The simultaneous growth of infrastructure facilities, to cope up with the increase in population – presently recording 845,000 in San Francisco city alone within an extent of 46.7 miles area – and a floating population of 1.2 million on any given day made it an outstanding location for home hunters. No wonder there was a time for anybody having a piece of equity in this lucrative city, to just give an advert in the news papers “home for sale” and sit tight to see a flood of quotes from prospective buyers.

But this old glory has gone, once the foreclosure fiasco and mortgage crisis engulfed the country few years back. As elsewhere in the country, the number of underwater home owners has increased manifold and market values of homes – hovering around $675,000 for an average single-family home downtown – have plummeted near bottom.

Equally the strategies adopted by home sellers have undergone dramatic changes, which only a seasoned Realtor can deal with. Foreclosure laws of the state; information on market trends; inventory of homes for sale; comparable values of homes sold in the neighborhood; short sale procedures and negotiation techniques etc. – all these have a bearing in the real estate activities of buying and selling in the present day market.

You can very well understand why you need the help of an experienced realtor, by the piece of statistics disclosed for SF Bay Area in the month of July 2010. As against 1,070 San Francisco homes ready for sale – through multiple listings including re-sale, distress sale and short sale properties, only 6 of them were advertised by their owners directly in the market. Out of the above, only 230 homes were sold and the balance is still lying unsold.

There were only 112 registered sales in July, down from 160 recorded in June.

Most of the transactions were recorded in Grass Valley, a total of 43, the median in the country’s economic hub was $265,000, down with 4% from last year’s median of $276,000, DataQuick reports.

The phenomenon find the explanation in short sales or sales of bank-owned properties real estate experts say. These properties are sold for less than the value of the loan and they have been dragging the prices down.

July brought only 33 sales transaction in Truckee, the median rose to $425,000 which means an 8% increase from the median of $392,000 in July 2009. Western county Realtor note Truckee prices skew the overall county median.

If we look at the numbers revealed, we’ll see the 20% decline of the sales across the state from June and 22% from July 2009.

In the San Francisco bay area the median price for July was $402,000, up 2% from 2009. Southern California had the $295,000 median price, up 10% from July last year, but down nearly 2% from June.

"Indicators of market distress continue to move in different directions. Foreclosure activity is off peak levels but remains high by historical standards," DataQuick said.

With the announcement of tax-break incentives for home buyers – $8,000 for first time home buyers; and $6,500 for repeat buyers, there was visible spurt in home sales till 30^thApril, the closing date of contracts between the seller and buyer.

Across the country, all housing markets somewhat reflected a similar pattern in reporting increased home sales figures for April, including the 9 county SF Bay Area. Now that push up has ended, the home sales declined on the expected lines. The latest market reports from four of the major counties of the SF Bay Area for July are as follows:

Alameda County: Volume of home sales decline 18.8 percent, compared to June; declined by 21.1 percent compared to July 2009. Median home prices dropped just 1 percent compared to June and increased 20 percent compared to July 2009. Unsold homes inventory added up by 4.1 percent compared to June and 19.8 percent compared to July 2009.

Contra Costa County: Number of homes sold declined 13.2 percent compared to June and 19.3 percent compared to July 2009. Median home prices showed no change from June and increased 13.4 percent from July 2009. Inventory showed no change from June and 7.8 percent from July 2009.

San Francisco County: Home sales dropped by 15.8 percent from June and 20.3 percent from July 2009. Median price of homes fell by 8.00 percent compared to June and dropped by 20.3 percent compared to July 2009. Homes for sale inventory decreased by 2.6 percent from June 2010 figures, and showed negligible decrease by 0.4 percent against July 2009 figures.

San Mateo County: Home sales dropped by 21 percent compared to June and 15.4 percent compared to July 2009. Home median prices increased by 5.8 percent from June and 14.2 percent from July 2009. Inventory of unsold homes dropped by 1.4 percent compared to June and increased by 16.8 percent from July 2009.

The discussion on the subject arises based on a report in Smart Money.com, an analysis expert in finance and real estate matters. It goes to show that due to the recession, the construction activity in the country is seriously affected –  very true.

According to economic research analysts – when the housing bubble started and reached its peak in 2005, about 2.1 million properties in the residential sector were built. In 2006 it came down to 1.81 million homes; in the year 2007 it still dropped to 1.34 million and by the end of 2009 reports say there were only 550,000 new housing units built. We all know why.

On the other hand, the National Association of Realtors reports, as at the close of May there were 4 million homes for sale and the inventory of unsold homes jumped by 2.5 percent to last for 8.9 months to get cleared, and according to latest figures, home sales in June declined by 5.1 percent overall in the country.

