The Capital Times reports from Wisconsin. "Talk about a tough term as president of the Madison Area Builders Association. Chad Wuebben has spent the past 11 months as front man for the industry trade group as builders suffer through the worst period in over a decade."

"Just 1,321 permits were issued for new single family homes or duplexes in Dane County through the end of November. That's down 39 percent from last year and barely half the number of housing starts during the 2003 peak. In fact, 2006 is shaping up as one of the toughest years in memory. And nobody seems to know where the bottom is."

"Not that a lot of people weren't warning the housing bubble was going to eventually burst. Madison proved that it wasn't bulletproof after all and Dane County is now among the most stressed markets in the upper Midwest."

"Wuebben is convinced the worst is over. 'I'm not just blowing smoke,' Wuebben said last week in commenting on the dismal construction numbers. 'Honestly, I've been getting more calls in the last three weeks than in the last three months. I really expect this is going to turn around by spring.'"

"First, however, the real estate industry must deal with a record number of homes for sale, or 'excess inventory' as the professionals put it. There are more than 5,200 homes listed for sale in south central Wisconsin, more than twice as many on the market as two years ago."

"So why do economists worry so much about a slowing housing market? It's all about consumer psychology. When home values are falling, property owners feel less wealthy even if they are not buying or selling in the near future. So they tend to spend less."

"Bruce Bittles, chief investment strategist at Robert W. Baird, in his 2007 outlook warns that if the housing plunge continues it could cause 'a highly-leveraged consumer to significantly reduce spending.' In other words, there is real risk to the U.S. economy since many Americans are already living beyond their means on money borrowed against inflated home values."

The St Paul Business Journal from Minnesota. "The housing market continued to sag in the Twin Cities in November, as sellers cut prices while buyers bided their time."

"Pending sales remain stubborn for the year, down 14.61 percent from one year ago. The change in pending sales from October 06 to November 06 was minus 11.14 percent, the lowest reported month-over-month decline since November 2000."

The Associated Press reports on Illinois. "It was a rare occurrence in a community with a national reputation for tearing down old houses: A developer bought the historic cottage at 327 S. Oak St. but didn't bulldoze it into oblivion."

"The norm in this leafy Chicago suburb and affluent communities around the country has been to allow builders to demolish older homes to make way for far larger, far flashier houses, dubbed 'McMansions' by critics."

"But a teardown tide that surged for a decade has begun to turn, largely due to a housing-market slump."

"As a five-year real estate boom fizzled this year, teardowns plummeted by at least 20 percent nationally, roughly corresponding to the drop in housing starts, said Stephen Melman of the National Association of Home Builders."

"National teardown figures are not compiled and difficult to assess, but the National Association of Home Builders has estimated that 75,000 houses are razed and replaced with larger homes annually. The National Trust says Chicago's suburbs, California's Bay Area, Palm Springs and neighborhoods around Washington, D.C. are among the hardest-hit areas."

"The potential profits of teardowns simply are too attractive to dissuade developers for long, said Daniel McMillen, who heads the Center for Urban Real Estate at the University of Illinois at Chicago."

"'I think some people might argue that the teardown market was a bubble and now that bubble has burst,' McMillen said. 'But I don't think that is the case. I think the teardown market will bounce back.'"