UNSOLD: Rebecca Knowlton stands behind the door of her home. The house, near new Corona developments, has been on the market two years. (Irfan Khan / Los Angeles Times)

Are you a homeowner who is having trouble selling your house? National housing experts say you can heap some of the blame on those big builders with their much-ballyhooed sales and the banks that have put too many foreclosed homes on the market.

And if that isn't enough to banish those Goliaths to Dante's Ninth Circle, some experts also hold them responsible for dragging down existing homes' sale prices in certain parts of the nation -- including communities in Southern California.

Locally, Delores Conway, director of USC's Casden Real Estate Economics Forecast, points to Riverside County as ground zero -- a place that was overbuilt, with new homes now being discounted by builders, and that is witnessing a sea of foreclosed homes on the market, with more expected. RealtyTrac reported last week that Riverside County led the state in foreclosure activity with one in every 330 households affected. Neighborhoods that just a year ago were flourishing are today blighted with house after house of "for sale" signs and properties abandoned to foreclosure.

How did this come to be? The crisis in the sub-prime mortgage industry doesn't shoulder all the blame, experts say.

There are three kinds of sellers, said Edward Leamer, director of the UCLA Anderson Forecast: builders of new homes, bankers and owners of existing homes. Existing homes' owners, by sheer numbers, dominate the market, yet sadly for them, their fate may be hitched to the wagons of the builders and bankers.

Home builders have excess inventory and are making deals left and right, Leamer said, often undercutting the listing prices of existing homes' owners who are trying to sell in the same development or nearby.

Last month, K. Hovnanian Homes, the nation's sixth-largest housing developer, showed just how low builders could limbo. It held what was dubbed the "Sale of the Century" and reduced prices of its unsold inventory in 19 states, including California, by eye-popping amounts: e.g., $300,000 off a $2-million model in Orange County. Some of the discounting was accomplished through financing incentives and offers of upgrades, but the mere announcement of the three-day fire sale caused Hovnanian's stock to jump 9.2%. Not bad for the builder, which had just posted a third-quarter loss and a 27% decline in sales. It sold 2,100 homes in the three days, compared with 2,579 homes sold in the three months ending July 31.

Dani Babb, a real estate author and consultant, spared Hovnanian no mercy over its banner sale.

"What Hovnanian did hurt everyone, including the long-term, broader market -- which includes them too," Babb said. She explained: The ability to get loans is based on comps -- the sales prices of comparable homes nearby. Now, homes near the ones for which Hovnanian slashed prices will appear inflated by comparison and may make financing more difficult.

"Hovnanian sent a signal to the entire consumer base that things are scary out there," Babb said.

But while Hovnanian's move may have ratcheted up the volume, new home builders have been busy cutting prices since early summer. Builders can't just sit tight and hold firm on listing prices, Leamer said, because they don't make money until the final phases of the project sell. Until then, they have loans to pay, expenses to meet and shareholders to satisfy.

And then there are those foreclosures listed for sale. With rare exceptions, when a lender forecloses on a home, it sits empty while the lender tries to sell it.

That makes sense, said Nicolas Retsinas of Harvard University's Joint Center for Housing Studies. "Banks and lenders aren't equipped to manage properties," he said. They would rather just sell the house at a discount than cope with renting it out to tenants who have no vested interest in keeping the home in tip-top shape for an eventual sale.

"Think about it: Have you ever met anyone who washed a rental car?" Retsinas asked.

Houses quickly deteriorate

Empty houses quickly deteriorate when there's no one to maintain them and can become eyesores, hurting existing home sellers' efforts.

Chris Silva is an agent with Realty Executives in Riverside. His business nowadays is primarily listing bank-owned foreclosures. He has 80 active listings in San Bernardino and Riverside counties and said he gets calls about listing more every week. A year ago, he listed only 10 bank-owned properties; two years ago, none.

Although the crisis in the sub-prime mortgage industry may have made those homes unaffordable for their owners, it is the builders and banks, said Silva, that are driving the home prices down.

"If I appraise a house and list it at $350,000, the tract lowers its prices to $320,000. . . . That's how it's going," he said. "And lately, banks too have been getting into the price-dropping game."