I think that first, we need to look at markets like Santo Doming and Santiago, then most of the non-Coastal rural areas and finally the Coastal areas from a different angle. They are not comparable and their prices will react differently to external fluctuations.
If you do compare prices in Santiago and Santo Domingo with prices in Sosua, Puerto Plata, Boca Chica etc... you may find that big city prices are surprisingly more "reasonable" than in small Coastal towns which besides the promise of a glimpse at some "sea view" don't offer much of an economy and infrastructure. The concept of value versus only plain asking price may come to mind.
Santo Domingo down town (Poligono) as well as a limited stretch of the Malecon have in the recent years seen tremendous appreciation, mostly driven from new riches and business and also old money getting into the hands of more "hip" and aggressive heirs. Juan Dolio, in my opinion may be seen as a side extension of that market and I think that these markets may find themselves less affected by the word crisis we are seeing unfold, as there are a lot of BIG fish which have enough money to hold thru for a couple of years.
Punta Cana and Casa de Campo of La Romana certainly are a mix of the above and foreign money. Yet the foreign money, again comes from a small group of people, and while these developments may seem impressive, compared to the many, many developments of these sizes and standing... they're just a blip on the regional (greater Caribbean) map.
What really ought to worry some I think, is the situation in small towns along the Coast which really offer little or no economy or sizable business opportunities and have minimal or deficient infrastructure. These locations have profited over the last 5 to 8 years of a huge excess of cheap money available paired with a spending craze, not only in the US, but Britain and to some extent in Canada. It would seem obvious to most now, that this trend has not only stopped but reversed. Meaning, that not only will the buying pressure decrease, but that many who have "invested" here, using money from their equity in homes that have peaked in price about 3 to 4 years ago, now will need to get that money back home to save their homes or lifestyle.
Just as this market was driven by gringos gone wild, it will be buried by them too.
Some of this may go into history as a "healthy" and needed "correction", then when we compare prices of some of the real estate offered with what could be gotten for a comparable sum of money in locations like Florida (which makes up for a good example for it's climate and beaches and abundance of palm trees, but boasts a real infrastructure and still today "an economy"), most will probably at least have to ask themselves what they are getting into when buying a property of questionable qualities in the midst or at least surrounded by a problematic neighborhood.
On the other hand, let us not forget, that I huge number of people offering their property for sale, are not really in the business of selling but just fly a kite in the hopes to fulfill their version of the "American dream", which is to reel in a blindfolded gringo and get the better of him.
Hispanics are not the quickest to read the numbers on the walls and they can be awfully obstinate in their believe that they are born with a God given right to enjoy a constant rain of money. So, as posted, they actually believe in marketing moves like raising the prices in times of falling demand, which will however only make the final fall so much steeper.
Look at Spain! Same scenario.... and yet a country with an ECONOMY, when compared with the DR. But just as the DR, it's booming part of the real estate market depended from foreign investment. Then, the German, the Dutch and Swiss and finally the British had to retract and now, the housing, especially along the over decades so much appreciated Mediterranean Coast is in the cellar, and now expected to stay there for at least 3 to 4 years to come.
Just some thoughts... J-D.
