The recent slowdown in home sales and home-price appreciation across the Coachella Valley and California should plateau over the next year, buoyed by a moderately growing economy, a leading state economist predicts. Leslie Appleton-Young, chief economist for the California Association of Realtors, told more than 500 real estate agents, mortgage brokers and other business people at a real estate forecast symposium Thursday in Palm Desert that home sales and median prices statewide are likely to decline slightly from the once "red-hot market," then level off over the next 18 months.

"The housing market is going through an adjustment after a four-year boom that was not sustainable, but the (economic) fundamentals are still very positive for this region," Appleton-Young said. "We are still seeing a moderately growing economy. We've got job growth, income growth, we have a great mortgage-rate environment. Anyone who is looking at buying and being in their home for awhile - say four or five years - is going to be just fine. A house is not a day-traded asset."

Across California, Appleton-Young said:

447,500 homes are projected to sell in 2007, a 7 percent drop, compared to 481,200 homes estimated to sell in 2006.

The median home price is projected to decline 2 percent to $550,000 next year, compared with a median price of $561,000 estimated for this year.

In Riverside County, home sales this year dropped nearly 18 percent through August, compared to a year ago, she said. The $416,000 median price was up about 3.2 percent from a year ago.

She also predicts mortgage rates could be slightly lower next year if the Federal Reserve looks to spark the housing market.

Her forecast that the drop in home sales and home-price appreciation should level off left attendee Robert Dennis, a real estate broker with Windermere Real Estate Coachella Valley based in La Quinta, "feeling a lot more upbeat" than in recent months.

"I think it shows we're turning the corner and making it back to more of an even plateau rather than dipping further," Dennis said. Like many real estate agents across the valley, Dennis is working with sellers to adjust their expectations after several years of double-digit home-price appreciation.

Now, with more than 8,300 homes listed across the valley this week, competition has heated up and many sellers have begun ratcheting down asking prices. One seller of a four-bedroom, three-bath home at 13 Vista Loma Drive in Rancho Mirage slashed the asking price by $125,000 to $770,000, for instance, said Tom Steffen, sales associate with Coldwell Banker Residential Brokerage in Palm Desert. Homebuilders in the valley are likely to get even more aggressive with incentives as their inventories climb, Appleton-Young said.

But several factors bode well for the Coachella Valley's real estate market in the months ahead, she said. It's a "destination" market, drawing some of the 78 million baby boomer retirees looking for a change in lifestyle, as well as second-home buyers and young families from other more expensive areas of California and throughout the United States.

"But there's no area of California that is immune to the adjustments," she said.