Orange County Ranks No. 2
On Most Expensive List

A sprawling suburban region stretching along 42 miles of Pacific Ocean coastline between Los Angeles and San Diego, Orange County has become the country's second most-expensive housing market after San Francisco, thanks to the area's Southern California cachet and booming economy. The region's third-quarter median home price rose 10% from the year-earlier period to $710,700, more than three times the national median of $215,900, and just below the San Francisco level of $726,900, according to the National Association of Realtors.

This four-bedroom, two-and-a-half-bath home in Irvine, Calif. recently sold for $740,000.

Despite its steep prices, the housing market in Orange County is still going strong by most measures -- at least for now. The number of new and existing single-family homes sold in Orange County jumped 14% in the third quarter from the year-earlier period, according to the Southern California Multiple Listing Service. Meanwhile, homes in Orange County sold at a faster pace in September than they did a year earlier even as it took longer to sell homes statewide in September compared with a year earlier, according to the California Association of Realtors.

But there may some clouds on the market's horizon. While appreciatian and sales levels are expected to slow next year statewide, higher-priced regions like Orange County may see a steeper drop in activity, said Robert Kleinhenz, deputy chief economist at the California Association of Realtors. "Affordability issues are going to restrain sales," he said.

Sources: National Association of Realtors, California Association of Realtors and Southern California Multiple Listing Service

Coming up tomorrow, a look at the commercial real-estate market in Orange County.

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