On the foreclosure front, which has been supplying a flood of properties into the market continuously for the last few years, there is a temporary lull of course, for the reason of underplaying by mortgage lenders mainly. Instead of rushing to foreclosures, they are giving some long rope to delinquent borrowers, to get back cash instead of buildings – by loan modifications; extending time of maturity of mortgage; adjustment on interest rates; accepting short sales and similar other gimmicks.

However, they are only delaying the inevitable, since foreclosure tracking sites like Realtytrac. put the estimated inflow of foreclosure properties – some 3 million of them before this year end by reset ARMs.

Coming to SF Bay Area it is predicted that there will be shortage of homes since – new construction has been stopped; no space availability for new construction inside San Francisco; population growth will be tremendous; and so by 2012 onwards people will feel the pinch of shortage of homes.

All these apprehensions are pooh-poohed by public comments that this is only a false scare created by vested interests.

Absentee-buyers, meaning those making real estate investment for flipping to profit or deriving rental income have increased, which means regained confidence in SF Bay Area housing market after the bubble. High-end property sale is not up to the mark, possibly because of borrowers experiencing difficulty in getting jumbo loans.

Now for the actual statistics: Total homes finalized sales deal in SF Bay Area was recorded as 8,373 properties in June. In comparison, during May it was 8,264 and the increase works out to 1.3%. But it did not reach the figure of June 2009 namely 8,644 and therefore down by 3.1%.

Interestingly, the home sales figures have shown a continuous trend upwards during May and June every year since 1988, on an average of 3.9 percent, but this June has not fallen in line with it. The monthly home sales figure also shows a drop by 17.9 % for a June record of 10,198 homes ever since 1988.

On the price front also there was no significant rise shown from May and the median remained at $410,000 in respect of all sales including condos, resale houses and new ones. But if you compare this with the home median price prevailing in June 2009, it is an upward trend by 16.5% from $352,000. However all these figures cannot compete with the peak price of housing properties in SF Bay Area, prevailing at $665,000 during the years 2007 and 2008.

Last month, home buyers and investors were not that keen in buying properties from foreclosures it seems. The share of foreclosure re-sale homes in the month of June fell to 26.7%, whereas it was 26.8% in May 2010 and 36.7% in June 2009.

Because all these statistics point towards different directions the market is heading, we can’t be sure as of now and study the market reports for another 3 or 4 months to get confirmed.

This new phenomenon is far more radical than the previous housing crashes, when the lenders moved very quickly. They could make the move in speed, since there were much fewer troubled loans; nowadays there are so many people with financial troubles that banks and lenders simply can’t keep up. This situation adds up to a continuous instability of the Bay Area housing market, because lenders move slowly and the homeowners endure uncertainty that could last for months.

"It’s bad all the way around, for the neighbor, the community, the city, state, nation. It’s continued indication that there are a lot of people in trouble particularly with their job situations" said Chris George, founder and CEO of San Ramon-based CMG Mortgage.

On the other hand, homeowner don’t have a much of a choice, they must ignore their mortgage. Jeff Dunking, a Bay Area homeowner has been employed only sporadically since past year, and the unemployment checks he’s collected just aren’t enough for covering the mortgage. "I stopped paying payments about 12 months ago" said the homeowner, who was rejected twice for loan modification on his condo. He is aware that many people think living mortgage-free sounds like a great deal, but this isn’t how he feels "It’s a lot of anxiety, a lot of stress," said Jeff Dunkin.

S&P/Case-Shiller home price index is an authentic source, as regards housing price statistics are concerned.  Their latest report says San Francisco, posted an increase of 18.3 percent on a year-over-year analysis – from May 2009 to May 2010 – and leads on the top of 20 metropolitan regions taken for review, in respect of home prices.

San Diego, another popular metropolitan from the same California State, holds the second position in this regard, where an increase of 12.4 percent on the home prices is reported, for the same period as above.

How far this can help studying the trend of market conditions and direction it is heading is a moot point, since the increase in home prices is not consistent. For example, the increase in home price levels was 1.7 percent from April to May, whereas it was 2.2 percent from March to April in San Francisco.

Unquestionably, during the above period there was a spectacular boost in home sales, all over the country, owing to the tax-credit incentives available for home buyers – both first-time buyers and repeat buyers. Yet on studying the increased inventory levels of 27 metropolitan cities, which includes SF Bay Area, for the month of June, experts in the industry expressed surprise over such a phenomenon of more homes being listed for sale in May and June, unheard of during the last 27 years.

