Falling home prices is spreading to every corner of the nation's most populated state, hot on the heels of falling home prices that have plagued California for the last year.

Like the rest of the nation, declining home sales signaled the beginning of the end for a boom that spawned unsustainable home price appreciation and, ultimately, too many homes consumers couldn't afford.

In California, the boom began to wane at a time when interest rates were rising, incomes and job growth had failed to keep pace with home price inflation, rising energy costs were squeezing wallets and more affordable rental housing was coming on line.

Nationwide, home prices dropped on a year-to-year basis for the first time in more than a decade when the median price of existing homes slipped nearly 2 percent in August, compared to August 2005, according to the National Association of Realtors.

California, statewide, coming off a record year (2005) in sales and prices, is on track to follow suit.

In August, California's single-family home sales count came in 30 percent short of last August's and condo sales were down more 31.1 percent. The single-family median home price rose only 1.6 percent as the median condo price barely budged up 0.1 percent, according to the California Association of Realtors.

According to CAR, existing home sales have been declining in California every month since October 2005, months before prices even began to slip in select markets. Year-to-year home sales were down 17.6 percent in December 2005, but home prices were still rising at the rate of 5.6 percent.

It wasn't until early 2006 when declining sales began to pull prices down, first in the posh Santa Barbara coastal area, in the less populated hinterlands at the northern end of the state and in between, in portions of wine country north of the San Francisco Bay Area, as well as in Santa Cruz to the south of the Bay Area.

By mid-2006, declining home prices reached the Central Valley, the capital city of Sacramento, another beach community, Monterey, as well as San Diego, Palm Springs and other areas.

Each month shifts another California region or two into the falling home prices list and by August, 12 of the 20 regions tracked had home prices in the red with Silicon Valley, the city/county of San Francisco and other areas poised to join them in the coming months.

Edwina Baniqued