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The real estate resale market in China has entered a stampede collapse situation following Xi's return to from the US. That is, sellers have been dropping prices precipitously hoping for a sale. Ironically, this has caused a further downturn in resale purchases as people already financially hesitant to buy wait for still lower prices. This triggers further price reductions. Rinse and repeat.

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This is what is known as a deflationary crisis...the entry point for a Great Depression.

As I have mentioned previously, the world economy is at approximately the point in the longwave cycle where it was in about 1930. The U.S. has so far avoided the GD trap by flooding the system with cash. For various reasons, China does not have this luxury (in part because $US is the reserve currency).

Just as you described, once prices are perceived as falling rapidly, no one wants to buy anything. It'll be cheaper next week, next month, next year.

Meanwhile the velocity of money grinds to a snail's pace. This simply means that those who have it are not spending it, creating a chain reaction through the economy.

(NOTE: The longwave cycle involves inflation/deflation, interest rates, commodity prices, technological innovation and other connected factors. To some degree it can be affected by Fed policy, fiscal stimulus etc.)