Sotheby’s Listed @ $10.75M in 2007 now @ auction for $2.95M

Estate Section home on Via Del Lago to be auctioned

By DARRELL HOFHEINZ
DAILY NEWS STAFF WRITER
Updated: 12:19 p.m. Thursday, April 29, 2010
Posted: 6:47 p.m. Wednesday, April 28, 2010
Palm Beach real estate agent Nancy Mendel is taking an unusual approach to selling an oceanfront home she owns in the Estate Section. The 1982 four-bedroom house at 100 Via Del Lago will be auctioned next month with a required minimum bid of $2.95 million.

Standing on a lot measuring more than a half-acre and offering more than 5,500 square feet of living space, the house is listed for sale at $4.75 million.

The auction, on May 22, will be conducted on the property by New York City-based Concierge Auctions. The company’s “pre-sale estimate” of the selling price is between $3.85 million and $4.35 million, according to a statement by the auction house Wednesday.

High-end home auctions appear to be a rarity on the island, although a few upscale properties have been put up for bid in nearby communities over the past few years, according to local real estate sources.

Concierge Auctions conducts high-end property auctions across the country and is a “preferred provider” of auction services for Sotheby’s International Realty, said Laura Brady, the company’s co-founder and vice president of marketing.

Mendel is a longtime real estate agent affiliated with Sotheby’s’ Palm Beach brokerage. A resident of Palm Beach since she was 1 year old, Mendel built and later renovated the house on Via Del Lago but has not resided there for several years. She lives in another home she owns in Palm Beach and leases the Via Del Lago property seasonally. The house has been on the market about three years and at one point was priced at $10.75 million.

Although she has never been involved with a home auction before, the concrete time frame for the sale appealed to her, Mendel said.

“I’m trying to consolidate my life, and I certainly don’t need two homes in Palm Beach,” she said. “I do want to sell it before summer.”

Potential buyers must pre-resister for the live auction, Brady said. Each bidder must show funds of $100,000 to qualify for the auction. Bidders can bid by phone or via a representative during the event, which won’t be open to the public.

Speaking by phone from New York, Brady said the auction of Mendel’s house will be the first time Concierge Auctions has conducted a home auction in Palm Beach.

“I’m not aware of any auction that has been hosted in the Estate Section,” added Brady, who said her company in January auctioned a Hawaiian home owned by Cher for $8.72 million.

“We only specialize in luxury residences. Our average price point is in the $4 million range,” Brady said.

Real estate broker Tricia Ward, president of the Palm Beach Board of Realtors, could not recall any auctions of residential properties in Palm Beach. Ward said she had looked into auctioning properties in the past but decided it wasn’t for her.

“A lot of auctioneers want to set the bidding too low, and it scares people off,” said Ward, who owns Ward Real Estate in Wellington. “But I think that when they work, it’s great.”

Brady acknowledged that many people associate home auctions with foreclosed and other distressed properties. But she said auctions of high-end properties can offer sellers an alternative to a standard listing.

“Traditionally, real estate auctions have been viewed as one of the later stops for sellers to consider,” Brady said. “But we’re seeing that auctions can produce the best price in the shortest period.”

Mendel said she is hoping the house brings far more than the minimum bid required by the auction house.

“We’re counting on a lot of people being interested,” she said.

HOMESAPRIL 9, 2010
Foreclosures Hit Rich and Famous
By CRAIG KARMIN And JAMES R. HAGERTY

The rich and famous now have something in common with hundreds of thousands of middle and lower-class Americans: The bank is about to take their homes.

Houses with loans of $5 million or more will likely see a sharp rise in foreclosures this year, according to a RealtyTrac study for The Wall Street Journal.

Just this week, a Tudor mansion in Bel-Air belonging to film star Nicolas Cage was in foreclosure auction and reverted to the lender. On Wednesday, Richard Fuscone, a former top Wall Street executive, declared personal bankruptcy, forestalling a foreclosure auction that had been scheduled this week on his 14-acre Westchester mansion. Last month a Manhattan condominium owned by Italian film producer Vittorio Cecchi Gori was sold in a foreclosure auction for $33.2 million.

