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But Lereah doesn't foresee a plunge -- the widely discussed "bubble scenario" in which inflated home prices reach a point where they drive away buyers, causing sales and then prices to nose-dive.

Instead, he sees a gradual shift. "Sales are expected to coast at historically high levels into next year, but they will trend slightly downward," he said.

They're trending already. Last Tuesday the association reported that sales of existing homes nationwide dropped 2.6 percent in July, with a nearly identical year-over-year sales slippage in Illinois. In the nine-county Chicago area, single-family sales were down 5.6 percent.

The next day the Commerce Department reported that though the nation's new-home sales climbed yet again in July, by 6.5 percent, Midwest sales were down 7.7 percent.

Other signs of a shift continue to pile up:

Mortgage rates, though still at the historical lows that have coaxed many buyers into the market, are now trending upward. The average 30-year fixed rate loan is at 5.8 percent, according to Freddie Mac, compared to 5.5 percent in June.

The median price of a newly built home declined in July, for the fourth straight month.

Private market analysts have begun to churn out rankings of what they say are overheated metropolitan markets, where housing prices are most in danger of decline.

Home prices in the San Francisco Bay area, perennially Exhibit A in the case for real estate excess, fell 11 percent in July, continuing a decline that began in April. Local analysts said they see evidence of a "major slide."

Talk of the current prospects for "the bubble" has become an evening-news staple and is fueling endless cocktail party conversations and Internet blogger musings. Even analysts who have stoutly defended the vigor of the housing market have begun to weigh in on whether it has reached a plateau.

The chorus even extends to the president of the NAR, who recently made a distinctly un-boosterish suggestion to consumers.

"It's a great time to sell, but it may be a better time to buy about a year from now, when the market should come closer to balance," said Al Mansell, a Salt Lake City broker, in a recent economic-outlook statement.

Mansell's unusual wait-to-buy advice disappeared from the press release shortly after it was posted on the National Association of Realtors Web site. (A spokesman for the trade group said it was excised because it had been taken out of context by some who viewed it, incorrectly, as a pronouncement that the bubble was popping.)

Chicago-area real estate agents say they are still seeing plenty of buying activity, though houses are lingering on the market longer. Some also say they are starting to see more sellers reduce their asking prices. And sales of the most expensive properties in some areas are nearly at a standstill.

Overall, the question is getting harder to avoid: Are we there yet? Is the Great Housing Run coming to an end?

Many Chicagoans apparently think not.

"I feel very confident of the market," said Christian Nelson, who is trying to sell two condos -- one in Bucktown, the other in the South Loop--because he has decided to stay in the Army instead of moving to Chicago from his base in California. He has reduced the price by $10,000 on the South Loop unit because, at $259,900, the one-bedroom condo without parking was not getting offers. But he's not worried.

"It's not the tech bubble," said Nelson. "It's not like buying a stock that goes from $150 a share to $3. You can't do anything with that [stock], but people still need to live someplace. I feel fully confident that people will continue to see their property values increase."

He is concerned, though, about overheating in Florida, which has become renowned for its near-frantic level of speculation.

In Miami alone, more than 70,000 condo units and apartments are under construction or on the drawing board, and there is widespread concern that huge numbers of speculators hoping to "flip" condos will flood the market and bring on a crash.

"I don't think that same sort of frenzy is in Chicago," Nelson said.

Vicki Donnowitz also sees Chicago as insulated from volatility. The North Shore investor has accumulated a portfolio of 28 units across the area in the last 18 months.

"In the Midwest we haven't had the same [price] spikes that we've had in California and on the coasts. I lived on the East Coast, and I think there's a bubble there," said Donnowitz, whose investment activity spurred her to get her real estate license. "The market is going to hold up for the long term in the Midwest."

John and Susan Skarren of Arlington Heights recently put down a deposit on a pricey 35th-floor one-bedroom condo at 600 N. Lake Shore Drive, though the building's construction has barely begun and they won't close the deal until 2008.

