Riverside County home prices in November remained near recent lows, with growing numbers of bank-owned properties drawing bargain hunters and first-time buyers.

Houses and condominiums sold for a median $356,500 last month, a 17 percent decline from November 2006, according to research firm DataQuick Information Systems.

Foreclosed houses are coming onto the market in larger numbers across the county. Such houses are driving prices downward while boosting sales numbers from recent levels, a trend that is particularly strong in Southwest Riverside County, local agents said.

Keller-Williams agent Chris Parent said lenders find themselves paying more than expected in property taxes and maintenance costs after they seize houses from delinquent buyers. It's a bonanza for many of the 150 bargain-hunting investors and potential owner-occupants Parent represents, he said.

"They know they're walking into a phenomenal deal," Parent said. "It's the end of the quarter and taxes are due and banks are getting rid of the (houses)."

One couple Parent represents bought three houses in Murrieta last month, including one for $312,000, or $223,000 less than its most recent sale in August 2005. The couple are renting out one of the houses and have put the other two back on the market for substantially more than what they paid.

Just over 2,500 escrows closed in Riverside County in November, the largest number since August, according to DataQuick. The 310 existing homes sold in Southwest County last month also represented a three-month high.

Meanwhile, the Construction Industry Research Board reported Tuesday that local governments issued permits for building just 361 homes in Riverside County, the lowest number in at least five years.

Builders have been scrambling to sell off hundreds of empty tract homes across the county and the region, another factor that DataQuick cited for the lower prices in October and November. Builders have responded by cutting back their output, a move that could eventually push home prices back up, but only if the weakened construction industry doesn't drag down the rest of the economy.

The average sale price of existing houses in Southwest County has plunged 22 percent since November 2006, to $375,200, according to The Californian's analysis of sale prices from a database that real estate agents use. That's a level last seen in March 2004.

Several recent buyers said they got back into the market in search of those lower prices. All acknowledged the possibility that prices may continue to fall for another few months, but they also expressed confidence that prices would rise substantially over the next decade.

"It's the time for investing," said Troy Smith, who paid $478,000 last month for a house near Murrieta Valley High School that a lender had seized and then listed at $635,000 in March. "Nobody has that crystal ball. Nobody knows when it's going to hit bottom."

Real estate values have been sliding in Southern California since the early spring and summer of 2006, when they were hitting record highs across the region. Prices are still noticeably higher than they were in 2000, but many of the homeowners who bought into the market or refinanced since then are in trouble. Monthly mortgage obligations are rising for large numbers who used low "teaser" rates or payments, and those who fall behind are rarely able to sell the house for more than the remaining loan balance.

As a result, ever larger numbers of homes are falling into foreclosure after owners default on their loans. Lenders now own 1,852 properties in Southwest County, according to The Californian's analysis of data from foreclosureradar.com, a database for banks and investors. That represents about 29 percent of houses listed for sale locally.

But the number of local houses in earlier stages of the foreclosure process has fallen below 3,900 from about 4,100 in early November. That could eventually translate into fewer bank sales, though foreclosed houses appear likely to drive the market well into 2008, agents and analysts said.

"Last month shows how lower prices have lured some people back into the market," DataQuick President Marshall Prentice said in a statement. "But we'll need to see a sustained trend."

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