I'll preface this comment by stating that all this is a matter of opinion, and that real estate investing requires a stomach for at least a little bit of risk.
Let's start with the two, very general types of real estate, residential and commercial.
In my view, residential properties, from condos to large multifamily apartment buildings are affected by the overall need for housing. Housing is a need that every human being has, and is subject to the supply of housing vs. the demand. Housing need, thus far, does not seem to have decreased in Chicago. How people are resolving their need for housing has shifted. A lack of mortgage products and a lack of consumer confidence (generated by declining home prices and economic conditions) has pushed would be home buyers into renting. The cost of renting in most areas appears to have increased (anecdotally), while the cost of buying has defiantly decreased. It is my opinion that now the after tax cost of buying is lower than renting in many areas. It's hard to believe that prices will continue to fall in these areas if mortgage products to help finance buyers continue become more available and cheaper. It doesn't make sense to rent for more than it cost to own. If the cost of renting goes down, there's the risk. For large residential investment properties, many property owners have had to sell because of various reasons (need for liquidity, no financing alternatives, etc.) I'm working with a few investors that are seeing larger cash flow and better cap rates on large residential buildings available to them on the market. For them, it's a great time to buy.
In short, at some point it makes sense to buy to fill a housing need and buy real estate for investment purposes.
Commercial real estate is not my forte, but is subject to larger economic variables. As rents for retail and commercial space decline with poorer consumer spending, the value of the asset will also decline. I'm not sure where this is heading, but right now it doesn't look great.
I certainly wish you the best of luck. I would encourage you to look at your alternatives and decide what is best for you. I also noticed that you indicated you are a seller and a buyer. Think of it this way. When you sell in this market, you may not get as much as you'd like, but how much of a deal will you get when you buy?
Also of note, buyers are getting more comfortable with short sales and foreclosures. Realtors are getting used to the common nature of this transaction. It used to be, very recently, that short sales and foreclosures would scare off would be buyers. Now buyers are moving forward with these sales and the stigma is diminishing. The market will become balanced at some point. The question is when.