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SAN FRANCISCO (Reuters) - Matt Bording doubts many in his financial bind would agree that home prices in California are near a bottom. And there are many in his predicament.
Bording owes more on his mortgage than his Richmond, California house is worth so he is giving up on the loan.
"We're walking away," Bording told Reuters, noting he will soon hand his lender the keys to the three-bedroom house he bought with his wife in 2005 because its value has plunged with his zip-code's median home price over the last year.
"It's down about 60 percent," he said. "I don't see that rebounding in a realistic time frame."
Brisk sales of foreclosures are leading optimistic analysts to forecast an end to the misery of falling home prices in California, a first step to recovery in a key housing market at the epicenter of the U.S. mortgage crisis.
But Bording says his neighborhood is full of for-sale signs for known foreclosures and the disrepair of other houses suggest their owners share his view: "They may want to jump off a sinking ship."
Some analysts say the slide in home values in California has run its course thanks to buyers with government mortgages and investors snapping up foreclosed properties.
"We're running out of foreclosed units in most places," said Alan Nevin of MarketPointe Realty Advisors in San Diego. "It looks like we're straightening things out."
The state's median price for an existing, single-family home rose 1.4 percent in April from March to $256,700, marking two consecutive months of gains.
The median fell 36.5 percent from a year earlier, but that snapped a nine-month run of year-over-year declines in the 40-percent range.
Additionally, April's backlog of homes selling for $300,000 or less, where foreclosures are concentrated, would take 2.5 months to deplete, compared with 11.1 months a year earlier.
Strong demand at the lower-end of the state's housing market is bolstering the segment's home prices, a first step for broader price stability, said Leslie Appleton-Young, chief economist for the California Association of Realtors.
"It appears that the median price is now at or near the bottom," she said.
Skeptics, however, say the sharply reduced backlog of foreclosures may only pause the slide in home prices because mortgage defaults are on the rise in upscale neighborhoods.
"I'd liken it to clearing some bodies off the battlefield. It doesn't mean the war is over," said Sean Snaith, an economist at the University of Central Florida and transplant from Stockton, California, a frequent contestant in recent years for the title of the nation's foreclosure capital.
A new mortgage default wave looms, skeptics add, noting the foreclosure rate on "prime" fixed-rate mortgages prevalent in upscale neighborhoods doubled in the last year and now account for the largest share of new foreclosures.
Home prices in California neighborhoods untouched by foreclosures so far face another threat -- curtailed lending of large mortgages. Without them, many "move-up" buyers are sidelined, reducing demand and asking prices.
Large loans were 10.5 percent of home purchase mortgages in California in April, down from about 38 percent in the first-half of 2007 before the credit crunch hit lenders, according to real estate information service MDA DataQuick.
The lending "pendulum" has swung so hard from lax standards it is now "embedded in the ceiling on the other side," said Lou Barnes of mortgage bank Boulder West Financial Services.
Sellers of higher-end homes in California are taking note. "Where houses used to sell for $800,000 or $850,000, some are down to $650,000," said Avram Goldman, president of Pacific Union Real Estate, a San Francisco area brokerage.
Editing by Cynthia Osterman