Also according to the Index report, out of the 20 cities taken for analysis, only 12 of them showed an increase in home prices on a month-over-month basis from April to May. Overall, the price increase for all these 20 metropolitan cities works out to 4.6 percent year-over-year – from May 2009 to 2010.

Let’s hope the picture will be clearer in the coming months.

There are instances of profitable home sales, purchased through foreclosure properties and short sale, projected by Wall Street Journal, quoting the real estate website Zillow.com, to show how the home prices compare with the peak period of Bay Area real estate markets from 2005 to 2007.

It is reported that the differences in home prices are visible in San Francisco, San Jose and Berkeley cities, compared to the peak quarter of 2006, during the latest quarter ended May 2010. Overall in the SF Bay Area, excepting Napa and Solano counties, the market-rebound can be observed.

Compared to the peak in home prices during the year 2006, there was a fall in prices overall, on an average to $493,625 during May this year. However, it is said that the prices are picking up from the 28 percent fall noted between the two periods.

In a typical home purchase reported from San Jose housing market – a house of four bedrooms; with a swimming pool and two-car garage  – was purchased in April this year, in the middle of a sliding down home prices observed in San Jose home market by 26 percent. The buyer bought the property through short sale, paying $375,000 – a 44% down price when compared to the 2007 peak price of $675,000 for such a property.

The owner is content that he made a worthwhile investment while commenting upon his purchase.

The change in price trend is not even – while it shows huge differences between the peak period and now – as per the above instance, the prices are holding up firm with not much of difference in high-end markets.

To prove this point, another short sale example is quoted from Berkeley Hills Tilden Regional Park area. A two-bedroom house was purchased in March at $650,000 – less by just 13% from the July 2005 peak period price of $750,000, in 5 years.

But the point proved beyond doubt is a short sale can offer you attractive discounts in home buying.

By taking the year-over-year sales figure, one can assume that the end of the tax-break incentive program on 30^th April (only extended for closing till 30^th September) has its impact in dousing up the spirit of home buyers and investors. But this presumption is belied, by the fact home shoppers are active in their hunt and thus there is a rise in home sales compared to May.

Inventory of homes available for sale rose during the month of June in the SF Bay Area unusually, since the month of June every year will see fewer listings of homes for sale. Figuratively there are 22,403 residential properties waiting for buyers at the end of June, an increase of 8.7% from that of May.

Market watchers are of the view that there will be higher influx of homes into the market by the end of 2010. The reason being – Bank repo properties are steadily on the increase month after month of late and more ARM mortgages resetting will increase the delinquency rates nationally, as well as in Bay Area. It is reported that more than 7 million home owners are behind their mortgages, and will fall into the foreclosure trap during the second half of 2010.

However there is encouraging news though for home sellers. The median price of a Bay Area home, recorded in June at $410,000 is up by 16.5 percent – than what it was in June 2009.

Other statistics worth noting are – Jumbo loans – that is amount of loan over $417, 00 involved in home sales for June is 33 percent; adjustable rate mortgages accounted for 11.9 percent of total home sales in June, where 16 percent of buyers are supposed to be investors, buying properties for business purposes and not for their own living, in SF Bay Area.

News reports appearing in San Francisco Chronicle, about Contra Costa County are somewhat encouraging in that although the property values in cities of this county still facing south (dropping down) they are not dramatic, as they were in 2009. Across the Contra Costa County, on an average, the assessed property values decreased by only 3.4 percent, but the decline in tax revenue because of reduced property tax collection continues.

Here is the list of cities and the percentage decrease as reported:

Richmond    12.82%

San Pablo       5.90%

Hercules       5.28%

Antioch       4.88%

Brentwood        4.10%

Oakley        2.83%

Danville        2.10%

Rest of the cities of Concord; Moraga; Pinole; Pleasant Hill; Pittsburg; Martinez; San Ramon – in that order have dropped assessed values of properties in percentage ranging from 1.91 to 1.45 respectively. In the case of cities like Clayton; Walnut Creek and Orinda – the drop in value of properties is going down from 0.96 to 0.35 percent.

Contra Costa County consists an array of cities ranging in their economy – from somewhat Industrial city of Richmond to affluent Danville. It is pointed out that the largest drops in values have taken place in cities of working class communities, where already the home values lingered in the lower end.

Another point of interest is the two cities – El Cerrito and Lafayette – have shed assessed value of properties by 1.09 percent and 0.97 percent only. The County officials were a relieved lot, as they expected the property value drops should be higher, as experienced during the last two years, when more than 10 percent decrease was recorded.

The County has been experiencing budget cuts arising out of lesser revenue collection through property tax levies.  Overall the sad-state-of-affairs are not over yet and they can smile if only the market values are going up.