Southern California's once-booming commercial real estate market, which dramatically altered the region's office skylines in the 1980s, is in the early stages of a bust that may last two years or more, property experts believe.

While not as severe as in other regions of the country, the downturn nonetheless could further depress the Southern California economy when it is already reeling from thousands of aerospace industry layoffs.

"We're in the throes of a real estate recession . . . and a national recession would only make that worse," said Andrew S. Kane, a real estate specialist in the Los Angeles office of the Arthur Andersen & Co. accounting firm.

While the office market is slumping in Orange and San Diego counties, it appears to be particularly bad in downtown Los Angeles, which faces the prospect of massive overbuilding. With some buildings in major financial difficulties, there is further trouble ahead for banks, savings and loans and other lenders that already have experienced large losses on building loans gone sour.

Older office buildings in downtown Los Angeles have vacancy rates as high as 80%, and some new buildings are not faring much better. In some markets, office rents have been falling for some time, a trend that is expected to continue as more office buildings open.

Fueled by easy credit from U.S. lenders and heavy foreign investment from nations such as Japan, Southern California went through an unprecedented office building boom in the mid- to late 1980s that gave dramatic new skylines to Long Beach, Westwood and Costa Mesa as well as the downtowns of Los Angeles and San Diego.

Though Japanese investment has tailed off and construction loans are no longer easy to obtain in Southern California, the region remains in the final stages of a building frenzy that is adding millions of square feet of unneeded office space. (A typical middle-class home has 1,000 to 2,000 square feet of space.)

The breakneck pace of office construction is not expected to last much beyond next year. Foreign investors no longer see greater Los Angeles as a superior investment opportunity, and banks, under pressure from regulators because of huge problems facing the savings and loan industry, have scaled back real estate lending.

"There's no doubt that lots of deals are falling through now because the financing is not coming together," said David A. Eisner, a real estate specialist for Price Waterhouse.