San Diego County's sluggish housing market is churning out single-family home sales at a pace barely above the low point of the recessionary 1990s, according to an analysis of regional statistics.

At the height of the recent housing boom, about 4 percent of county homes were being sold every year. Today, a little more than half that are changing hands. And analysts say the market, when it comes to sales, is about to reach bottom in the current downturn.

Analysts also say inventories of unsold homes are higher than normal, a sign of market weakness, and they warn that up to four more years of flat or declining home values could be in store for San Diego County. For now, however, prices have cooled only slightly.

"It's not a full-on buyers' market because a lot of sellers are still holding onto their prices, or coming down only a little bit," said Dennis Smith, a real estate agent in Carlsbad.

After reaching a peak of $604,250 in 2005, the countywide median price declined 0.4 percent to $601,760 in 2006, the California Association of Realtors reports. The median price is the midpoint of the market, where half of homes sell for more and half for less.

In North County, the median was still holding strong at $635,000 in April, just 2.3 percent off the area's all-time high of $650,000 recorded in June 2006, according to the latest HomeDex report prepared by Robert Brown, chairman of the Department of Economics at Cal State San Marcos, for the North San Diego County Association of Realtors.

The recent developments are to be expected, as they reflect long-term trends, said Ed Leamer, director of the closely followed UCLA Anderson Forecast, which issues quarterly predictions about the state's economy.

Leamer said housing markets tend to go up and down, but cycles are different for price than for sales volume. Typically, sales fall first and fast following booms, while prices decline later and drift down slowly.

"The volume cycle has already made a major adjustment," he said. "We may not be on the bottom, but we aren't far off the bottom."

On the other hand, Leamer said, "The price decline is just starting. And we expect that to last for a considerable time."

'A buyers' market' -- sort of

San Diego County's market is also performing below average when measured by another yardstick -- but better than it was during the depth of the 1990s.

Leslie Appleton-Young, chief economist for the California Association of Realtors in Los Angeles, said over the long term California tends to have, on average, a seven-month supply of housing, meaning it takes seven months for all homes on the market at a given time to sell.

The supply is a key indicator of the market's strength or weakness. A larger-than-average supply tends to suggest a weak one in which prices are likely to decline.

In April, San Diego County's supply reached 10 months, Appleton-Young said.

That represents a dramatic increase from the record-low, one-month supply posted in March 2004, when homes were selling as fast as they were being listed, analysts say. But the April total is a sign of a healthier market than the one that weathered last decade's recession.

Appleton-Young said San Diego County's supply reached a record 23 months in February 1992.

Today's larger-than-average supply is giving buyers an advantage they didn't enjoy a few years ago, when sellers had the upper hand.

"It's definitely a buyers' market," Leamer said. "By that I mean, if sellers want to move their product they are going to have to do what the builders are doing, which is aggressively price and promote."

But buyers do not hold all the cards.

There aren't many bargains being offered in the resale single-family market, Leamer said.

"If you want a bargain, you have to buy a new home or one that has been foreclosed," he said.

Appleton-Young said buyers also have choices in more affordable inland markets, where overbuilding and foreclosures have softened prices. She said prices, for the most part, have not budged on the coast.

No 'cut-and-run mentality'

Economists and real estate agents say the reason there are few bargains -- and median prices are holding -- is because the economy remains strong, with near-record-low unemployment.

"You're not having that cut-and-run mentality like you had in the 1990s in L.A. County when so many people lost their jobs that they had to get out," Appleton-Young said.

During the 1990s, the end of the Cold War led to a significant scale-back of the military, and much of the impact was felt across Southern California. Several bases were closed and thousands of aerospace jobs axed, triggering a six-year-long recession worse than any other the region has had.

In response, home values in the Los Angeles area declined 27 percent, Leamer said.

From 1991 to 1996, the median price in San Diego County -- which was insulated from the base closures that hammered communities elsewhere -- fell 9 percent, according to the California Association of Realtors.

Appleton-Young said there is no question prices also are going to pull back from the "unrealistic appreciation in prices" that occurred during the boom of the 2000s.

But Leamer predicted a mild slide this time because of the relative health of the economy.

Carlton Lund, who has watched the ups and downs in his 25-year career as a real estate broker in North County, suggests the San Diego County market will see a price decline of 5 percent to 7 percent.

"We have a good job base in San Diego. And we also have good, affordable interest rates," Lund said, noting unemployment drove the last down cycle and high interest rates ignited one in the early 1980s.

A normal market it is not

However, Robert Campbell, an independent San Diego economist who publishes a newsletter advising people about when to invest in housing, said a strong economy and low interest rates can't eclipse the market's need to return to price levels that more closely reflect the region's income levels. Campbell said he believes the county is in store for a severe price decline, in the neighborhood of 35 percent.

"This boom took prices twice as high as normal cycles," he said. "People talk about high gas prices. But what is really stalling the economy and could actually bring the economy down is overpriced housing. Affordability, of course, hit the wall. The market is just exhausted."

Clearly, said Leamer, the boom market of the recent past was anything but normal.

"In a normal market, people buy homes as places to live," he said. "In abnormal times, people buy homes as investments."

Leamer said he also would not classify the current market as normal, as it is "correcting for the excesses of 2001 through 2006."

Economists and real estate analysts are in agreement that a correcting down cycle is under way. They disagree on how long it will last.

Lund, the broker, predicts 18 more months, while Appleton-Young's crystal ball says 18 to 24 months.

Leamer maintains the cycle will last three more years; Campbell suggests four.

Borrowing a baseball analogy, Campbell said, "We've got innings four through nine to go -- and that's assuming we don't have extra innings."

Contact staff writer Dave Downey at (760) 740-5442 or ddowney@nctimes.com.