In February alone, 352 homes nationwide in this category were scheduled for foreclosure auction, the final step before a bank acquisition. That is the largest monthly number of these so-called notices of sale since the financial crisis began. By comparison, in all of 2009, there were 1,312 such notices.

Economists say the super-wealthy are among the last to lose their homes in a mortgage crisis because they usually have high savings, better access to credit and other means for staving off foreclosure. But many of them work in financial services and other industries hit especially hard by the crisis, and have seen their wealth shrink in the market crash.

While the numbers are modest compared with foreclosures at other income levels, they suggest the possibility of a sudden spike in bank takeovers of the wealthiest Americans’ property. Typically half the notices of sale result in homes being turned over to creditors, though the figure could be slightly lower for the richest Americans who have more financial options, according to Daren Blomquist at RealtyTrac.

Big borrowers are more likely to default than ordinary people, according to data from First American CoreLogic. Its loan database, reflecting more than 80% of the overall home-loan market, includes 1,700 loans with balances of $4 million or more. About 14.8% of those loans were 90 days or more overdue at the end of January, compared with 8.7% for all home loans tracked by First American. Sam Khater, a senior economist at First American, said the bigger borrowers may be more prone to stop making payments when they have lost all their home equity.

Mr. Fuscone, Merrill Lynch’s one-time head of Latin America, put his mansion up for sale in November, asking $13.9 million. But he couldn’t find a buyer.

The court had scheduled a foreclosure auction for Thursday for the 18,471-square-foot mansion—with two swimming pools, two elevators, six fireplaces, 11 bathrooms and a seven-car garage. The personal bankruptcy filed in U.S. Bankruptcy Court Wednesday temporarily freezes the foreclosure process.

Reached by phone, Mr. Fuscone declined to comment. Brokers and real estate tracking companies say that his home is one of the most expensive properties to face foreclosure proceedings yet.

The phenomenon is not limited to the New York area. Banks have taken over homes with loans of $5 million or more in Georgia, North Carolina and Colorado, RealtyTrac says.

Mr. Cage had tried to sell his 11,817-square-foot Bel-Air property for $35 million but failed to get any offers, said James Chalke, a real-estate agent who had the listing. At a foreclosure sale Wednesday, the property attracted no bids from investors and so was acquired by the foreclosing lender. Annett Wolf, a spokeswoman for Mr. Cage, said he had no comment.

A representative of Mr. Cecchi Gori, producer of more than 200 films including “Il Postino” and “Life is Beautiful,” said his financial situation is improving.

In Florida’s Miami-Dade County, the three largest foreclosure filings initiated against homes in the past six months involved a 4,655-square-foot home in Sunset Islands; a 8,443-square-foot house in Coral Gables; and a condo in Miami Beach, according to Peter Zalewski, a principal of Condo Vultures. All three had mortgages of $3.5 million to $4 million.

Mortgage defaults began to surge in late 2006, mostly among borrowers with subprime mortgages, those for people with weak credit records or high ratios of debt to income.

Over the next few years defaults spread rapidly to better-heeled borrowers, especially those who got loans without documenting their income. At the end of 2009, nearly eight million households, or 15% of those with mortgages, were behind on mortgage payments or in the foreclosure process.

Wealthy people have the means to stretch out the distress process, sometimes for years.

“It’s very, very difficult for these people to believe they’ve had such a severe reversal of fortune,” says Maggie Navarro, a real-estate agent in Pasadena, Calif.

Marc Carpenter, a San Diego-based foreclosure specialist, adds that while it’s much harder for potential buyers to get loans, there are also fewer buyers who can pay for top-dollar properties. “The upper end is definitely a lagging indicator,” he says.

In his bankruptcy filing, Mr. Fuscone provided a list of his debts, including ones to the Greenwich Country Day School, American Express, Mercedes-Benz, a local hardware store, a pet store, and Richards of Greenwich, a fine-clothing store.

