San Diego home sales in October were the lowest in four years, falling 8% from the same month last year, according to the San Diego Housing Market Monitor report. The report, which is produced by The Berkland Group, says the decline was across all price ranges, the largest being in the $500,000 to $900,000 price range.  It attributed a reduction in demand to lowered mortgage limits. On Oct. 1, FHA loan limits were lowered from $729,750 to $625,500. The Berkland Group said its research found that the biggest price drops year-to- year were for homes selling for $600k to $800k, which is the price range impacted by the new loan limits. The lower price ranges, below $400,000, represented 68% of total sales, down from 36% of total sales four years earlier, indicating that affordability remains a problem, the company says in the report. Within its six geographic regions, sales were flat in two regions, and fell in four regions. Sales plunged 17% in South Bay and North County Coastal. Foreclosures and short sales comprised nearly 50% of total sales in the San Diego housing market while only making up 35% of the homes in inventory. Distress sales sell for less than regular sales and therefore are attractive to buyers trying to maximize their purchasing power. Additionally, both inventory and pending sales fell in October, with the former declining by 4% and the latter by 7%, respectively, leaving the month's supply at 3.9 months. The monthly supply depends on price range. The report states that homes priced under $500,000 have months supply in the range of 2.4 months to 3.9 months, while homes over $500,000 have months supply in the range of 5.2 months to 17.9 months, the report states. House prices in San Diego fell 3% from last October and were about 35% down from peak prices. "As long as prices remain off their peak, homeowners who bought or refinanced at the peak can divest themselves only via foreclosure or short sale," the company said.  "Thus, distress sales will be with us for some time, which will continue to put downward pressure on home prices. Nothing short of robust demand and flat inventory will start to move home prices toward the higher prices of the past." Write to Justin T. Hilley. Follow him on Twitter @JustinHilley.