I am a lifelong City of Chicago resident and I have seen real estane climb at a steady pace until about 2003-2006 when the "real estate bubble" started. In Chicago, prices became super over inflated. This was in large part due to fraud. No surprise, the city I both love and hate is the most corrupt in the nation.

Realtors and developers sold homes back and forth to each other at purposely over inflated prices to make it look like homes were actually worth more. Unscrupulous appraisors took bribes or cuts of the sale for appraising homes for triple their value. An unwitting public was convinced that homes were worth 2 to 3 times their actual value and paid those prices.

So, can we trace the path of the ill gotten profits that were made? For example, I sold my home in 2001 for 9,000. The woman who purchased it from me sold it in 2006 for 9,000. Now the home is worth about 9,000 again. This means that she sucked out an extra 0,000 from the home that actually didn’t exist. Although I don’t know what she did with the money, let’s say she paid 9,000 for her new home which is now worth 9,000. Does it even out? She made 0,000 and then she lost 0,000. Where is the money? Is it back in the "system". Multiply this amount by every person who made astronomical gains in real estate. That’s billions of dollars in Chicago.

Where is this money? Where is its final destination? Can we trace it? Is it sitting in developers’ bank accounts? Since the prices were fraudulent to begin with and the resulting economy is a disaster it’s safe to assume once real estate bounces back it will not be at the extreme levels of 2006. So the equity people who overpaid had is forever gone, at least for 20 or more years. The money won’t magically reappear. So where is this missing money? Obviously the banks don’t have it. But I know it just didn’t disappear into thin air. Someone has a llarger piece of the pie than they did before.