BEIJING (TheStreet) -- As recently as March, the Nasdaq-listed property developer China Housing and Land Development (CHLN) was still boasting in Securities and Exchange Commission filings about great growth potential in "fast-growing tier II and tier III cities in western China."

But at that time China's real estate market -- a pillar of the nation's economy -- had already started a slump that's continuing today. Hardest hit are smaller cities including the tier II city of Xi'an, where China Housing does most of its building.

So it may have been no surprise to anyone who watches China and its U.S-listed companies when China Housing announced Monday a plan to go private and leave the Nasdaq Global Market. Trading was suspended in the stock, which listed in 2006 and was down 27% for the year to date.

A company press release said shareholders would be asked to approve a board plan for "a reverse stock split shares of our common stock, whereby every 50,000 shares of our common stock issued and outstanding will be converted into one whole share of our common stock." Smaller stockholders would get $1.75 per share from the company's cash on hand.

China Housing did not give a reason for the move, but the weakening property market may have played into the decision. The company, in its March SEC filing, said that as of March 31, "we had $14,935,316 in cash, compared to $21,320,071 as of December 31, 2013, a decrease of $6,384,755." It gave no further explanation.

China's years-long real estate boom was fueled by speculation, urbanization and support from governments as well as state banks. The bottom started falling out last year when banks tightened lending, mom-and-pop real estate investors pulled back and developers started slashing prices on new homes to maintain cash flow.

Between January and July, according to a National Bureau of Statistics report released last week, sales of residential floor space fell 9.4% nationwide from the same period last year. Commercial floor space sales declined 7.6%. Sales of whole residential buildings dropped 10%, the bureau said, while office building sales declined 14%.

Meanwhile, a research firm survey of 100 cities found the average price of a new home fell in July for the third consecutive month.

The slump is hitting even tier I cities such as Beijing, where total housing turnover in the first half fell 38% from the same period 2013 to about $12 billion, the lowest in at least six years, according to Centaline Property Research.

In hopes of salvaging their local property markets, dozens of cities around the country have relaxed restrictions on home ownership, pricing and credit that were imposed several years ago to tame speculation. But state banks reportedly have been ignoring requests for easier mortgage lending.

On the other hand, the slump has so far had a negligible affect on the mainland's biggest developers such as China Vanke, which is preparing to list in Hong Kong, and companies focusing on government-funded slum redevelopments such as Nasdaq-listed China HGS Real Estate (HGSH) - Get Report .

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

TheStreet Ratings team rates CHINA HOUSING & LAND DEV INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHINA HOUSING & LAND DEV INC (CHLN) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and weak operating cash flow."

You can view the full analysis from the report here: CHLN Ratings Report