DESOTO - Dallas County appraisals started hitting mailboxes Monday and over the weekend.

One foreclosed home has become an extreme example of how the falling market in North Texas is affecting home prices.

In 2005, the home was valued at $263,000. Last year, the value dipped to $220,000. Now, it is worth $179,000, which is a nearly 20 percent drop in one year.

There are fewer for sale signs now in the Candle Meadow subdivision in DeSoto. Buyers and investors snapped up many of the dozens of foreclosed homes after they dropped in value up to 25 percent.

Alfred Bethea moved in his home five years ago and saw the value rise to $203,000. Now, that number has dropped to about $147,000.

“Yeah, I was surprised, really," he said. "I was really surprised how low it is and the way the economy is.”

Bethea is in the Army National Guard and ships out soon for a year in Iraq. He said he hopes home values will rise by the time he returns.

John Burkhalter bought the third house available in Candle Meadow when it opened in 2001. His home value just fell to $149,000 after peaking last year at $172,000.

He said he is hopeful the recent sale of the foreclosed home next to him to an owner who will actually live in the home is a sign the worst is over.

“The economy got so bad it, got so low, they got a 4,500 square foot house for little or nothing,” Burkhalter said.

Candle Meadow typifies neighborhoods reeling from falling values from the mortgage and foreclosure crisis.

But homebuilding continues nearby, and that’s a positive sign that people like the area and that bad financing was at fault.

The city of DeSoto said home values will go up just 3 percent this year. While that is half as much from last year, it's still up.

“There will be no tax increase in DeSoto," said city spokeswoman Kathy Jones. "We are tightening our belts ...appropriately to make sure that we stay within our spending means and there will be no increase in DeSoto.”

If there's any silver lining for homeowners seeing their values shrink, they should pay less in taxes this year.