This seaside town, whose beaches once lured vacationers from nearby Los Angeles and beyond, is now the anchor of a vast development with a waiting list of 28,000 potential home buyers.

New residents are the lucky ones whose names were drawn in lotteries held by the developer, a system initiated last year when the demand for Orange County housing far exceeded the supply.

Local and state regulations have since been passed in an attempt to limit such growth. But demand, speculation in housing and a 1,797-unit ceiling on new construction this year have combined to jack the average new house price in Irvine Co. developments here up from last year's $85,000 to $110,000.

You'd think those prices would turn off buyers, nearly two-thirds of whom are not even buying detached houses. But high prices here, long waits and small lots do not seem to discourage people in this volatile housing market.

One buyer, Heston Driskell, who is 30 and about to be married, won the 21st chance in the latest lottery to buy an $87,000 condominium town house near a small lake in the Woodbridge development here. It is one of the villages being developed by the Irvine Co. on 87,000 acres stretching from the Pacific shoreline. A Place in the Sun to mountain foothills. The Irvine development is a remnant of the huge agrarian estate that was sold recently for $337.4 million to a 10-person consortium including Irvine heiress Joan Irvine Smith and auto baron Henry Ford II.

Driskill, a laboratory firm employee, said he made a "nice profit" on the Irvine house he sold to move to his new, three-bedroom town house. His is one of 17 units built on a single acre.

Nobody really knows how much of the inflated housing costs in the new and resale housing markets are due to speculation in Southern California. Not even realtors who have survived California's ups and downs over the years remember a period when houses appreciated more than 2 per cent a month.

"I've never seen anything like the appreciation we're seeing now," said realtor Donald E. Olson, who heads a state-wide firm.

California Real Estate Commissioner David Fox said housing speculation is centered mostly in Orange County and the San Francisco Bay area. Citing a housing scarcity resulting from inflated costs of land, labor and materials, he said most investors in single-family houses are just doing what apartment building owners do.

But some of the breed of home buyer never even take possession. They know they can resell a contract at a profit before or just after settlement and can make a profit of $5,000 to $10,000, a gain that could be upped considerably if the houses were retained for year and then resold.

But Kenneth Agid, a former military officer who heads sales and marketing for the housing division of the Irvine Co., recognizes the perils of an explosively high market. This condition has been somewhat abetted by the lotteries, he said.

Agid said that 90 per cent of the names on lottery lists are "dead" by the time the numbers are picked. "They've either been priced out of the escalating market or have found something else," he said. "Not everyone can wait. It doesn't cost anything to have your name in the lottery and it's only $100 down until you go to escrow (settlement)."

Agid, who had to struggle to buy his first $29,000 house seven years ago, has moved three times in the interim. He now lives in an Irvine, Calif., house that could bring an estimated $265,000.

"I did it by taking advantage of the appreciation and getting a bigger mortgage every time. Many other people have dome well too," he said.

Irvine, which has 18,000 homes, is not all residential villages, open hills and golf courses. It also has a downtown area with a dozen office buildings, hotels, one of the nation's busiest small airports, and a 9,000-student branch of the University of California. It also has good roads, a restaurant and realty row in attractive new buildings, high-rent Spanish-styled rental apartments overlooking the ocean and expensive single or attached houses on small, walled lots.

Irvine's undeveloped northern area is still slightly agrarian, with orange trees and infinite rows of staked tomato plants, bush beans and asparagus.

A visitor from the East gets the impression that the affordable house is vanishing from South California's hot new markets and discouraging prospective buyers from looking. This boom-prone area may have to pay the price of speculation and over appreciation one day. That could happen if people are discouraged from moving to the coastal area.

Jeanne Keevil, editor of Irvine's community newspaper, bought a four-bedroom rambler 10 years ago for less than $22,000. Divorced, she raises her daughters in nearby Mission Viejo, another good-sized, generally attractive community. She estimates that the house would bring $80,000 today.

But she's staying put. "I'm financially conservative and frugal because I have to be and real estate is not my game. Besides, I like my house and small lot. My roots are there," she said.

Maybe there should be more Keevils and fewer Kenneth Agids, if the Southern California market is to stablize.

Stanford R.Goodkin, a respected market research analyst and author of a new book, Winning at Real Estate, warns that a black market in reasonably priced homes and apartments could start in California and spread to other hot markets of the U.S. The Del Mar, Calif-based analyst predicts that "house rationing" might result from controls on development, along with the use of energy, water and other resources.

As Goodkin sees it, there's a "visit, retire and/or move to California boom" that was heightened by the frigid 1976-77 winiter that hit northern parts of the nation. Winiter' fallout has been felt in California and Florida but may be even more evident in Phoenix and other resort-retirement areas of Arizona.

Democratic Rep. Jerry Patterson, who represents the Santa Ana area of bustling Orange County, has introduced a bill in Congress to bar housing speculators from obtaining mortgages from government-regulated lending institutions. Called the Housing Piracy Prevention Act, it is aimed at the buyers Patterson contends were largely responsible for driving up the average price of a new home in Orange County to $107,000.

Patterson estimates that speculators make up one third of the Orange County housing market and are marking the housing shortage more acute.

Already some California savings and loan associations are requiring borrowers to sign statements if intent to live in houses being financed. Some S&L are quoting higher interest rates on loans and down payment requirements to cool off suspected speculators. And the William Lyon Co., a real estate brokenage firm in Newport Beach, Calif., requires buyers to sign statements saying they will live in a new houses for at least nine months after purchase - the job transfers or hardship cases being exceptions to the right-to-buy-back aggreement.

Sunday in the Business and Financial new section: The San Diego Boom .