How China's housing market slid into a deep freeze

On Oct. 7, dozens of homeowners gathered at the sales office of a new residential development in Nanyang demanding refunds. The value of their homes had depreciated at least 30% in under a year after purchasing. The average price in a neighboring project by the same developer dropped more than 40%.

Nanyang, a city of 10 million in central China's Henan Province, is a microcosm of the real estate market in China's third- and fourth-tier cities. In the past few years, with large inflows of migrants from rural areas into smaller cities like Nanyang, developers such as China Evergrande Group and Country Garden Holdings rushed to build housing.