In Orange County, recent trends of rising home prices and a recent chill in the economy has fanned the flames of fear of an overheated real estate market, with many real estate professionals and their clients on edge, with memories of the last housing collapse still fresh in their minds.

The dreaded word every real estate professional hates to hear – bubble – now is being tossed around.

For 62 straight months, Southern California home prices have gone in one direction. Up. This is fueling talk of a bubble in several markets in So Cal, including Orange County.

The median price for a home in Los Angeles County was $323,000  five years ago. The median price in Orange County in 2012 stood at $495,000, about $260,000 less than today’s prices in both counties.

In Orange County, there are two camps when discussing the current state of the housing market.

Jim Doti and the economists at Chapman University, told the Orange County Register he believes Orange County housing is in bubble territory, however, he sees no signs that it could burst any time soon.

Doti expressed concern that local housing prices are rising faster than the typical paycheck. Buyers in Orange County have to spend more than the national average on housing.  He fears the economic cooling will continue and could possibly morph into recessionary pressures as early as next year. He told the Register that the bubble exists and it will inevitably burst.

Mark Schniepp from the California Forecast, told the OC Register that he sees no bubble. Yet.

Schniepp said the overall health of the economy currently justifies the rise in home prices. He is confident that supply constraints will help balance the market.

Suburban neighborhood in Orange County California

The analysts do agree that there is a lack of supply. With inventory tight, the few homes that do make it on the market are selling quickly. As a result of this trend. Chapman has predicted a 6.4 percent jump in Orange County home selling prices in 2017.

When considering current trends, it is important to note that during the last bubble period, Southern California home prices increased year over year for 126 consecutive months, or 10½ years – twice as long as the current streak in home price gains.

Moreover, many analysts say home prices really aren’t rising that rapidly.

Currently, price increases have averaged about 6.3 percent in Southern California over the last 12 months. The low is 5.4 percent in Orange County to a high of 7.9 percent in San Bernardino County.

According to Christopher Thornberg, a founding partner of Beacon Economics and former UCLA economics professor, the increases are only slightly greater than the rate of inflation.

Moreover, Pat Veling, president of Brea-based Real Data Strategies, said that the actual rate of inflation probably is in the 4 percent to 5 percent range.

With GDP growing at 2.5 percent and mortgage interest rates below 4.5 percent, home prices in Orange County and Southern California have the potential to increase by 6 percent a year over the next five to six years, according to Thornberg.

This wouldn’t necessarily be unhealthy.

“Given the supply shortage and the strength of the California economy, (that’s) perfectly reasonable,” Thornberg said. He added: “Reasonable here means it’s not a bubble and they won’t collapse.”