The Chicago Tribune reports from Illinois. "The housing market isn't dead, it's stuck. There's a standoff between home buyers and sellers, and the health of the 2007 housing market may depend on who blinks first, according to Chicago-area consumers, real estate agents and analysts who are scratching their heads about how to move housing out of the post-boom doldrums in 2007."

"'This situation is unknown to me, and I've been doing this for 26 years,' said Stephen Baird, CEO of Baird & Warner Real Estate in Chicago. 'The market is irrational right now.'"

"As that impasse has formed, home sales have hit the brakes. October home sales in Illinois were down 9.7 percent a year earlier, and when November data are released Thursday, few expect improvement."

"The housing thud seems to transcend the usual holiday-period slowdown, analysts say. Fitch Ratings, for example, recently said housing is in a fairly severe, multiyear contraction. It's being driven by perceptions, the Fitch analysts said."

"'A negative buyer psychology seems to have become pervasive,' Fitch reported this month. 'The expectation or fear is that home prices have peaked and buying now would be a mistake.'"

"Frustrated condo seller David Waters said he buys that. 'I suppose part of it is people are waiting to see if prices drop even further,' said Waters, who has been trying to sell his Edgewater two-bedroom unit since August, without a single offer despite several price reductions and incentive offers."

"'Because experts were predicting [the market slowdown], things tended to snowball,' Waters said. 'People bought into the fear that it's going to be a tough sell. When people start believing it, it makes it real.'"

"'I'm more of a second-quarter, third-quarter guy,' said James M. Merrion, regional director of Re/Max Northern Illinois. 'The NAR is a little too optimistic,' Merrion said. 'We've had too strong a market. When you've had prices go up in Illinois as much as they have in the past five years, people's salaries haven't increased that fast. I think we need to see some price moderation [brought on as sellers lower their prices] in order to get back to a healthy market.'"

"'I think it could take 18 months for the market to normalize,' said Naperville real estate agent Eileen Landau, who said the bloated inventory of homes must clear before the market will regain momentum."

"One year ago, about 28,000 single-family homes were listed for sale in the greater Chicago area, according to Alvin Wagner, president of the Headrick-Wagner Appraisal Group in Naperville. By the end of September, houses for sale had swollen to about 48,000, he said. By mid-November, the number had ebbed to about 43,000, or a 6.5-month supply, Wagner said."

"'I went to show two homes the other day and found they had taken them off' the market, said agent Karrie Lange, who said she suspects frustrated sellers are taking a break during the holidays and will be back early next year. If so, inventory will swell again, as old sellers replant their for-sale signs alongside the new listings that inevitably show up in January."

"Which would bring the market back to the blinking point. Most of the betting is on sellers budging first by cutting prices."

"'Sellers are in denial,' said Lange, based in La Grange. 'I don't think they realize how much inventory is out there. If the buyer doesn't think a house is a value, he will skip it.'"

"But others say it's not necessarily greed causing sellers to stick to their guns; many sellers who bought at or near the top of the market can't afford to bend much."

"Naperville agent Landau said the 'list-to-sell ratio,' may not paint a true picture of pricing strength in the marketplace. 'Right now, the majority of properties in Naperville, for example, are selling at 96 percent of list price. But that's not accurate because the list-to-sell is based on the latest price,' and ferreting out the original asking prices would tell a different story, she said."

"And the numbers don't account for the significant amount of houses that aren't selling."

The Herald News from Illinois. "A downturn in the local and national housing market has area builders searching for ways to bring in buyers. 'Sales have been slow at best,' Jeremy Sentman of Neumann Homes told Joliet plan commissioners recently."

"For a while the fast-growing areas in Will and Grundy counties were insulated from the cooling market in other parts of the country, said John Latimer, president of Will-Grundy Counties Home Builders and Associates."

"But builders with local projects have been feeling the pinch during 2006. 'The tract builders, they've really pulled back a lot,' said Latimer."

"Custom and semi-custom builders also have seen a decline in sales, said Latimer. The middle-range of the market, or homes selling from approximately $250,000 to $400,000, has experienced the largest slowdown, Latimer said."

"Buyers also are canceling contracts on new homes because they have had a hard time selling their existing residences. 'There's a lot of inventory on the market,' Latimer said."

The Detroit News from Michigan. "After lack of demand grounded an ambitious high-rise condo and retail project in Troy, developers...are looking for ways to redesign the project."

"Joseph Freed and Associates closed its sales office for The Monarch this month after pre-selling about 24 of 156 condos planned for the $104 million mixed-use development. Several factors hurt the project, including the local housing glut, the condo prices, $400,000 to $800,000, and the relative novelty of upscale high-rise living in suburban Detroit."

"'The design wasn't where the marketplace is right now,' said Kris Gosselin, director of sales. 'We want to be really thoughtful about what we decide to do given the current oversupply of homes on the market,' Gosselin said."