"It's a real leap of faith on our part," Susan Skarren said, acknowledging that it's a long wait. She said she has heard the concerns that the 10,000 new condo units now planned for downtown Chicago may amount to overbuilding.

"We thought about that, but only for a second, because we know that's where we want to live," she said. "We're not looking at it as a short-term situation. It's a long-term situation."

Many economists have maintained throughout the housing boom that Chicago's broad economic base probably would shield it from the "price correction" they see as inevitable in parts of California and Florida and in other East Coast cities.

For example, while median single-family home prices in Chicago have jumped 50 percent in the last five years, statewide prices in Florida are up 100 percent in the period, according to local real estate associations.

Richard DeKaser, chief economist for National City Bank in Cleveland, has tracked 20 years of single-family home prices for 299 metro areas around the country and doesn't place the greater Chicago area in what he calls the "red zone," the 53 markets, representing 31 percent of the nation's housing market, that he considers "extremely overvalued" because prices exceed statistical norms by 30 percent.

"But Chicago isn't far off -- it's overvalued by 19 percent," he said.

DeKaser sees two possible outcomes, nationally. The first, he said, would be "an orderly adjustment," with price appreciation slowing gradually and "establishing a more normal relationship to incomes."

Or, more ominously, he sees "an orderly crash."

"Things could get stretched to the point where the overvaluation becomes extreme, coinciding with a weak economy and a drop in local employment," he said.

At the moment, he's leaning toward the former, but worries that buyer behavior--he calls it "self-reinforcing price increases"--will throw the fundamentals a curve.

"In a bubble the price increases actually excite more demand, because there's a belief that failure to buy in today will limit one's ability to buy tomorrow," DeKaser said. "That's when higher prices don't imply a need for buyers to sort of sit on the sidelines, but rather to get in while the getting is good."

Washington economist Dean Baker says Chicago prices should be cause for worry.

"Chicago has had this big price run-up, and it's one of the places where you shouldn't expect to see it," said Baker, co-director of the Center for Economic and Policy Research.

"Areas that are closed in, such as San Francisco and New York, those are the areas where you have restrictions [on the amount of buildable space], and you would expect more of a run-up," Baker said. "In Chicago, you could always build another five miles out, and you have high-rises going up that would expand the supply and keep prices in check."

Baker is so convinced of the risk of a nationwide bubble that he sold his Washington condo in May and became a renter.

"It had about tripled in value," explained Baker. "We bought it in 1997 for $160,000 and sold it for $445,000. Now prices have pretty much leveled off.

"Here I was, sitting right in the middle of a bubble neighborhood," Baker said. "Should I stand there and watch the price drop by a third? That would have been plausible.

"I wasn't just trying to prove a point. I believe what I'm saying. To me, I was looking at a place that's selling for $450,000 today that might be $300,000 tomorrow."

That's the scenario that Joe Becker fears, and he's considering renting a fancier apartment instead of buying, while he watches where the marketplace is going.

North Side apartment-leasing manager Maurice Ortiz says he's starting to hear similar sentiments.

"We're hearing requests now for short-term leases from people who want to buy but they also know that the interest rates may be going up," Ortiz said. "It comes up all the time. We're getting requests for six-month leases, and that's new."

North Shore real estate agent Honore Frumentino says the go-go of recent memory has gone--mostly.

"Prices did get a little carried away, and we're starting to see buyer resistance to prices. There is a bubble fear, and people are more cautious," she said. She says she advises would-be sellers of the most expensive North Shore homes that they may have to wait for a buyer for a couple of years.

"There are 132 houses at the moment that are listed for $3 million and up," she said. "There just aren't 132 buyers for those properties."

Still, the longtime agent describes the state of the market as "confusing."

"Just when you think they're right, that there's a bubble, all hell breaks loose and we sell seven houses in three days," she said.

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