The Housing Crisis Spreads to China

Autumn is usually the busiest time for real estate salesman Wang Yaodong. Last September and October, for instance, he sold more than a dozen luxury townhouses in western Shanghai, but this year he has sold only one. "Everybody is waiting for prices to fall," Wang says.

Wang's lament is a common refrain in China these days. During the Golden Week holiday in early October, normally peak season for home buying, sales in the southern city of Shenzhen fell by a third from the previous week and the average selling price was nearly halved. In Beijing, software developer Answer Li has been looking at houses in the $100,000 to $200,000 range, but he's holding off because he fears further declines. "I don't dare take the plunge and buy a home," Li says.