Home prices in Riverside County fell in April for the first time in a decade as buyers continued to gain market power from large numbers of unsold houses, a research firm reported Tuesday.

New and existing homes in the county sold for a median $409,000 last month, down 1 percent from April 2006, DataQuick Information Systems reported. Just 2,987 escrows closed, making April's pace barely half that of a year earlier and slower than any month in more than three years, according to DataQuick.

The research firm attributed the slower pace to stricter lending requirements that mortgage companies have begun to impose on riskier borrowers, a trend that DataQuick said may actually be buoying the median price it reports. The median is the level at which half the homes sell for more and half for less.

Real estate markets have slowed across Southern California for more than a year now, but the slowdown in Riverside and San Bernardino counties was significant, an economist said. That's because a relatively large number of borrowers with low credit scores have been flocking inland in search of less expensive houses, observers said.

Still, the stagnating market for entry-level houses and condominiums could affect the upper end of the market as sellers find themselves unable to cash out their home equity to spend it on more expensive houses, Chapman University economist Esmael Adibi said.

Riverside is the only county in Southern California whose median price has fallen since January; San Bernardino's median price remained unchanged at $370,000.

The situation in Southwest County is more dramatic. Median prices for resale houses fell from April 2006 in 11 of 12 local ZIP codes, according a separate report by DataQuick. Typical for the area was Temecula's 92592 ZIP code, whose median price fell nearly 8 percent to $454,500.

Just 409 escrows closed in the area, down 40 percent from the 685 that closed in April 2006, according to DataQuick. That trend is partly responsible for rising numbers of unsold houses in the area, real estate agents said in recent weeks.

The falling prices result largely from an unbalanced housing market, local and regional experts said.

"All of a sudden, you've got 10 properties and only one buyer roaming around out there," said Earl Bonawitz, who manages the Temecula office of Century 21 Wright, a real estate agency.

Bonawitz said many of his agents have been advising clients not to sell their houses only to lock in equity gains or move into a more expensive house locally. Unless a job change requires the move, it's probably not worth the time and expense, he said.

The local economy has been creating enough jobs to draw a steady trickle of buyers, though sellers can't necessarily get the prices they want, Bonawitz said.

"It's an issue of timing and pricing," he said. "You can price a house to sell today, or you can price a house to sell two years from today.

While Riverside County's real estate markets were especially strong in 2002 to 2004, that boom coincided with lesser booms across most of the country. Average mortgage rates fell from 8.5 percent in 2000 to less than 5.5 percent in 2003. Hundreds of thousands of homebuyers in search of the American dream pushed prices higher.

Thanks to a proliferation of financing arrangements such as no down payments and adjustable-rate loans with low introductory rates, home ownership came within the grasp of thousands more. But rates and monthly payments on many of those mortgages have recently begun to rise with market rates, driving thousands of borrowers into foreclosure.

The median price for existing houses in the U.S. fell 2 percent to $212,300 in the first three months in the year, the National Association of Realtors, an industry association, said Tuesday. It was the first year-over-year decline in two years.

Early last year, homebuilders were still breaking ground at a dizzying pace, expecting demand to ease only modestly. Since then, however, foreclosures have risen sharply, denting profits for mortgage companies who specialize in lending to subprime homebuyers, typically those with low credit scores. More than 50 subprime lenders have filed for bankruptcy protection or sought to be acquired since January 2006, according to a nationwide count by Bloomberg News.

The oversupply could take a couple of years to work through, Adibi said. Adibi expects median prices in Riverside and San Bernardino counties to fall by 6 percent this year from 2006.

Homebuilders have already slowed their pace and many are offering large incentives to sell off rows of empty houses. In the first three months of the year, for example, builders were paying referral fees to real estate agents at 88 tracts in Southwest County, compared to 29 tracts where they were offering such incentives in summer 2004, according to a quarterly tally by Kellie Tuer of Heritage Escrow in Temecula

"On the plus side, the economy of Riverside County is growing very rapidly," Adibi said. "Over the long term, people will still find Riverside and San Bernardino more affordable to move to."

- Contact staff writer Chris Bagley at (951) 676-4315, Ext. 2615, or cbagley@californian.com. Comment at www.californian.com.

Median prices of single-family homes resold last month fell in 11 of 12 Southwest

County ZIP codes, while rising in just three.

Community ZIP Price 4/06 Price 4/07 Pct. Change

Lake Elsinore 92530 $381,000 $356,250 -6.5

Lake Elsinore 92532 $535,000 $497,500 -7

Murrieta/La Cresta 92562 $487,000 $515,000 5.7

Murrieta/FV 92563 $489,500 $485,000 -0.9

Menifee 92584 $423,000 $385,750 -8.8

Sun City 92585 $375,000 $365,000 -2.7

Sun City 92586 $250,000 $220,000 -12

Canyon Lake/QV 92587 $458,500 $437,500 -4.6

Temecula 92591 $452,000 $444,500 -1.7

Temecula 92592 $493,000 $454,500 -7.8

Wildomar 92595 $463,181 $412,500 -10.9

Winchester/FV 92596 $483,000 $428,000 -11.4

Riverside Co. $413,000 $409,000 -1