A report from the Chicago Tribune. "Applying the word 'crash' to sagging real estate markets in some parts of the country, a new study predicts that in the coming year, the nation's median home price will decline for the first time since the Depression. The encouraging news for the Chicago region, though labeled 'highly overpriced,' is that prices here probably bottomed out this summer, according to economist Mark Zandi, principal author of the study."

"David Lereah, chief economist for the National Association of Realtors, disagrees with the severity of the price downturn in the report. 'It's possible we could go under zero, if you include prices of new homes' along with sales data for existing homes, he said."

"Lereah agreed that broad price declines in some regions are unavoidable. 'I don't think I would use the word `crash,' he said. 'When you use a word like that, it's almost a self-fulfilling prophecy in the housing market. These are people's homes. Their retirement is depending on it.'"

"But Zandi defended the use of the word and his choice of 10 percent price declines as a benchmark. 'If you have less than 10 percent equity and your prices fall by 10 percent, you're toast,' he said."'

"Paul Kasriel, director of economic research at the Northern Trust Corp., disagreed on the Chicago outlook, saying the prices here had not stabilized. 'Not in my neighborhood,' he said. 'The same houses that have been for sale for six months are still for sale. Some of them have lowered their prices, and they still haven't sold.'"

"But Zandi sees a somewhat bright side. 'Even though this is a very serious correction, that these [market conditions] are things we haven't seen before, I am still arguing that the economy is going to hold together."

"'That's nonsense,' Kasriel said. 'The housing market is an accident waiting to happen. We're already seeing a slowdown in employment growth, and a lot of it is housing-related. We're also seeing a slowdown in consumer spending, and that's housing-related.'"

"'It's beyond me how something that has dominated the U.S. economy in the past four years and is clearly in a recession now won't have spillover effects on the rest of the economy,' he said."

The Capital Times from Wisconsin. "A record number of 'For Sale' signs around town don't lie. The red-hot housing market has cooled off big time, leaving nervous homeowners, frustrated real estate professionals and anxious business people all across the country."

"Even the Madison area housing market, often viewed as bulletproof, hasn't been immune from the downturn. The median sales price for homes sold in Dane County actually fell in August, the first time that has happened since the Realtors Association of South Central Wisconsin began compiling monthly statistics."

"The number of homes and condos sitting unsold in the Madison area has swelled by nearly 60 percent in the past year to a record 5,347, according to the association. That does not include another 1,100 area properties listed for sale on the FSBOmadison website."

"Marc Loy and Ron Becker bought a four-bedroom, two-bath brick home near Tenney Park for $160,000 and over the past 10 years have watched its assessed value more than double. They assumed when it came time to move on, the buyers would come knocking. But it hasn't happened that way."

"Their house has been on the market since July without one offer. They've cut $20,000 off the asking price to $329,000, and still no action. 'Everybody told us how easy it would be sell in this neighborhood,' said Loy. 'Of course, those were people who had already sold their house.'"

"Loy and Becker are moving to Cincinnati in January for a job commitment and have already purchased another home there. They aren't sure what to do if they can't sell their Madison home soon. 'We can't afford to pay two mortgages,' said Loy."

"In Mount Horeb, Joel Kahl's got an opportunity to buy his 'dream home' on wooded land from a relative in the town of Vermont. The catch is he needs to close by November. Kahl and his wife have slashed the asking price on their remodeled three-bedroom, two-bath raised ranch to $196,000, $16,000 below its assessed value. Still, no action."

"'I put a lot of work into this place, but it's looking more like I won't get my money out of it,' said Kahl."

"'The big question at this point isn't whether prices are going to fall - but how much,' said Morris Davis, associate director at the Center for Real Estate at the UW-Madison School of Business."

"David Simon, president of Veridian Homes, the area's largest homebuilder, has felt the pressures. In June, the builder cut 15 percent of its work force, and announced it was reducing the number of homes it plans to build this year to 500, down from more than 600. 'We're certainly watching our inventory,' Simon said."

"'I personally believe the correction is healthy because it tempers people's expectations and takes irrational behavior out of the decision-making,' said (realtor) Sheridan Glen of Madison."

"A bigger problem, Glen said, are the large number of upscale homes for sale in the suburbs. 'Sellers who are used to getting offers at 98 percent of their asking price are being forced to settle for prices that are discounted deeply,' he said. 'Right now, if you don't have to sell, I'd recommend not selling.'"

"Tamara Kaufman may be taking that advice to heart. She's gotten so frustrated trying to sell her three-bedroom, 1.5-bath home in Fitchburg she's ready to take it off FSBOmadison.com. 'It's been on there for three months and only four people have come to look at,' she said. 'I may just stay here for now.'"