homeowners will be exposed to someone who has successfully walked away, making the decision easier, the study suggested. "As fundamentally social animals, humans consciously (and subconsciously) look to their peers when forming opinions, habits and behaviors," the report said.

"Most people who own a home know of someone -- a friend, a colleague a family member -- who has defaulted, especially in housing markets that have taken a big hit," said Jon Maddux, CEO and co-founder of youwalkaway.com, a service that advises homeowners on walking away from their mortgage. "They realize these are not bad people. They're not deadbeats. They're just like them."

Researchers say strategic default is also more common among borrowers who feel no personal connection to the party on the other end of the transaction. Gone are the days when you walked into a bank and met with a lender who shepherded your application and congratulated you when the loan was approved, said Michael Seiler, a finance professor at Old Dominion University and a co-author of the MBA study.

"If you defaulted, it was like you were defaulting on your friend," he said. "Your kids might go to the same school. You all might go to the same church. And you're constantly reminded of who you're defaulting on."

That scenario is a far cry from the modern system of mortgage finance, where loans are sold over the phone or online, chopped up into pieces and then sold to multiple, anonymous investors. Many underwater homeowners who try to negotiate with their lender can't even find out who owns their loan.

"We're finding that people are much more willing to walk away when the other party is unknown or what you might call a 'bad bank,'" said Seiler. "Those are the ones that received a lot of bailout funds or were active in the subprime market, giving loans to people who couldn't afford them and they knew that."

The mortgage lending industry's widespread reluctance to modify loan terms has also changed homeowner attitudes about walking away, according to Maddux.

"They feel much better about doing it if they've tried to contact the lender and the lender won't budge," he said. "They feel justified about it because they've tried to do their best to work it out."

Shifting attitudes about the causes of the housing bust are also playing a role, say researchers. In their surveys, Sapienza and Zingales found that 48 percent of Americans said they would be more likely to default if their bank was accused of predatory lending, even if they are morally opposed to strategic default. Some 11 percent said they’d be less likely to pay their mortgage, and more likely to walk away from their loan, if their lender was cited for using false foreclosure documentation.

The government's ineffective response to the housing crisis, even as it went to extraordinary lengths to backstop banks, has also propelled walkaways, say researchers. Since the housing bubble burst in 2006, some $7 trillion in home equity has evaporated, according to Federal Reserve data. Now, as home prices resume their fall, some homeowners believe lenders should bear at least a portion of the losses inflicted by a housing bust the industry helped create.

"The money didn't disappear," said Martin. "We still owe it to the bank, so the bank will end up getting all of its money back on a loan that no longer has its original value. They're taking no part in the loss."

Widespread reports of lenders' bad behavior, from filing defective paperwork to selling investors bad loans, have begun to erode one of the strongest deterrents to walking away: the sense that skipping out on a debt is morally wrong. University of Arizona finance professor Brent White interviewed hundreds of homeowners for his research on strategic default. He found that, in the eyes of many homeowners, mortgage bankers have lost the moral high ground.

"The reality is: for the bank it is simply an economic transaction," he said. "They have no moral qualm about taking your house, and they feel no moral obligation to modify your mortgage even if you're in a difficult financial situation."

Still, there are much more serious consequences to strategic default than pangs of guilt. Any loan default will damage a borrower's credit score. But some strategic defaulters are finding that the impact isn't as long-lasting as widely believed, according to Maddux.

"You don’t destroy your credit, you wound your credit," he said. "Just like a wound, it heals over time."

Maddux said surveys of the roughly 8,000 customers who have signed up for his service in the last four years found that some strategic defaulters are able to restore their credit in as little as a year and a half.  

The bigger risk for walkaway borrowers is that their lender will pursue them in court and win a so-called "deficiency judgment," a court-ordered, full repayment of the mortgage balance. That process is governed by state laws; some so-called "non-recourse" states bar lenders from pursuing such judgments.

But the force of that deterrent is also weakening, according to Sapienza.

"(There's an) increasing perception that lenders are not going after borrowers who walk away," he said.

That perception may be dangerously misplaced, as many lenders continue to aggressively pursue judgments against homeowners who strategically default. That's why there's widespread agreement that homeowners considering it need to get solid legal advice from an experienced real estate attorney in their state.

"There's a process to strategic default and a lot of people don't know how to do it," said Kopcak. "They don't really know what their options are. People really need to talk to a lawyer who knows the process."

For now, Martin is electing to stay in his home and continue paying the mortgage.

