The Chicago housing market falters

Crain's Chicago Business reports:

Jim Venhuizen feels the sting of Chicago's worsening housing slump about 10 times a day.

Mr. Venhuizen, the owner and president of Cimarron Construction Inc. in New Lenox, takes that many phone calls from unemployed carpenters looking for work. Some are former employees he was forced to lay off in recent weeks as his business slowed along with home sales and construction. Most of the time, he can't help them.

"It's not enjoyable," he says. "Some of them are going to have some real problems with mortgages."

Mr. Venhuizen and his carpenters are among thousands in the Chicago area feeling the ripple effects of a housing downturn that appears to be gaining momentum.

In the first nine months of 2006, sales of new Chicago-area homes fell 20% compared to the year-earlier period, according to real estate consultant Tracy Cross Associates Inc. In the third quarter alone, sales were down 32% compared to third-quarter 2005.


It looks like the end of a great housing boom that began in the mid-1990s, making thousands of homeowners wealthy and fattening profits at related businesses, from mortgage brokers to construction contractors. The boom also attracted fortune-seekers — amateur developers and speculators looking to cash in on the sustained rise in home prices.

The thriving housing market spread its benefits around the local economy. Between 1995 and 2005, the area's housing-related workforce grew 26%, to an all-time high of 416,430. That compares with a 4% increase in all jobs over the same decade.

This story will probably play out nationally.