As has been prophesized for years, a buyers' market has finally exploded onto the real estate scene -- on the Northwest Side, in outlying areas of Chicago, in the Cook County suburbs and nationally. As a consequence, the sales price for existing housing is stagnating, and the marketing time to achieve a sale is lengthening.

Over the past 15 years, in the sizzling sellers' market, demand for housing was so intense that sellers in many areas invariably got 95 percent or more of the asking price, and the property was sold within days, if not hours, of the listing. Those days are over. Here's why:

First, the bartering aspect of real estate transactions has evaporated. A buyer's mentality in a buyers' market is simple: Take my offer, or shove it.

In the recent past, sellers would inflate the asking price slightly over market value, and potential buyers would offer 90 percent of that price. As a result, the property would sell for at or near the real market value. In a sellers' market, buyers clearly understood that if they made some ridiculously below-market offer, another hungry buyer would top that bid, and the property would be gone.

Now, with the real estate market saturated with listings, buyers are offering as little as 75 percent of the listing price, and when rejected by the seller, the buyer doesn't counter with an 85 percent offer. Instead, the buyer just walks away, knowing that there are dozens, if not hundreds, of other dwellings available in that locale.

Second, this no-negotiation phenomenon becomes a self-fulfilling prophecy: Selling time is extended for listed properties. Existing properties, due to death, relocation or the desire to upgrade, come onto the market. That creates the perception, if not the actuality, of a glutted sales market, and that depresses listing prices further. Instead of a listing-to-closing time span of around 65 days, it's now closer to 5 months. Unsold listings of more than 90 days are becoming the norm.

Those seeking to purchase a more expensive home, with a contract contingent on the sale of their existing home, face a nightmare. As they repeatedly extend their sale contingency, the owner of the property that they wish to buy becomes increasingly irritated, especially if he is selling in order to upgrade. Just a few years ago, these contingent/contingent deals were customary, and they ultimately succeeded due to a brief listing time. Now sellers face the prospect of having to wait for up to 5 months for their purchaser to sell their home, which keeps their property off the market and cripples their ability to shop for a new home.

In addition, owners, lulled by years of media stories about their skyrocketing property values and determined to reap a substantial profit from their sale, are both perplexed and infuriated that they're getting, for example, $400,000 offers on housing which their real estate agent has assured them is worth $500,000. After all, housing supposedly has been appreciating at between 3 percent and 10 percent a year over the past decade.

As a result, sellers are becoming quickly dissatisfied, and they often switch their listings. "I want to be the third or fourth realtor because, by then, the price is realistically low enough to sell and I get my commission," observed one veteran Northwest Side broker. "Otherwise, I'm just wasting my time and have a very unhappy client."

Third, increases in the prime rate have had a significant effect on housing turnover. A home owner with a comfortable home and a mortgage with a 5.25 percent interest rate is hesitant to exchange that for a bigger mortgage at 6.75 percent or more. If, for example, the principal balance is $300,000, the mortgage principal and interest would be about $1,659 monthly at 5.25 percent and $1,947 per month at 6.75 percent. That's $3,456 more annually -- not a big difference -- but if one wants to upscale and buy a bigger, swankier home worth $800,000 or more, then the mortgage creeps into the $500,000 to $600,000 range and the monthly payment is approaching $4,000. That gives pause.

Of late, at least on the Northwest Side, the average turnover rate has been about 7 years on single-family homes and about 4 years on condominiums. Buyers can be categorized into two groupings, those that buy for comfort and pick a house or neighborhood with good schools and ambience in which to raise their family, expecting to remain for several decades, or those who buy for profit, upgrading their housing stock and using the equity in their current property to buy a better dwelling, expecting to sell again within a few years. In the latter category, the "$100,000 rule" reigns. That means the buyer upgrades the house, waits a couple of years until housing prices increase and a $100,000 profit can be made, and then unloads it.

The buyers' market has accelerated that trend, particularly in the medium-priced housing market -- homes selling for $250,000 to $400,000. According to Northwest Side real estate agents, ethnicity is the driving factor in current home sales.

Back in the mid-1980s, Polish and Eastern European immigrants flocked to the Belmont-Central area, initially renting. But then they began buying smaller frame houses, which they sold in the 1990s for a sizable profit. They moved to areas such as Jefferson Park and Albany Park or suburbs such as Niles, Harwood Heights, River Grove, Elmwood Park or Franklin Park, buying more expensive brick bungalows in the $200,000 range, and in the late 1990s and early 2000s they began moving into Park Ridge and into upscale Chicago neighborhoods such as Norwood Park, Edison Park, Galewood, Portage Park, Sauganash and Edgebrook, where housing was priced in the $400,000-and-up range.

A huge profit was made with each sale, which enabled the profit-seekers to upgrade. Now real estate agents ask: Who has the money to constitute the next wave of home buyers? And will current owners, comprehending that their profit will be lower than anticipated, decide to stay put? If that "bunker mentality" prevails, the Northwest Side real estate market will continue to fizzle, with few properties coming onto the market.

Hispanics are the "next wave." As Poles and other immigrants abandon Belmont-Central, they are replaced by Hispanics, many of whom are city workers. And they have displayed many of the characteristics of their ethnic predecessors, fleeing crowded areas around Logan Square and moving northwestward. Given Chicago's soaring Hispanic population and the expansion of upscale areas like Wicker Park, more Hispanics will be relocating to the Northwest Side.

But the "$100,000 rule" stands as a major roadblock. Entry-level homes in the $250,000 range are hard to find on the Northwest Side, although they are available in some western suburbs. In areas such as Sauganash and Edison Park, already filled with city and county workers, home availability is limited, and homes are in the range of $400,000 to $800,000 when they do come onto the market. The potential buyers of those homes need to sell their existing property and net a $200,000 profit, and in a buyers' market, that's not happening.

"It's going to get worse before it gets better," predicted one agent, referring to the flat housing market. Even title companies are suffering, with refinances dwindling to nothing and closings on sales down by almost a third through 2006. In the next decade, a lot of the Baby Boomers born between 1945 and 1955 will be retiring, which means that their properties will come onto the market.

So what's the solution? The obvious answer is a larger pool of buyers and 5.5 percent mortgages, coupled with a scarcity of available housing. Along the Lakefront and in certain trendy areas such as Wicker Park and Ravenswood, demographics are pushing home prices to astronomical levels. Younger whites, often professionals, have the resources to buy overpriced homes, condominiums and townhouses, and demand pushes the prices ever higher.

But on the Northwest Side there is no demographic yet apparent. Working class Hispanics are opting to buy property in Cicero, Berwyn and western suburbs such as Franklin Park, Elmwood Park and Northlake. First-generation European immigrants, with their families grown, have moved to Norridge, Park Ridge or Niles, or to the far-out suburbs, and there is no succeeding ethnic wave.

The bottom line: It's attitude adjustment time on the Northwest Side. A buyers' market prevails, and will persist. Whatever you think your property is worth, slice that optimistic estimate by 20 percent.