It’s the first time in 10 years that the Orange County median did not post a gain from the year before.

If Orange County real estate market were a state, its name would be Kansas: Flat as a pancake, with no end in sight.

For the first time in a decade, the median price of an Orange County home failed to post a gain from the year before, falling to $600,000 in January, market tracker DataQuick Information Systems reported Wednesday.

That’s the first time since November 1996 – or the first time in 122 months – that the median price did not increase from the prior year.

It also was the sixth month-to-month price drop since the median hit a record high of $642,500 in June, and was the lowest median in a year. The median price is the midpoint of all sales, with half the homes selling for more and half selling for less.

Experts differed about whether the market has hit bottom, but no one expects significant price drops.

“I think this year, month-to-month, we’re going to be bumping along in percentage changes,” said Walter Hahn, a consultant and real estate economist in Irvine. “Some months it’s going to be slightly negative, some months it’s going to be slightly positive. But I don’t see any big decrease.”

Meanwhile, sales also continued to lag, with just 2,400 homes trading hands last month. That’s the lowest number of sales number since January 1996. Since 1988, Orange County averaged 2,737 home sales in January.

Hahn predicted prices and sales will start edging up by the end of 2007. Jobs remain plentiful, the population still is growing and speculators, who had been forced to dump properties at a loss, have been “pretty much wrung out of the market,” he said.

Indeed, prices may already be in negative territory since DataQuick’s figures don’t reflect the concessions – such as kitchen upgrades or free closing costs – homebuilders are offering new home buyers in lieu of cutting their recorded prices.

Home sales were down across Southern California in January, and prices continued to be below year-ago prices in San Diego real estate and Ventura ca real estate. Orange County appears to be on the verge of a negative annual price change, with no appreciation for the first time in a decade.

The source: Real Estate Blog