Of the three Polk County cities that I cover, I think Dallas will be hit the hardest. The average prices adjust a mere 2.6% downward over 2007 and the median price adjust 3.5% downward. 38% less homes were sold this year over last year, but homes listed dropped at only 9.7%. This discontinuity between the supply and demand for Dallas means that inventories are growing and will force prices to drop in order to correct the balance, or homes will have to come off the market to keep prices in place.
DOM for Dallas Oregon
The DOM (days on the market) increased for 113 last year to 125 this year. I would expect that number to increase for 2009. With the economy faltering and concerns about Oregon’s unemployment rate hitting double digits, I think the Dallas real estate market could experience some larger corrections than the other Polk county cities.
Dallas had a lot more new construction occur since 2006 than Monmouth or Independence. There was a dip in the supply starting in 2004 and as development grew out in Dallas, so did the headaches associated with overgrowth.
Unfortunately it takes a long time for a development to go through the process and before developers and builders realized we were heading for a downturn, they were already over building.
I would not be surprised to see Dallas home prices drop by 10% in order to correct for the massive amount of new construction they have on the market.