Chinese Real Estate Bubble Losing Air?

LA Times (h/t Ritholtz):

Falling home values. Debt-strapped borrowers. Real estate woes dogging the economy. It's old news in the United States, but now the air has started to leak from another great housing bubble — in China.

Home prices nationwide declined in November for the third straight month, according to an index of values in 100 major cities compiled by the China Index Academy, an independent real estate firm. Average prices in the Shanghai area are down about 40% from their peak in mid-2009, to about $176,000 for a 1,000-square-foot home.

Sales have plummeted. In Beijing, nearly two years' worth of inventory is clogging the market, and more than 1,000 real estate agencies have closed this year. Developers who once pre-sold housing projects within hours are growing desperate. A real estate company in the eastern city of Wenzhou is offering to throw in a new BMW with a home purchase.

The swift turnaround has stunned buyers such as Shanghai resident Mark Li, who thought prices had nowhere to go but up. The software engineer closed on a $250,000,  three-bedroom apartment in August, only to watch weeks later as the developer slashed prices 25% on identical units to attract buyers in a slowing market.

Zoinks, 25% price cut?  That stings.  Just when it looks like the U.S. might be crawling toward a recovery, Europe is falling apart and the Chinese Communist "expertise" in capitalism is starting to show weakness.  We sure don't need both of these economies to go in the crapper.