Oct. 15--Home sales in Santa Clara County jumped 17 percent in September over a year ago as home buyers locked in low mortgage rates and made an 11th-hour grab for a federal tax credit set to expire next month.

Meanwhile, median prices dipped about 2 percent month-to-month in September, a smaller drop than a month earlier, suggesting the market's decline could be nearing the bottom. Santa Clara County saw 1,307 sales last month, up from 1,116 in September 2008, according to MDA DataQuick of San Diego.

At the same time, the median price dropped 8 percent year-over-year, from $550,000 to $506,000. Yet the 2 percent drop from August's median price of $515,000 was less severe than the July-August drop of 5 percent.

One factor driving down the median price is that more and more homes being sold are at the lower end of the market.

With market indicators flip-flopping all over the map -- foreclosure activity remains high by historical standards, for instance, and nonowner-occupied buying is above average -- the erratic numbers are a sign of the times.

"It's a very unusual market out there, and it looks different depending on what angle you're looking at it from," said Los Gatos mortgage broker Narbik Karamian. "From my side, activity looks very strong, with lots of purchases taking place, partly because of the government's $8,000 tax credit that people are jumping on at the last minute. But then you look at the foreclosure numbers, and

they show the economy as weakening."

While Thursday's report actually showed a slight dip in foreclosures Bay Area-wide, DataQuick's Andrew LePage said foreclosures were up a bit in Santa Clara County, where they represented 27.2 percent of all houses and condos sold in September, up from August's figure of 26.4 percent. And that number remains historically high -- LePage said it was 3.9 percent in September 2007 and that it never reached double digits in the mid-1990s housing correction.

Karamian says foreclosures remain historically high not only because some owners can't modify their loans, but also because some have lost so much equity "they just want to let the house go."

So there could be more trouble on the horizon. LePage says "the big picture in most places is that prices are close to flat, but that could change if we get a new flood of foreclosures. Loan delinquencies are still growing, and there's a lot of distress out there. What's not clear is how many of these will end up as loan-modifications or short sales or something else.

"Whatever price stability you see now could turn out to be temporary," said LePage.