Here's why they bowed their heads and poured on the thanks in California's San Francisco Bay Area this Thanksgiving.

Despite a recent poll that said one in four Californians have considered moving to a cheaper home -- in some cases out of state -- the Bay Area housing market has been gaining speed like a runaway Polar Express bound for the Land Of Believe.

Even as year-over-year home sales of all homes (new, resale, single-family detached and condos) fell in the job growth-stymied region that includes Silicon Valley, home prices rose from 14.5 percent to 27.5 percent in the same October-to-October period.

If the current market direction is any indicator, when the next economic boom hits the San Francisco Bay Area, believing in Santa Claus should be a cinch -- provided you are an owner or seller. Buyers will continue to hope there is a Kris Kringle.

A total of 11,180 new and resale houses and condos were sold in the nine-county region in October. That was down 7.4 percent from 12,075 in September, and down 4.7 percent from 11,728 for October last year, according to La Jolla, CA-based DataQuick Information Systems.

Look at prices, however, and it appears as if sales were booming. The median price paid for a Bay Area home was $524,000 in October, yet another record up 1.6 percent from $516,000 in September, and up 17.5 percent from $446,000 in October 2003.

"There are a lot of potential buyers out there and they're finding more homes for sale than was the case a half year ago. Mortgage interest rates have bottomed out and a lot of buyers want to get in before they go up any further," said Marshall Prentice, DataQuick president.

A closer look at activity in some of the counties in the nine-county region is even more astounding given the area's lackluster economy.

With sales increasing 12.5 percent, Solano County was one of only two counties that experienced a sales gain during the year-long period. It also had the largest price gain, 27.5 percent. Up in wine country's Napa County, the only other county with a home sales gain, the market enjoyed an 18.4 percent increase in sales and 20 percent price gain.

In San Francisco where sales dropped 16.6 percent -- the largest decline in the region -- prices rose at the same rate, 16.6 percent. In Santa Clara County, the region's most populous county, sales were off 9 percent, but prices rose 14.5 percent.

Along with low interest rates lasting longer than expected, home equity growth used by homeowners to move up, over and down, demand from immigrants, demand from out-of-staters; high-income positions in the existing job market and big corporations like Google.com, Ebay.com and others that are doing well, thank you, there apparently is sufficient demand to continue to ratchet up prices in one of the nation's most expensive housing markets.

Buyers continue to be able to afford the typical monthly mortgage payment of $2,315 -- up from $2,035 a year ago, DataQuick reported.

Also, bubble worries are few, foreclosure rates are low, down payment sizes are stable and there have been no significant shifts in market mix to reveal speculators are more active than normal. A slight increase in flipping rates earlier this year has subsided, DataQuick said.

Published: November 24, 2004

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.