"We intend to continue as we are on the basis that we gain nothing from acting at this point," he said in a note. "We think that the real estate market in Seattle will rise by 2013 enough to offer better alternatives. There is a small chance that the federal government will act to offer more rational choices. The real possibility is that the debt might be refinanced in 2013 at a level that might offer enough reduction in payments to allow us to hang on long enough to shore up our financial position."

In short, giving up at this point may be worst of all alternatives. Giving up seems to run counter to our value system, no matter how financially wise experts seem to believe it may be."

J Pat Carter / AP file

Short sales up, foreclosures down. That's because in many cases a short sale may be the lesser of two evils for banks and homeowners versus a foreclosure.

It's a tarnished silver lining for people at risk of losing their houses and homeowners in neighborhoods blighted by bank-owned properties, but the robosigning scandal that slowed the foreclosure process to a crawl appears to have increased lender interest in short sales. 

"Foreclosure sales are pretty devastating," said Faith Schwartz, executive director of Hope Now, a resource for homeowners facing foreclosure. "We'd much prefer a modification, but if [homeowners] don't quality, then the next best alternative is deed-in-lieu or short sales." 

Short sales, in which the lender agrees to let the owner sell the home for less than the amount owed on the mortgage, and foreclosures both climbed in 2010, but while short sales rose by 26,000 this year, the number of foreclosures fell by 255,000, according to Hope Now. Short sales, along with deed-in-lieu of foreclosure deals in which the lender takes the deed essentially as payment for the mortgage, still upend families, torch credit ratings and hurt neighboring property values, but they're far less toxic than foreclosures.  

Short sales are better for homeowners. They can stay in their homes, and the quicker process means they can begin rebuilding their credit sooner. Credit scoring firm Fair Isaac Co., which developed the FICO score, says foreclosures and short sales slash the same number of points from a homeowner's credit score. Homeowners with short sales may be able to obtain a loan sooner than foreclosed homeowners, though, which can improve their credit.

In some states, mortgage lenders can pursue a delinquency judgement against homeowners for the difference between the amount due on the mortgage and the purchase price at a foreclosure auction. A delinquent homeowner engaging in a short sale has an opportunity to negotiate away the bank's right to sue for that judgement.

The biggest plus for banks is that they stand to make more from a short sale than a foreclosure. According to foreclosure specialists RealtyTrac.com, the average price of a foreclosed home in the second quarter of 2011 was $164,217, while the average price of a short sale was $192,129.

Besides yielding less, foreclosures also cost lenders more in legal and administrative resources. "The incentives against foreclosing are even larger now," Karen Dynan, co-director of the Economic Studies program at the Brookings Institution, said via email. "Servicers are facing enormous staffing constraints because they are trying to deal with so many distressed properties, so it is probably even harder now to find the staff to do the paperwork for the foreclosure."

Lenders are also spending more on due diligence, she said. "Servicers and lenders are being heavily scrutinized right now so they probably are more worried than ever about making a mistake in a foreclosure that could subject them to legal liability in the future."

Neighborhoods also benefit from short sales rather than foreclosures. "Short sales typically sell at less of a discount than foreclosure sales do," Jed Kolko, chief economist at real estate website Trulia.com, said via email. "Also, foreclosed homes often sit vacant while short sales are re-occupied more quickly. For both these reasons, short sales tend to depress neighboring property values less than foreclosures do."

Another issue that plagues foreclosures is vandalism, either from opportunistic criminals preying on vacant homes or from disgruntled homeowners. "It's often not a friendly process so you frequently have cases where people deliberately vandalize homes," Dean Baker, co-director of the Center for Economic and Policy Research, said.

Some economists worry that the drop in foreclosures is less an indication of lenders' willingness to compromise and more a function of a huge backlog of foreclosures that haven't been processed. "Foreclosures are going to be a drag on the market for along period of time," Baker said. Until these distressed homes are resold and assimilated back into the market, real estate prices can't stabilize. 

Baker added, though, that lenders facing years' worth of legal wrangling and costs to execute a foreclosure may be more willing to accept a buyer's offer in a short sale. 

The other caveat is that short sales aren't an option for all distressed homeowners. Short sales are contingent on the ability of sometimes multiple lenders to agree on a price that a buyer is also willing to pay. For people who took out multiple mortgages or have other liens, this presents a challenge. "It's just a little more complicated when you have more parties involved," Schwartz said.

Related story: Real estate recovery in limbo until 2013, experts say