Mr Trick
Scooby
Indeed it was a joke, but Xander only jokes to relieve tension in a situation, whether it's fear/horror, social awkwardness/embarrasment or (as in this case) attraction. Humour is often used to illustrate actual characteisation on the show.
Also, if you watch the scene Xander's certainly getting very 'dreamy-eyed' looking at Faith, until Cordelia tells him to 'find a new theme'.
I see real attraction on his part (not so much with Oz) and genuine interest. That's the appeal of Faith in this episode:
Later on, when he and Willow have given Faith the tour:
XANDER: She's got something, doesn't she?
Also there's the fact that they don't spend that much time together after this episode until 'The Zeppo', and then suddenly Xander is 'very up' for whatever Faith wants. 😀
Where does that attraction come from if not from their initial encounter?
Disagree. At most Xander notices that Faith is attractive and is responding to something rauchy she said with a crude joke. Its not the same thing as being obsessed or fanicing someone.