The traditional spring home-buying season is off to its worst start in 20 years, data released Tuesday show, with sales so weak that foreclosures now account for more than one-third of all market activity.

Nearly 38% of Southern California homes sold in March had been foreclosed at some point in the prior year, up from 8% in March 2007, DataQuick Information Systems said.

In Riverside County, more than half of all sales were foreclosures.

That's helping to drive prices even lower, DataQuick said, because foreclosures typically sell at a 15% discount to surrounding properties.

The median price for a Southern California home fell below $400,000, to $385,000. Homes are now typically selling for what they fetched in April 2004, with the median price 20% below the market peak of $505,000 last year.

If there is a silver lining to that cloud, it may be the astonishing rate at which prices are plunging, said UCLA economist Edward E. Leamer. That might get the market to hit bottom sooner, he reasons, so a recovery can begin.

"Lower prices are part of the adjustment that has to be made," he said.

Home sales typically pick up in spring, when the weather gets warmer and parents of school-age children look to buy so that any move can be made over the summer.

This year was no exception: March sales in Los Angeles, Orange, Ventura, San Bernardino, Riverside and San Diego counties were up 18.8% from February.

But that increase, while welcomed by the real estate industry, pales in comparison to previous seasons. For the last 20 years, March home sales have on average been 38% higher than February sales, DataQuick said.

"We continue to believe a lot of people who could be buying or selling right now are opting to sit tight until they sense we've hit bottom," DataQuick President Marshall Prentice said. "Often what we're left with, especially in inland areas, are sales driven by foreclosure or the threat of it."

Homeowners who aren't facing foreclosure, meanwhile, often cling to outdated notions of what their properties are worth, real estate agents say.

David Emerson, a Lakewood real estate broker, said he was still able to quickly sell houses when owners priced them realistically.

A broker for 25 years, Emerson said much of his work now involved telling sellers what they might not want to hear.

"You go from being like a doctor who delivers babies," in a booming real estate market, he said, "to being an oncologist, just giving people bad news all day long."

Emerson also believes the worst is yet to come. "There are just too many foreclosures coming down the pike," Emerson said.

Natalie Neith, a Beverly Hills real estate agent, has also seen a modest pickup in open-house traffic and sales recently, but like Emerson she sees more foreclosures coming.

Neith credited a recent sale of a house in the West Adams area of Los Angeles to the seller's pricing it below others in the area. The four-bedroom Craftsman house could have been listed for $850,000 a few years ago, Neith said, but the owner priced it at $725,000 and sold it in a month for close to full price.

"When I talk to sellers now, I say you need to reduce your price. You have the prospect of thousands of foreclosures coming. That's going to be your competition," Neith said.

Nationwide, foreclosure-related filings -- including notices of loans in default -- were up 57% in March, according to RealtyTrac, an Irvine firm that sells default data. These filings include notices of loans in default, in which borrowers may be able to avoid foreclosure if they strike deals with their lenders.