Warm thoughts on cooling home prices as market slows

A couple of months ago, the newspaper headlines read "A ticking time bomb", referring to China's runaway housing market. More recently, the newspapers warned "Home sales plummet" and predicted sharp increases in property taxes.

If such headlines do not give you pause for thought, consider a cold hard fact: Beijing's biggest property agency, Homelink, reported an 8 percent drop in the prices of secondhand houses in May, according to a recent article.

Also consider the rapid changes in Beijing housing regulations over the past few months. First there were regulations that tried to reduce housing prices by requiring as much as a 50 percent down payment for purchases of second homes in the capital.