To Silicon Valley home sellers, it's beginning to feel a lot like Christmas, but buyers are feeling as put upon as Bob Cratchit as conditions ripen for the Ghost of Christmas Past to reappear.

An unseasonable home price boost pushed home prices to yet another record high in November. The high prices come with a depleted inventory that is fostering a sense of urgency and frustration among home buyers. And real estate agents are uncertain why the market has taken an unexpected turn.

One thing is ominously certain, prices plummeted not long after three previous Novembers with similar market conditions.

It's not surprising buyers are anxious.

Closed sales on single-family detached homes generated a record median price of $649,000 in November, up $13,000 from October's median of $636,000 and $90,000 from a year ago, according to Richard Calhoun's Bay Area Real Estate Market Newsletter.

Closed sales on condos and townhomes yielded a stretch for the half million dollar mark, as prices hit $425,000 in November, $25,000 more than in October and $68,000 more than a year ago, reported Calhoun, the broker owner of San Jose, CA-based Creekside Realty, who crunches statistics from the area's multiple listing service, RE InfoLink.

The one-month, 6.25 percent increase in condo prices is greater than many markets throughout the nation experience in 12 months.

The Silicon Valley housing market's off-season typically -- but obviously not always -- begins after school starts. By the holiday season, buyers and sellers are on a sugar plum high of shopping, decorating and celebrating until after the New Year. During the off-period, sales typically slow and prices take a breather.

Three times in recent record-keeping history -- 1988, 1999 and 2000 -- November unexpectedly yielded the year's price peak only to be followed by a market of declining prices. The declines began right away in 1999 and 2000, but in 1988 the fall was delayed for about six months, said Calhoun.

Time will tell what follows Silicon Valley's November 2004 market.

"I don't know what makes this year so different," said Janet Houde, an independent real estate broker in San Jose, CA and president of the Santa Clara County Association of Realtors.

"Homes on the market for no more than six days and priced around $550,000, below the median, and you go to tour them and there are 40 or 50 business cards on the counter. That's telling you what's going on," she said.

The November inventory of 2,257 homes and condos for sale is down from the 2,999 homes available a month earlier and nearly 1,500 homes off November 2003's inventory of 3,708. That's certainly a factor fostering higher prices.

And while sales were up to 1,811 from November 2003's 1,609 sales, they dropped from 1,947 in October this year. With the seasonal decreases in sales, home prices typically play along and remain flat or rise at a slower rate.

"I don't understand it either. I think it is a combination of factors. People are concerned that housing prices are continuing to rise and they are wanting to get in ASAP. Rates are still historically low. So, they are putting Christmas on the back burner. They won't have any money for Christmas anyway," said Mike Donohoe, broker/owner of Silver Creek Financial in San Jose.

Donohoe said each buyer has a different story about why they are buying now, but there is one common thread.

"Urgency. They want to get it done," said Donohoe, a past president of the association.

The urgency is just about county wide as only two select, but distinct areas reported pricing drops in November -- the more rural South County area of Gilroy, Morgan Hill and San Martin and the city of Santa Clara, a college town that also forms one side of the so-called "Golden Triangle" where many of Silicon Valley's high-tech companies once thrived.

Calhoun says that following the November peak-price comes a just as unexpected sudden drop off in sales since the beginning of December.

"The market has slowed down by 20 percent based on a historic look at five weeks worth of data (at this time of year). Sales slow down at this time of year, that's normal, but it's slowing down much more rapidly than normal and there's no explanation for that. Projected over the five week period, sales are down 50 percent from normal," Calhoun said.

He said the always-volatile market is currently tougher to call than usual.

"Is this just temporary or is it going to continue? That's the million-dollar question. With just two weeks (of December data) there's not enough traction to know if it's permanent or a fluke," he said.

Calhoun and other agents say buyers who've carefully preplanned on buying a home now -- based on sound personal evaluations of their housing needs rather than market conditions -- should not be dissuaded by limited inventories and stiff competition.

Better days are ahead.

"Inventory choice is not wonderful, but I wouldn't panic. After the first of the year, there will be more inventory coming on the market," said Houde.

Published: December 15, 2004

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.