Chicago Business reports from Illinois. "Dashing hopes that the housing slump would soon bottom out, new-home sales in the Chicago area fell even faster in the first quarter as the market meltdown spread from the suburbs to the city. Residential developers in the Chicago area sold 5,341 homes in the quarter, down 35% from a year earlier and the weakest showing in more than 11 years, according to a report."

"'Everybody was waiting for spring,' when buyers re-emerge, but 'it just didn't come,'" says Tracy Cross, president of a Schaumburg-based real estate consulting firm. 'This is definitely the steepest downturn we've seen' since the early 1980s."

"Recovery now appears further away, particularly in the city, where developers continue to build despite the precipitous drop in sales."

"'We've seen continued softening in April,' says Dan Star, Illinois division president for Dallas-based Centex Corp.. 'Traffic is down. Contracts are down. I think this will go on for another six months or year or longer.'"

"The supply of unsold condominiums in downtown high-rises under construction is growing even as demand is declining. Speculators have all but disappeared from the market. And developers are likely to face stiff competition from the resale market, as thousands of owners of recently built condos put their units back up for sale, Mr. Cross says."

"'You should see continued erosion in the city,' he says."

The Beacon News from Illinois. "The vast flow of people moving west into Kendall and Kane counties have insulated the area, although there's no denying things have slowed even here, said Dee Rechenmacher, a Realtor with Pilmer Real Estate and president of the Aurora Tri-County Association of Realtors."

"'This time last year, I had many multiple-offer situations,' Rechenmacher said. That hasn't happened yet this year, even though the traditional home-buying season is well under way."

"That doesn't mean houses are doomed to languish on the market for months, she said, but 'sellers have to get realistic with their pricing.'"

"Buyers now have the upper hand in the market, agreed real-estate expert Chip Wagner of the Headrick-Wagner Appraisal Group in Naperville. 'The investors pretty much left the market once the interest rates started creeping up,' Wagner said. And the entire Fox Valley area is now over-supplied with homes."

"Perhaps buoyed by the area's status as the second-fastest-growing county in America, developers nearly doubled their building permit requests last year in Yorkville."

"The city now has more than a 12-month supply of houses on the market. Realtors said that level of supply makes for intense competition on prices, between new and existing homes, with the latter often being forced to sell for little more than owners originally paid."

The Rockford Register Star from Illinois. "Clarice bought a home on Rockford’s near west side in 2005 with her then-fiance, Anthony. When it came time to sign for the home, they were looking at a mortgage of 11.85 percent, more than double what then was the national average of 5.65 percent for a 30-year mortgage."

"'I didn’t want to take the keys. I was crying. I didn’t want the house, not at that price,' Clarice said. The Register Star agreed not to use the couple’s last name. 'But we prayed and my husband said, 'God wants us to have this house.'"

"The couple couldn’t make even their first payment. Within six months, the financial institution that had bought their loan started foreclosure proceedings."

"Foreclosures increased 38 percent between 2005 and 2006 in Boone Winnebago and Ogle counties, from 661 to 912, according to county records."

"Put another way: 7,190 homes and condominiums sold in the Rock River Valley in 2006, meaning it’s possible nearly 13 percent sold because the owner no longer could afford the home. A look at the foreclosures filed in Winnebago County by ZIP code since the start of 2006 showed no areas are immune."

"Marve Stockert, executive director of the Illinois Association of Mortgage Brokers, which has about 1,000 member institutions, said there is no doubt 2007 is going to be a tough year. 'In the next 12 to 15 months, people are all of a sudden going to see their payments go up 15 percent,' Stockert said. 'People are going to be stretched way beyond their limits.'"

"Todd Kudlacik of Byron, who, according to a Register Star database of real estate transactions, has bought 81 homes and sold 74 homes on Rockford’s west side since the beginning of 2005 through his Rockford-based company, said the market on the west side of Rockford is going to be flooded with homes for sale, cheap."

"'The foreclosures have already happened,' Kudlacik said. 'What’s going on now is banks are building a portfolio of houses and they are going to turn them loose all at once.'"

"Kudlacik said this is actually the worst time to get into home restoration. 'There aren’t many buyers out there when you are finished,' he said. 'I bought a group of seven foreclosure houses last week and I walked through and saw that three had been rehabbed. The owners bought them, poured a bunch of money into them, got over their heads and lost them.'"

The Pioneer Press from Minnesota. "The West Side Flats condo project (is) going back to the drawing board. Developers have halted the project and are returning down payments, all seven of them."

"It's no secret that the condo market is soft, and real estate experts say it is especially difficult to sell buyers on a speculative idea such as the West Side Flats when so many completed condos are flooding the market."

"'I think the biggest problem is the condo market is oversold,' said Ralph Peterson of Coldwell Banker Burnet. 'They way overbuilt, way too fast.'"

"Peterson added that another barrier to sales is price. Lower-priced condos still sell, while the West Side Flats condos were priced from $250,000 to more than $1 million."

"The news should not be taken as a sign that the Mississippi River falls short as a selling point for development and St. Paul in general, said Patrick Seeb, executive director of the St. Paul Riverfront Corp. 'We're in the middle of a pretty profound slowdown in the housing market,' he said."