California's housing slump worsened in September as worries about the economic effects of the Persian Gulf crisis pushed sales down 10.7 percent, a real estate trade group reported.

The drop-off in sales, the largest this year, was attributed largely to the buyer trepidation about a recession and volatile oil prices that arose in the wake of the Aug. 2 Iraqi invasion of Kuwait, according to Jim Antt, president of the California Association of Realtors.

"Many potential buyers stayed out of the market in August after the Middle East conflict erupted," Antt said. "As a result, we saw a substantial drop in September of closed escrow sales."

On an annual basis, the sales rate of existing single-family homes during September would have led to 381,080 houses changing hands this year. That activity rate is 26.5 percent lower than the figure for September 1989.

Sales had increased 1.6 percent in August, following five straight months of declines. The trade group noted that home sales often drop 2 percent to 15 percent in most regions in August and September, partly because the start of school limits buyers' willingness to move.

Prices, meanwhile, were off 1.5 percent in September, the sixth straight month of decline, with the median price of a single-family home at $190,350. That figure is 4.2 percent lower than the year-ago median of $198,740.

Antt said that the decline has been driven by an increase in popularity of less-expensive homes.

The overall California housing market -- once the hottest in the nation -- has been mired in a year-long slump, with sales off sharply in coastal urban areas like Los Angeles and San Francisco.

Prices in those areas soared during a two-year boom that ended last year and left many potential buyers frozen out of those markets.

The California Association of Realtors has already predicted a 14.9 percent slowdown in sales for next year, with the only growth coming in the less expensive inland areas, such as Sacramento, Modesto and Bakersfield.

But the trade group said that the sharp one-month decline experienced in September will probably not be repeated soon.

"The Persian Gulf crisis has caused a one-time jolt to the entire U.S. economy, but the ripple effect of that shock likely will dissipate during the next few months," said Leslie Appleton-Young, an economist with the trade group.

The trade group reported a drop in September sales activity in every region of the state.