“My background is in the financial-services industry and I have been personally devastated by the financial crisis which came to a head in March 2008,” Mr. Fuscone said in his bankruptcy declaration. “I have been sued by Patriot National Bank” as part of a foreclosure action. “I currently have no income for the 30-day period” following his bankruptcy petition.

C.W. Kelsey, owner of Greenwich Hardware, was among the local merchants owed money by Mr. Fuscone, though he wouldn’t say how much.

“Traditionally, the majority of our credit problems were contractors,” he said. “Now there are people you’d never expect two or three years ago to have problems, who live in multimillion dollar homes.”

—Nick Timiraos and Josh Barbanel contributed to this article.
Write to Craig Karmin at craig.karmin@wsj.com and James R. Hagerty at bob.hagerty@wsj.com

It’s Official: Mikhail Prokhorov Loses $55 Million Villa Leopolda Deposit
by Jared Paul Stern (RSS feed) Mar 3rd 2010 at 6:02PM

Poor Mikhail Prokhorov. Last month we reported that the metals magnate had been replaced as Russia’s richest man by Vladimir Lisin, and now languishes in second place. Now a court in Nice has just ruled that the oligarch must forfeit the $55 million deposit he put down for the magnificent $750 million Villa Leopolda (above) on the French Riviera in 2008 before backing out of the deal, the London Daily Mail reports. Prokhorov signed a sales agreement for the Villa, and French law stipulates that purchasers lose their deposits if they pull out after such an agreement has been executed. The magistrate also ordered Prokhorov to pay the Villa’s owner Lily Safra an additional $1.5 million penalty. Safra says she will donate all the money to ten charities, including almost $1.5 million for neuroscience research at King’s College London and Imperial College London. “By transforming the deposit into an act of giving I would like to encourage all who can do so to support medical research and other humanitarian causes,” she declared. On the plus side for Prokhorov, he’s still worth a cool $17.85 billion.

Villa Leopolda Now Worth Only $40 Million?
by Jared Paul Stern (RSS feed) May 20th 2009 at 9:02AM

Villa Leopolda in Cap Ferrat (above), once the world’s most expensive estate with a $750 million pricetag, may now only be worth $40 – $50 million thanks to plunging prices in the wake of the global recession, according to Sotheby’s International Realty CEO Alexander V. G. Kraft. “For trophy properties it used to be a question of how much someone was willing to pay,” Kraft tells the London Telegraph. “They would come quietly onto the market – they would be marketed under the table. This system really has totally collapsed. Buyers willing to pay anything like those sums just don’t exist anymore.” The paper says “panic sales” are on the rise in the ritzy area.

As we wrote about back in February, Russia’s richest man Mikhail Prokhorov had reportedly agreed to purchase the Villa for $750 million but later backed out of the deal, forfeiting a $55 million deposit. The estate has not been re-listed. “Prices are coming more in line with the rest of the market,” Kraft declares. “Trophy properties will be more in line with ‘normal luxury properties’ – about 20 to 30 million [euros].” Peter Ilovsky, director of Sotheby’s International Realty in Cap Ferrat, says they’re still good investments however. “Owning a property in Cap Ferrat is like having a Picasso,” he tells the paper. “It’s certainly better than placing the money in a Swiss bank.”

The point is that the third souvenir that was brought by the monarch of Belgium from flamboyant Paris was Blanche Zélia Joséphine Delacroix who was only 17 that time. She was the daughter to the graphic designer from Lille who worked as the concierge in Paris. Blanche is said to have been unofficially created Baroness de Vaughan in Belgium and held the official place next to Léopold II.

