A report on Chicago's housing bubble. "With $1-million home listings in many suburbs around Chicago mounting, high-end homebuilders are likely to pursue fewer new-construction starts as they sort through economic data and try to get a fix on homebuyer sentiment. Question No. 1: Is the market oversaturated with monster houses?"

"Recent statistics suggest that it is. As of Feb. 3, there were 2,532 houses in metro Chicago for sale with an asking price of $1 million or more, up 53% from last year, according to the Lisle-based MLS of Northern Illinois. There were 67 houses priced at $5 million or above, an increase of 49% from the year-ago total of 45."

"This would seem to add up to well more than a year's supply of million-dollar homes. In 2005, 1,951 houses sold at prices above $1 million. There were just seven $5-million homes sold all of last year, leading some observers to wonder how long the 67 homes in that category currently on offer will take to move."

"'There are 10 homes in Hinsdale on the market for $3 million and more right now. That's an unprecedented number,' says Timothy Thompson. His firm is going ahead with plans for two spec homes of its own in Hinsdale, priced at $4 million and $5 million, the latter featuring 6,000 square feet of living space and a mahogany front door valued at $35,000."

"But Mr. Thompson worries that the market is 'congested with speculators,' meaning builders and investment groups racing to put up houses with no buyers in sight. 'Everybody is watching the speculative side of the market,' says (developer) James Kinney."

"A year ago, Scott Renken had orders for eight houses. This year he has six. He built two speculative houses in Highland Park and Lake Forest, each priced around $4 million, last year, but he doesn't expect to start any in 2006. 'We're turning more cautious,' he says. 'I don't see any housing bubble occurring. But I do see that houses at the high end are taking longer to sell. That will have builders reconsidering some of their plans.'"