The Daily Herald from Illinois. "So much for the Chicago area being insolated from the sharp home sale downturns felt in other markets. Local home sales plummeted 23 percent in September, according to a survey. The September picture was dramatic. Illinois combined sales for single-family homes and condominiums dropped 19.5 percent from last year’s record, according to the Illinois Association of Realtors."

The Chicago Tribune. "That Chicago prices have not declined as precipitously as the sales figures may be due to a number of factors, experts say, and some warn that prices may be poised to head south. 'The sellers in Chicago are very stubborn,' said David Lereah, chief economist of the National Association of Realtors. 'They're not bringing their prices down, so sales are going down.'"

"Lereah says Chicago prices are in the typical pattern after a boom. 'Price always lags, so as sales drop off, prices will follow,' he said."

"But David Thorpe, for example, has lowered the price on his Glen Ellyn residence to $389,000 from $429,000 in March. He took it off the market Oct. 1, and he and his wife have moved to Naperville, will dress it up before relisting it in January. 'I just don't think there's any action out there right now,' he said. 'We had so few people look.'"

"Pete Flint, CEO of a residential real estate search engine, said speculative buying had fueled the price run-up in the last several years. Those investors generally have fled the market now, he said. 'Investors or speculators have disappeared completely,' Flint said. 'On a median basis, prices seem to be relatively steady and firm' because control of the market has reverted to ordinary consumers."

"Economist Ian Shepherdson expects the market to worsen and take prices with it. 'The longer-term downward trend in mortgage applications and sales should reassert itself over the next few months as people balk at using borrowed money to buy depreciating assets,' he said. He expects 'a steep and prolonged downturn' in housing, with sales and housing starts dropping 50 percent or more from their peaks." "

"Housing consultant Steve Hovany said home builders have been forced to cut prices and sell excess land. And many have quietly laid off staffs. 'They are trying to sell their last six or eight houses at some projects and want to get rid of them before winter, so they can start fresh in the spring,' said Hovany in Schaumburg."

"In Chicago, a report by a consulting firm said that condo sales in new buildings fell to about 700 in the third quarter, from 1,200 in the second quarter and 1,600 in the first quarter. About 5,700 new condos are being marketed in the downtown area, up by more than 1,000 from last year, said Gail Lissner of Appraisal Research."

"However, many of those condos have yet to begin construction, she said, 'and some projects may not be built.'"

From Chicago Business. "The number of Chicago-area homes entering some stage of the foreclosure process increased in September, keeping the metropolitan area’s rate at more than twice that of the nation. A total of 6,177 homes in the eight-county metro area were in the foreclosure process last month."

"'I wouldn’t be surprised if (foreclosure numbers) go higher than that,' said David Rose, director of research for the a consumer advocacy group in Chicago. 'If the second half of the year is anything like the first half, we are going to see a jump.'"

"Mr. Rose’s organization tracked 4,695 foreclosures started in Chicago for the first six months of the year. Last year, the city had 7,575 for the entire year. He said the housing boom of the late 1990s and early 2000s is proving to be problematic for consumers who find themselves financially stretched in the economic slowdown."

"'A lot of people were getting into houses they couldn’t afford with teaser rates,' he said. 'Then the loans reset and they get into trouble. We’ve got some rough times to look at in Chicago and we will see pockets of housing where the prices are not rising,' Mr. Rose said."

From USA Today. "Javier Diaz's made several profitable real estate investments, but the three-unit apartment building he bought in Chicago earlier this year wasn't one of them. 'I figured this year the property would go up 30 or 40 grand, but that didn't happen,' says Diaz."

"He put it up for sale in September, asking $415,000. He's already cut the price twice, to $375,000. That's less than he owes on his loan, which means that if Diaz sells at that price, he'll have to pull $5,000 out of his own pocket to pay the bank."

"Being a mortgage broker, Diaz knows some investors who used their home equity like debit cards. He says of the quick decline in real estate, 'It's coming like a culture shock to many.'"