In 1902 Léopold’s official spouse dies, the Queen Marie Henriette Anne von Habsburg-Lothringen, Archduchess of Austria, and the King (you think, he was too inconsolable with the young Blanche, Baroness de Vaughan?), purchased the land in Villefranche-sur-Mer at Cote d`Azur, next to Monte Carlo. The King intended to construct a summer palace for his beauty lover who was said to distinguish with vulgarity typical to a real daughter of concierge, though she was single-hearted, and was believed to care of the King tenderly. Moreover, Blanche Delacroix was 19 when Léopold was 67, he was at the age when the saying ‘no fool like an old fool’ is too actual, even for the Kings.

Baroness de Vaughan gave birth to a baby, called Lucien Philippe Marie Antoine, for the King in 1906 who was titled as Lucien Duke of Tervuren, and in 1907 she delivered another son who was given the title of Philippe Count of Ravenstein. In the meantime the summer palace was being constructed and the King married to his lover in 1909 when he was 75 and she was only 26. However, the King’s dream to live a quiet life with his morganatic family in the best part of France did not come ever true. Léopold II died in a few days after he married Blanche, and his love place was never constructed for her.

Ogden Codman, the new owner to that wonderful land, caused the palace constructed in 1931, though the title «royal» was so much stuck to the place that the palace was at all times called Villa Leopolda whoever bought the place. The same we know about it.

In 1952 Villa Leopolda was bought by the founder of the concern Fiat, by Janny Agnelli for $100 thousand USD and in 1980 the banker from Lebanon, Edmond Safra paid $3 million USD for the Villa. The place was good to welcome Ronald Reagan and Frank Sinatra.

Unfortunately, Edmond Safra died in 1999 during the fire in his place in Monaco. As rumors say, the fire was caused by the Russian mafia, as if he was killed and then the house set to fire to hide all relations. There are no true evidences only rumors about the accident. And the Villa was now possessed by the banker’s widow, Lily Safra, one of the wealthiest women in the world. And last, in 2008, the world was stroke with the news that Villa Leopolda is on sale again.

Daily Express of Britain announced that Roman Abramovich bought the villa for $500 million USD for Darya Zhukova as the wedding present. Nevertheless, the press service of the billionaire disclaimed the news in The Independent stating that the Russian oligarch acquired a house in France, that is Chateau-de-la-Cros, a villa in the French Riviera, and Abramovich does not need another villa.

Nice-Matin, the French Newspaper, announced that Mikhail Prokhorov was about to purchase the Villa and he offered 496 million Euros, that is $730 million USD for the place and he was said to make down payment. The price offered for the place made the Villa one of the most expensive houses in the world. Some time ago the amount of 57 million Euros that is $130 million USD was paid by the Indian Steel Magnate Lakshmi Niwas Mittal in 2004 for the real estate in Kensington Palace Gardens, being the highest price for the property. The House in Upper-Filmor Gardens was bought by the stranger for $152 million USD. A month later the Apartments Saint-James that is situated between the Buckingham Palace and the Residence of the Premier Minister of England was given $218 million dollars. However, Lakshmi is now the owner of the most expensive house in the world when he purchased a House in Kensington from the Head of the Hedge Fund Noam Gottesman for $222 million USD. Though, Villa Leopolda was to be the first only if the transaction took place.

Mikhail Prokhorov denied his intention to buy the villa. The representative person from the «ONEXIM» Group presiding by Mikhail declared that they had no purchases in France, though in the future time they intend to invest in the historical real estate at Cote d`Azur and in other countries.

Finally mass media abroad came to the idea that Villa Leopolda was sold to the Russian magnate who preferred to be anonymous. The realtors practicing at Cote d`Azur told that in 90s the Russians attacked the elite real estate here in the place drawing attention to the amount offered for property and highlighting that the real estate for less than 100 million Euros was never considered by the Russians. Though, nobody named these Russians who used all their assets and forces to invest here into the real estate.

Lately Villa Leopolda again appeared to be involved in news about elite real estate. Mikhail Prokhorov is thought to have purchased the Villa, though the bargain failed. Nice-Matin announced on the termination of the transaction and attempts made by Prokhorov to bring down the price for the Villa to 200 million Euros and that as a result he was to transfer 10% of the sum of the transaction to Lily in compliance with the French legislation. «Eight months ago Mikhail was about to pay half a billion for this villa, and now he does not have an opportunity to propose several dozens millions Euros».

