CALIFORNIA ECONOMY: MORE WEAKNESS : HOMES : Prices Rise in U.S., Fall in the State : Housing: The Los Angeles market saw the biggest drop--3.6%.

California’s weak economy pushed spring home prices below the level of a year ago in some of the sharpest declines in the nation, according to a report released Wednesday by the Chicago-based National Assn. of Realtors.

Nationwide, home prices rose an average of 2.9% during the April-June quarter, but relatively low interest rates failed to spur enough demand to lift prices in California and parts of the Northeast, according to the survey.

Led by a 3.6% decrease in Los Angeles and a 3.1% drop in the San Francisco Bay Area, five California metropolitan areas posted median price declines--the most of any state in the survey. Median home prices were off 1% in Anaheim-Santa Ana, 1.8% in San Diego and 2.4% in Sacramento.

Overall, the median price fell in 21 of 127 metropolitan areas surveyed by the realtors’ association. The median price is the point at which half of the homes sold for more and half for less.

“We had a very sharp run-up in home prices in the late 1980s; now the economy has turned sour and it’s hitting us especially hard in California and Southern California,” said Jack Kyser, chief economist for the Economic Development Corp. of Los Angeles. “People are reluctant to buy a home when they are not certain they are going to have a job. Once you get (home prices) over $200,000, the market gets decidedly ugly.”

California, which lost 170,000 non-farm jobs in the first six months of this year, has been trying to balance its budget amid a huge recession-induced drop in taxes and other income. What’s more, California’s important manufacturing sector continues to face retrenchment as weak foreign economies produce less demand for U.S. exports.

To some extent, the Northeast is experiencing similar economic woes manifested in slumping housing prices.

The biggest price decline in the nation, for example, occurred in Trenton, N.J., where the median sales price fell 8.6% from the year-earlier period. Other Northeastern cities posting price declines included Hartford, Conn., down 4.8%; Providence, R.I., off 3.7%, and the New York City area, down 0.8%.

By contrast, house hunters in the Pacific Northwest and parts of the Midwest took advantage of 30-year fixed mortgage rates averaging under 9% and fueled a sales boom in those regions in spite of the sluggish national economy.

Two Washington state cities posted the biggest price run-ups in the nation. The median home price skyrocketed 21.7% in the Richland area and soared 19.7% in Spokane, according to the realtors’ association.

Experts say the Northwest continues to be supported by strong local economies and an influx of former California homeowners.

The California refugees drew headlines and stirred resentment in the Pacific Northwest in the early 1990s, when locals accused the new arrivals of selling their California homes for huge profits and then running up Pacific Northwest home prices by overpaying.

Stephen Hyer, executive vice president of the Washington Assn. of Realtors, said housing demand is so strong in some of the state’s eastern communities that operators of the Hanford Nuclear Reserve, about 50 miles west of Walla Walla, recently had to temporarily curtail hiring at the facility because there weren’t enough homes to go around.

Biggest Changes in Home Prices

Home prices in California and sections of the Northeast fell in the second quarter, compared to a year ago. But they boomed in the Pacific Northwest and parts of the Midwest. the drop in California prices was greatest in the Los Angeles area --3.6%-- followed by the San Francisco Bay Area at 3.1%. Here are the metropolitan areas that had the biggest gains and declines for the period ended June 30:

Biggest Declines

Metro Area Median Price % Change 1. Trenton, N.J. $137,500 -8.6 2. Jackson, Miss. $65,300 -5.1 3. Hartford, Conn. $144,100 -4.8 4. Providence, R.I. $122,100 -3.7 5. Los Angeles-Long Beach $216,600 -3.6 6. San Francisco $262,000 -3.1 7. Sacramento $135,900 -2.4 8. Springfield, Mass. $115,600 -2.2 9. Daytona Beach, Fla. $66,700 -1.9 10. San Diego $185,200 -1.8

Biggest Gains

Metro Area Median Price % Change 1. Richard/Kennewick/Pasco, Wash. $83,500 +21.7 2. Spokane, Wash. $75,800 +19.7 3. Topeka, Kan. $68,700 +18.0 4. Tacoma, Wash. $108,800 +14.8 5. Sioux Falls, S.D. $69,000 +13.3 6. Cedar Rapids, Iowa $70,300 +12.7 7. Portland, Ore. $97,400 +12.6 8. Akron, Ohio $80,500 +11.3 9. Corpus Christi, Tex. $70,400 +10.9 10. Youngstown-Warren, Ohio $59,300 +10.0