Dwindling mortgage options leaves Bay Area home sales mired in misery

The San Francisco Chronicle reports:

Vacaville, in eastern Solano County, was long an affordable alternative for home buyers who didn't mind a long commute to the inner Bay Area. But that market has changed substantially within months.

Larry St. John, owner of an insurance brokerage, bought a home for more than $900,000 early this year in a new development on the city's northwest side. This weekend, St. John said the builder - DeNova Homes - is planning an auction of more than a dozen similar homes, with starting bids about $300,000 less than what recent buyers paid.

"This is huge, this is our biggest investment," said St. John, 32, who has lived in Solano County his entire life. "I can understand a corporation taking losses to stay in business, but an individual taking a $300,000 hit is not something I have the capacity to do."

Too be long and wrong.