The French periodic could have been less ironic if Mikhail was not on the list of the wealthiest persons in Russia. So, Nice-Matin says that today «when all bet for the return of petrodollars of the Persian Gulf, the Russian dollar crane was broken, if not dried to end».

The rumors about the «broken dollar crane» are continued with gossips that Roman Abramovich is about to sell his villa in Antibes, and Mikhail Prokhorov appeared in the first top of Finance due to troubles and problems experienced by his competitors not by him personally.

Villa Leopolda seems to lose the title of the most expensive private house of the world. The experts state that the Villa costs about 30-40 million Euros. And Alexander V.G. Kraft, the President and the Director General of Sotheby’s International Realty, the international real estate agency, publicized that prices offered for such unique structures go down to 20 to 30 million Euros since the point was that «the amount which was ready to offer by the competitive buyers and now the potential buyers who can afford spending a fortune for the house are not available any longer».

Nevertheless, even if the transaction took place, the title of the most expensive house would not be held for ever. The Indian businessman, Mukesh Ambani, is the wealthiest person in Asia, who is planning to move to 27-storeyed house in Bombay that he caused to erect for his family and corporation. And this real estate is estimated to cost approximately $2 billion USD.

chicagotribune.com

Sheldon Good bankruptcy: Real estate firm blames ex-chairman for Chapter 11 filing

By Mary Ellen Podmolik

Tribune reporter

April 25, 2009

Copyright © 2009, Chicago Tribune

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The first record of a settlement on Singer Island dates back to 1906 with Inlet City. Inlet City was a spontaneous community of fishermen and squatters, most of whom came from nearby Riviera Beach and the Bahamas. Fishermen were attracted to the island as a place to dry the cotton nets that they used in those days, and for its proximity to the fertile Gulf Stream (the waters of the Gulf Stream are closer to land on Singer Island than any other place in North America!).

Singer Island was named for Paris Eugene Singer, the famous developer of Palm Beach and 23rd child of Isaac Singer, the sewing machine magnate (Paris also fathered a son with legendary dancer Isadora Duncan in 1910*). In 1920, he visited Palm Beach and met Addison Mizner. He agreed to pay the architect a $6,000 a year retainer for life if his work was confined exclusively to the Palm Beach area. With Mizner, he created the Palm Beach we know today with its Spanish architecture, picturesque streets and exclusive shops. Singer often took his friends on picnics to the beautiful island directly north of Palm Beach. In anticipation of the Florida real estate boom, he and Mizner planned to develop a luxurious resort (the Paris Singer Hotel) on the south end of the island and a modest hotel (the Blue Heron) on the north end with a 36 hole golf course between the two structures.
The estimated price was four million dollars – a fantastic amount in those years. Mizner was to design the hotels, but it is said Singer was so eager to start, construction of the Blue Heron was begun before the drawings were started. The opening date was set for 1926. The hotel’s service wing was the first and the last to be completed. Singer’s original plan was to finance the building from the sale of lots throughout the island. The Florida land boom was already slowing down in 1925, and the combination of 1928 hurricane and 1929 stock market crash dealt a mortal blow to Singer’s finances. The shell of the Blue Heron remained for 14 years, until Paris Singer’s dream finally came to an end when the the abandoned, incomplete hotel was razed in 1940 (the Hilton Hotel stands there now).

