Chicago Business reports from Illinois. "Like the opportunists who quit their jobs to become day traders during the '90s tech-stock bubble, a herd of amateur builders in this decade has stampeded into the residential construction business, lured by years of booming sales and rising prices. These newbie developers have contributed to a flood of spec buildings that has, in turn, pushed the number of unsold new homes to its highest level in at least 17 years."

"In the third quarter of this year, the inventory of finished, unsold homes in the Chicago region reached 5,499, a 13% increase from the second quarter."

"Jeff Moudry broke ground on his first house in February. Mr. Moudry started construction on spec, but was so confident he could sell the house, a brick-and-stone four-bedroom in southwest suburban Shorewood, that he quit his job to work full time on the construction."

"Eight months later, Mr. Moudry has seen the torrid pace of home sales in the area slow drastically, and watched the inventory of unsold homes pile up, including another spec home for sale right next door for $649,000, his asking price. 'It is a scary market for people just getting into the business,' says Mr. Moudry. 'It makes you nervous thinking winter's coming and I'm going to sit on it all winter.'"

"Of the 14 active listings for the subdivision, all but one are spec homes, says broker Nicolette Berardi. That's a problem for Mr. Moudry, who is paying $3,800 a month on the $500,000 loan he took out to buy the lot and build the house."

"It looks like the end of a great housing boom that began in the mid-1990s, making thousands of homeowners wealthy and fattening profits at related businesses, from mortgage brokers to construction contractors."

"Jim Venhuizen feels the sting of Chicago's worsening housing slump about 10 times a day. Mr. Venhuizen, the owner of Cimarron Construction Inc. in New Lenox, takes that many phone calls from unemployed carpenters looking for work. Some are former employees he was forced to lay off in recent weeks as his business slowed along with home sales and construction."

"'It's not enjoyable,' he says. 'Some of them are going to have some real problems with mortgages.'"

"In the first nine months of 2006, sales of new Chicago-area homes fell 20% compared to the year-earlier period, according to real estate consultant Tracy Cross Associates Inc. In the third quarter alone, sales were down 32% compared to third-quarter 2005. Residential construction spending in Illinois fell 9% in the first nine months of 2006 from the year before, according to McGraw-Hill."

"Homeowners are sweating, builders are suffering and brokers are scrambling. Rick Levin is having his best year ever. Mr. Levin is a real estate auctioneer, putting him in that coterie of countercyclical businesses that profit when the economy turns south, a group that also includes debt collectors, bankruptcy lawyers and bond investors."

"Revenues at the Chicago-based auction house have tripled in the past year, as Chicago's residential real estate market has slumped. Mr. Levin's clients range from well-to-do property owners on the North Shore who can't sell their $2-million mansions to developers trying to cut their land holdings in a weakening new-home market."

"Some sellers agree to take any price. Others retain the right to reject a price deemed too low. In Mr. Levin's view, many sellers have yet to learn what 'too low' means in the present slowdown. They continue to expect the massive price appreciation of the past decade. At the same time, buyers tend to exaggerate the slowdown's effects."

"The disconnect keeps a lot of his auctions from leading to a closing. 'Sellers think it is 2005 and buyers think it's 1929,' Mr. Levin says. 'You can't get either side to blink.'"

"Still, he's not complaining. Mr. Levin estimates he will auction up to 500 Chicago-area properties this year, up from about 150 in 2005. He's looking to add about five people to his full-time staff of 10 and is eyeing new markets like Southern California, Arizona and Florida."

"On Nov. 15, Mr. Levin will auction five new homes in West Rogers Park. Originally priced at $899,000, the homes have been sitting on the market for about a year. The developer 'elected to sell them sooner rather than later and reduce their carrying costs,' says the firm's lawyer, John DeAngelis."

"Mr. Levin must be brutally honest with clients, especially homeowners who come to him as a last resort. 'Sometimes dashing their dreams about what their largest asset might be worth is a real sobering experience,' he says. 'I'm afraid that I've got a lot more of that in the next 12 to 18 months.'"