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In a market beset with foreclosures and plummeting sales following the mortgage meltdown in 2007, Michael Crews Development will give away a row home valued at $400,000 with the purchase of a $1.6 million luxury estate home in the upscale city of Escondido in northern San Diego County.

"We are targeting a niche market of investors who are interested in the opportunity to buy a new home for themselves and get a free rental property or second home for family members," developer Michael Crews said in a statement.

The developer claims the row homes are not shoddy townhouses that are being given away with luxury estate homes. The two-acre Royal View luxury homes with four bedrooms, four baths, up to six car garages, swimming pools would be paired with 2,000 square-foot upscale row houses.

"People don't expect to get what they are getting with the row-homes," said marketing director Dawn Berry. "These are well appointed luxury houses."

Originally the offer was to run for two weeks in May but the developers decided to extend it through June to give potential buyers more time to mull over it.

Since the first advertisement went up nearly two weeks ago, one man has made an offer to buy a Royal View estate home, but chose not to take the free row-home. The developers have a solution for that as well.

"If you don't know what to do with your free home, you could always give it away," Berry said.

That would be welcome help for many a young buyer struggling to get a loan amid tightening credit rules that require larger down payments and established credit histories.

Home sales in San Diego County were down 18 percent in April from a year-earlier, while the number of homes going into foreclosure rose 130 percent in the first quarter from a year earlier, according to DataQuick Information Systems.

(Writing by Syantani Chatterjee; Editing by Mary Milliken, Leslie Gevirtz)