In 1940, the City of Riviera purchased 1,000 feet of beach on the Island for $40,000. This led to the growth of tourism in Riviera and eventual incorporation of the island north of Palm Beach Shores. In 1941, the city of Riviera changed its name to Riviera Beach. The Town of Palm Beach Shores was developed in 1947 when A. O. Edwards, a railroad and hotel tycoon, bought 240 acres on Singer Island for $240,000 and invested $500,000 in improvements. He laid out a city plan with parks, walkways and roadways (Palm Beach Shores’ northern boundary originally extended 300 ft. north of Blue Heron Boulevard). In 1948 Edwards built the Inlet Court Hotel which was later renamed The Colonnades. A year later the wooden Sherman’s Point Bridge was replaced with a steel and concrete two lane structure with a drawbridge which permitted passage through the Intracoastal Waterway. The first Sebring style race was held on the island in 1950 and ended at the Colonnades. Edwards became the Singer Island’s first mayor in 1952. When he died in 1960, his estate sold the Colonnades Hotel to John D. MacArthur in 1963.

John D. MacArthur, born in poverty as the son of a preacher, became one of the greatest financiers of his day through the building of Chicago’s Banker’s Life and Casualty Insurance Company. By purchasing over 100,000 acres in this part of Palm Beach County, MacArthur became the largest landowner in the area. MacArthur ran his billion dollar empire from a booth in the Colonnades Hotel’s coffee shop. In 1976 he suffered a stroke and died 14 months later in the hotel. The hotel was razed in 1990 and the Marriott Corporation began construction of its time share resort, Marriott’s Ocean Pointe Resort, on the land.

MacArthur also owned many acres on the north end of Singer Island and he donated a large section of that land for a state park. The MacArthur Beach State Park opened in 1989 and his foundation provides funds to improve the facilities.

In the 1950’s Palm Beach County enjoyed tremendous growth and Singer Island evolved into a resort area of hotels and condominiums for winter residents. In 1952, Phil Foster Park was opened, named after one of Riviera Beach’s pioneer citizens. In 1976, to accommodate this growth and ease the access to the island, the two lane draw bridge was replaced with the current four lane Blue Heron Bridge.

SingerIsland.com was launched in 2000 and, as part of the Castello Cities Internet Network (CCIN), began promoting the island throughout the world through CCIN’s network of 117 city sites (PalmSprings.com, Acapulco.com, LagunaBeach.com, WestPalmBeach.com) as a premier South Florida destination. Today, Singer Island is experiencing unprecedented growth and practically all of its available real estate is under development.

*Paris Singer’s son was killed in an automobile accident in 1913.

Above article taken from singerisland.com
February 3, 2009

That is what Rockrose Development Corporation is promising potential buyers of hundreds of condominiums in New York, as sellers of real estate nationwide become desperate to unload inventory where prices are sliding quickly.

Rockrose will buy back the apartment after five years at 110 percent of the purchase price, no questions asked.

Home builders, trying to work off the largest overhang of inventory since at least the early 1960s in the toughest spring selling season in decades, have been forced to come up with new ideas to bring buyers to their open houses.

Aside from money-back guarantees, sellers are giving away credits for new kitchens and other accouterments, mortgage protection plans if buyers lose their jobs, and lower mortgage rates at the home builder’s expense.

“People need to be convinced to buy a home because it is almost guaranteed to lose value over the remainder of this year and perhaps beyond,” said Lawrence White, professor of economics at New York University’s Stern School of Business.

With mortgage rates hovering around record lows and affordability at a record high, potential home buyers already have several good reasons to be house hunting.

But people are still hesitant to buy with unemployment at its highest level since 1983 and home prices, by some accounts, forecast to fall another 20 percent through the end of next year.

Rockrose is not alone in offering what was once unthinkable to draw in buyers.

Luxury home builder Toll Brothers is offering a lofty $100,000 incentive to spur sales for its residences at Belle Lago Villas, located in southwest Florida, in Estero.

The incentive is flexible and can be used toward customizing options, like upgraded flooring or kitchen appliances, or financing options such as using the incentive toward closing costs or buying down rates — whatever the buyer chooses.

“The incentive has been well-received and we have seen increased interest,” said Ken Thirtyacre, president of the Florida West Division of Toll Brothers.

Rockrose, a privately held developer based in New York, is converting a 27-story lower Manhattan rental building into hundreds of condominiums and needs to find buyers fast as prices in Manhattan — which had held off the steep losses seen in other parts of the country — fall fast.

