CHICAGO – When Tracey and Todd Fine were engaged, they purchased a two-bedroom condo in Chicago’s East Ukrainian Village. The price was high, but given the white-hot market in the adjacent Wicker Park neighborhood, they thought it was a strategic investment.

Today, their newlywed nest is a 1,200-square-foot obstacle course of toys and books. The couch stands a mere two feet from the dining room table, where their almost 3-year-old twins wave spoons of ice cream. Meanwhile, kindergarten — something that wasn’t even on the radar when they bought in 2006 — looms.

“We are stuck … and we can’t go anywhere,” said Tracey Fine, 34. She estimates they would lose more than $100,000 if their condo sold tomorrow.

At a different place in the life cycle is Suzanne Allison, an empty-nester with four bedrooms and a spacious yard.

Despite slashing her $360,000 price to $269,000, a “for sale” sign has hung on her Flossmoor, Ill., home for 900-plus days.

“I can’t pursue anything,” said the divorced mom of three. “It’s impossible to plan what’s next.”

The continuing economic doldrums and housing slump have significantly reshaped the mobility of Americans, who are accustomed to pulling up stakes for better jobs, schools or climate. With just 11.6 percent of U.S. residents moving during 2010, migration has slowed to its lowest point since World War II, according to William Frey, a senior demographer at the Brookings Institution.

“We are still stuck in the mud,” said Frey, who attributes it to a confluence of falling home values and tighter credit policies.

The paralysis ripples out beyond real estate, affecting communities in unforeseen ways, experts say. When people aren’t moving, retailers don’t sell as many appliances, swing sets or other durable goods. Builders, landscapers and moving companies lose out, which yields less sales tax and more unemployment.

“I liken it to musical chairs, but they won’t restart the music,” said Michael Hicks, an economist at Ball State University. “People are still forming families — they’re just not moving up in housing.”

With young adults unable to take traditional steps, schools are among the first to feel the pinch.

Take Crystal Lake School District 47, where school enrollment peaked in 2006-2007 with 9,200 students. Enrollment has fallen to 8,168 and is expected to shrink by another 1,000 students in the next seven to eight years, said Superintendent Donn Mendoza.

“The single biggest difference is in the number of exiting eighth-graders and incoming kindergartners,” Mendoza said.

Home prices in November were at 2003 levels, according to the S&P/Case-Shiller home price index.

“The situation is especially tough on younger people,” Frey said. “It’s one reason why we see so many putting off all the things that they would normally do in their 20s and 30s.”

Real estate agents said savvy sellers will price their home right and make it up on the purchase end, taking advantage of bargains, low borrowing rates and little competition from prospective bidders.

“Ultimately, it becomes a quality-of-life issue,” said Jim Murphy, who owns a real estate sales office in Frankfort, Ill.

“If you really want to get to the next stage, you may need to take the loss. … Otherwise, you could be in for a very long wait.”