Crashing in Chicago

Chicago has become just another blownout bubbletown. City real estate developers sold 5,341 homes in last quarter; down 35 percent from a year earlier. Moreover, it is the weakest showing in more than 11 years. That is the latest findings from the real estate consulting firm Tracy Cross & Associates Inc.

Slow sales and rising inventory are gradually pushing prices down. The median sale price for single-family homes fell 1.7% to $299,470. However, the city center is awash with empty condos, with more coming onto the market every month. Prices have to fall much further before supply moves into line with demand.

The homebuilding sector is slipping into recession. Contractors and developers have slashed payrolls and stopped building houses on "spec". The Dallas-based Centex Corp., which sold 1,150 homes in the Chicago area last year, has cut its workforce in half.

Rising inventory, collapsing home sales, falling prices, and rising construction unemployment; the bubble is definitely over in Chicago.