“For those sitting on the sidelines, this gives them a sense of security and a motivation to act,” said Kathleen Scott, director of sales at Rockrose.

The U.S. housing market is in the worst downturn since the Great Depression and its impact has rippled through the recession-hit economy, as well as the rest of the world. A strong spring season may hasten a turnaround for the housing sector and portend a recovery for the U.S. economy, the world’s largest.

The U.S. government is offering an $8,000 tax credit, part of the stimulus bill, for first-time home buyers, which is helping boost sales in some regions. But many people, who are unemployed or who fear they may lose their job, are disinterested in purchasing a home.

Toll Brothers, in response, recently launched a program called the “Mortgage Protection Plan” in which the company pays for a buyer’s mortgage if the buyer becomes unemployed.

The Commerce Department said new home sales climbed 4.7 percent in February after reaching a record low in January. Sales have declined by 41.1 percent over the past year and are 75.7 percent below their July 2005 peak.

Slashing already record low mortgage rates is another path being taken. Home builder Lennar Corp. is offering a fixed 3.625 percent rate on certain 30-year fixed-rate mortgages for qualified buyers, substantially below average rates that have been hovering in the range of 4.70 to 4.80 percent. The low rate, however, comes with an array of stipulations.

NYU’s White said some incentives can help spur sales, while others are gimmicks for media attention.

“If it helps sell a home, then it certainly is a success,” he said.

(Additional Reporting by Lucia Mutikani; Editing by Leslie Adler)

Mary Ann Jennings, director of public information for the Fairfax County, Va., Police Department, said Kellermann was found dead in his Reston, Va., home. The 41-year-old Kellermann has been Freddie Mac’s chief financial officer since September.

Jennings said that a crime scene crew and homicide detectives were investigating the death, but that there didn’t appear to be any sign of foul play.

McLean-based Freddie Mac has been criticized heavily for reckless business practices that some argue contributed to the housing and financial crisis. Freddic Mac is a government-controlled company that owns or guarantees about 13 million home loans. CEO David Moffett resigned last month.

Freddie Mac and sibling company Fannie Mae, which together own or back more than half of the home mortgages in the country, have been hobbled by skyrocketing loan defaults and have received about $60 billion in combined federal aid.

Kellermann was named acting chief financial officer in September 2008, after the resignation of Anthony “Buddy” Piszel, who stepped down after the September 2008 government takeover. The chief financial officer is responsible for the company’s financial controls, financial reporting and oversight of the company’s budget and financial planning.

Before taking that job, Kellerman served as senior vice president, corporate controller and principal accounting officer. He was with Freddie Mac for more than 16 years.

These places in America have fast-falling home prices that have yet to hit bottom.
Two weeks ago, Joyti Goundar, an agent at Redfin, a residential real estate brokerage, entered a bid of $420,000 for a three-bedroom, 1,625-square-foot La Crescenta home outside of L.A., listed at $299,000. When she lost the bid, she wasn’t surprised. In July of 2008, Goundar bid $559,000 for a two-bedroom Arcadia house, also outside L.A., listed by Wells Fargo for $459,900. That one received 105 bids, driving the price up to $628,000, according to Los Angeles County records.

In Depth: How Low Will Real Estate Go?

“Sellers want to generate a bidding war, and it’s working,” she says.

So does this mean Southern California prices have reached bottom?

Not by a long shot. Even with the bidding wars, prices aren’t nearly as high as they were at the peak of the real estate boom. Values plummeted 31% in the L.A. metro area in 2008, according to the National Association of Realtors.

And values still have a long way to go. Based on historical balances of employment, housing sales, income, lending availability, foreclosures and vacancy rates, all dating back to 1982, home prices in the Los Angeles metro area still have 29% further to fall, according to Moody’s Economy.com.

The best real estate deals, it seems, are yet to come.

