UPDATE 1-So. California April home sales surge on low prices

(Adds analysts' comments)

By Jim Christie

SAN FRANCISCO, May 19 (Reuters) - The housing market in Southern California roared back to life with a record one-month sales increase for April as a glut of foreclosed homes lured bargain-hunters, according to a private report on Monday.

Sales in the region jumped 21.9 percent in April to the highest level in eight months and rebounded from March, which was the worst month for sales since DataQuick Information Systems Inc started compiling its information in 1988.

Sales on average rise around 1 percent in April from March, according to DataQuick.

Sales were strongest for homes priced less than $500,000 in inland areas hardest hit by crashing prices and record foreclosures, the real estate information service's report said.

"Quite a few more buyers stepped off the sidelines last month to snap up homes at substantial discounts," said Marshall Prentice, DataQuick's president.

"It's no surprise, given the magnitude of the price declines in inland areas and the fact sales have been so amazingly low for so long," Prentice said.

A total of 15,615 new and resale houses and condominiums sold last month in the region -- Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties. While sales rose from the previous month, they were still down 19 percent from a year earlier, marking the weakest April in 13 years, the real estate information service said in its report.

The median price paid for a home in the region last month was $385,000, unchanged from March and down 23.8 percent a year earlier when the region's median peaked at $505,000.

"Last month was the first in eight months that the median did not decline on a month-to-month basis," the report said.

Southern California's home sales may be stabilizing, said Stephen Cauley, director of research at the Ziman Center for Real Estate at the University of California Los Angeles.

"You've got decreases in prices and low interest rates and that's a deal you can't beat," Cauley said.

But home values in California's most populous region could resume their slide if lenders begin to dump their glut of foreclosed homes at firesale prices or if prospective buyers are unable to secure the jumbo loan financing needed in healthier markets.

"It's premature to think we've hit bottom ... There is a lot more stuff that will hit the fan over the next 12 months," said Mark Riedy, executive director of the Burnham-Moores Center for Real Estate at the University of San Diego and a former president of Federal National Mortgage Association.

Riedy said he is most concerned about the availability of mortgage financing amid turmoil in the mortgage market.

Before the credit crunch took hold in August, nearly 40 percent of home purchases in Southern California were financed with jumbo loans.

By contrast, last month 15.1 percent of the region's home purchases involved jumbo mortgages, or loans for more than $417,000, indicating lenders have tightened standards and buyers have taken advantage of beat-down home prices, according to DataQuick.

Of all resale homes in Southern California bought in April, 37.5 percent had been foreclosed on at some point in the prior 12 months, compared with 4.6 percent a year earlier, according to DataQuick.

Foreclosure sales ranged from 26.9 percent of home resales in affluent Orange County to 52.7 percent in Riverside County, the "epicenter" of the region's foreclosure activity.

Riverside County was the region's only county to post a year-over-year rise in home sales last month, a gain of 6.7 percent also marking its first increase in sales from year-earlier levels in two years, DataQuick said. (Reporting by Jim Christie; editing by Tom Hals)