UPDATE 1-Foreclosures fuel S. California July home sales

(Adds housing numbers, analyst’s comment)

LOS ANGELES, Aug 18 (Reuters) - Foreclosures fueled home sales in southern California in July to their highest level in more than a year, pushing the average price down by nearly a third, MDA DataQuick reported on Monday.

“What we’re looking at is a fire sale of properties in newer affordable neighborhoods that were bought or refinanced near the price peak with lousy mortgages. What we’re still not seeing is this level of distress spreading to more expensive or established neighborhoods,” John Walsh, MDA DataQuick president, said in a statement.

Southern California was particularly hard hit by the deterioration of the housing market.

Home and condo sales in six counties, including Los Angeles and San Diego, rose 13.8 percent to 20,329, the highest since March 2007, while the average price was $348,000, down 2 percent from the previous month and 31.1 percent from a year earlier. (Reporting by Peter Henderson; Editing Tom Hals, Toni Reinhold)