Behind the Numbers
To figure out which housing markets have yet to reach bottom, we looked at the 50 largest metropolitan statistical areas in the U.S., as defined by the Office of Management and Budget and, using calculations from Moody’s, analyzed each area’s spending power, unemployment, housing and credit availability going back 27 years.

Over that time, each area’s home prices have fluctuated differently according to these factors. Moody’s calculations determine how much each area’s home prices would have to change to bring that particular housing market back to a state of balance. The further from equilibrium, the further the market has to go. Projections were made on the basis of the current rate of price decline, absorption rate, employment and salary deterioration, and how long it would take each metro to wash out to a historical point of balance.

All of this adds up to bad news in one of the states hardest hit by the real estate bust, Florida–particularly Miami, Orlando and Jacksonville. Home prices are down 32%, 27% and 9%, respectively, in year-over-year terms, and are expected to decline a further 53%, 48% and 39% in each area, according to our calculations. Each has decade highs in unemployment, not to mention still out-of-balance price-to-home-price ratios.

In Miami, home prices are $234,200 at the median, and that’s still six times the median income of $39,350, making it one of the nation’s least affordable markets. Unaffordable housing markets are hit particularly hard when unemployment spikes, especially over multiyear periods. In Miami’s case, unemployment has gone up steadily since 2007.

“These price decreases tend to add up in metro areas that have had continuous increases in the unemployment rate over the past two to three years,” says Andres Carbacho-Burgos, an economist at Economy.com.

And unemployment has a nasty way of compounding with other factors.

“Rising unemployment is accompanied by a whole host of other occurrences–rising defaults and foreclosures, reduced mortgage originations, falling incomes, reduced industry investment and construction, increasing outmigration, and lower long-term income prospects,” says Carbacho-Burgos.

In other words, as jobless rates go up a little, home prices sink a lot.

All Markets in this Together
It’s not just broader metro areas, with their vacant outer suburbs, overbuilt beachfront and overly hopeful new developments that are taking hits. In New York, Manhattan has been showing signs of cracking for months, in the form of rising inventory and slowing sales.

Yet it wasn’t until the first quarter of 2009 that it became apparent how much of a hit that market would take.

Manhattan median prices were down 21% in year-over-year terms, from $852,500 to $675,000, according to Miller Samuel, a Manhattan-based appraisal firm. While Moody’s expects the broader metro to decline another 23%, and Manhattan will no doubt contribute to that, the price drops have at least piqued interest among those still employed, a lone bright spot.

While a slower housing price decline won’t bring jobs back to AIG–or resurrect Lehman Bros. from the dead–and save housing prices, it at least wards off some fears of a return to the frightening bankrupt New York of the early 1980s.

“By the end of the first quarter there was a noticeable uptick in contract activity and attendance at open houses,” says Jonathan Miller, president of Miller Samuel. “While this is partially attributable to seasonality, it is also a sign of first-time qualified buyers seeking to take advantage of improved affordability.”

Though, as is the case in Los Angeles and most other parts of the country, that increased interest has yet to result in price reversals to sustainable levels. As long as unemployment continues to rise, don’t expect that we’ve seen the worst of it.

In Depth: How Low Will Real Estate Go?

Top 5 Places With Fast-Falling Home Prices
1. Raleigh, N.C.
(Raleigh-Cary metro area)
2008 Population: 1,088,765
2007-2008 Change: 4.29%

2. Austin, Texas
(Austin-Round Rock metro area)
2008 Population: 1,652,602
2007-2008 Change: 3.77%

3. Charlotte, N.C.
(Charlotte-Gastonia-Concord, N.C.-S.C., metro area)
2008 Population: 1,701,799
2007-2008 Change: 3.36%

4. Phoenix, Ariz.
(Phoenix-Mesa-Scottsdale metro area)
2008 Population: 4,281,899
2007-2008 Change: 2.78%

5. Dallas, Texas

(Dallas-Fort Worth-Arlington metro area)
2008 Population: 6,300,006
2007-2008 Change: 2.38%

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