1 IN 4 HOMES IN COUNTY SOLD AT A LOSS

One out of four homes sold in Sonoma County this year was sold at a loss,

reflecting the erosion in housing prices during the recession following a

dizzying run-up in prices during the 1980s.

The figure, though unchanged from last year, was well below the statewide

average of 31.6 percent, according to a report Friday by DataQuick Information

Services.

''We may find it shocking that three of 10 sellers lose money, but we need

to remember that it still means most people are making money,'' said Donald

Cohn, chief executive officer of the La Jolla real estate information service.

Among Sonoma County sellers, the median loss was $11,500 -equivalent to a

5.9 percent loss on the original purchase price, DataQuick reported. Actual

losses may be even higher with the inclusion of closing costs, commissions and

transfer fees.

The bulk of the losses involved homes purchased around 1990 when prices

were at their peak.

''Length of ownership is the key factor,'' DataQuick analyst John Karevoll

said.

People who made a profit on their homes purchased them in 1987, on average

-- a time when prices were still rising. People who lost money bought their

houses in 1990, on average, just before the onset of the recession.

The study found 24.4 percent of the homes sold in Sonoma County during the

first 10 months of the year were sold for less than the seller had paid. A

year ago, 24.5 percent of the homeowners who sold their houses took a loss.

Money-losing home sales peaked in 1993, when 30.1 percent of the home

sellers in Sonoma County lost money. The market was much better for sellers

only five years ago in the opening months of 1991, when just 4 percent of the

home sellers in Sonoma County lost money.

One important factor driving down prices was the flood of houses onto the

market this year, said John Favre, a real estate agent at Prudential

California Realty. A larger supply of houses has forced sellers to drop prices

in order to compete for buyer attention.

Although interest rates have dropped, it may not cause housing prices to

start rising if inventories continue to grow, Favre said.

''At this point, we are still talking about whether prices are going to

continue to erode. We are not talking about stable prices, let alone whether

they are going to go back up,'' Favre said.

Statewide, the figures suggest housing prices have stabilized in parts of

California that were much harder hit than Sonoma County during the downturn in

the real estate market. Loss sales fell to 31.6 percent during the first 10

months, down from 34.7 percent last year and a peak of 42.7 percent in

September 1993.

''A lot of homeowners have put off selling during the past few years

because of declining prices. So a higher percentage of the homes that were put

on the market were put there because the owner was under the gun to sell for

one reason or another. Many of these 'have-to-sell' situations resulted in a

loss,'' Cohn said.

Several factors are giving real estate agents hope the market may improve

in 1996, said Mike Kelly, president of the Sonoma County Association of

Realtors.

''I think there is a little light at the end of the tunnel,'' Kelly said.

''All the factors are there. We have low prices now. We have motivated

sellers. We have low interest rates, and we have what looks to be a robust

economy.''

The study was based on a computer analysis of home sales in each county. It

compared the sales price of each home sold this year with its prior purchase

price.