The San Francisco region is located inside the most popular state of California, attracting the attention of world commercial markets, ever since the period of Gold Rush and for this reason attained the nickname of Golden State. San Francisco city along with the 9-county Bay Area grew faster than other parts of the country, with rapid strides.

The influx of population –  both from within and outside the U.S. country – to concentrate their efforts and endeavors in search of Gold in the earlier period, and for money in technology fields later on, necessitated world-standard infrastructure facilities. Within a short time compared to others, SF Bay Area shot into fame as a wealthy environ in the world-arena. It followed as a matter of consequence that luxurious homes became part and parcel of the San Francisco city and its neighboring counties.

What is a luxurious home? Compared to an average American single-family home of 1,700 square feet, and ordinarily two bedrooms and baths, a luxury home featured with 3,000 to 6,000 square feet; three to six bedrooms and similar number of bathrooms. In the common real estate parlance, these homes are known as high-end properties – used to denote those homes valued more than $1 million.

Prior to the real estate boom, the prices of these luxury homes were hovering slightly higher than the average homes. But the boom years from 2002 to 2005 escalated prices of all homes in SF Bay Area, not to speak of luxurious homes. Statistics go to show that the increase in prices from December 2002 started upwards from $651,000 and by 2006 reached the peak of $2.9 million.

From then on, due to the overall foreclosure crisis hitting the country, prices of these luxurious homes plummeted along with others in the area, to reach the near-bottom in the last quarter of 2009. Now according to latest reports, luxury home values have gone further down by 1.3 percent in the second quarter, compared to last year in SF Bay Area.

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.

Here you will find a buyer’s market, though every market depends on the city and community. Places like Belvedere, one of the priciest places in Bay Area, is now having tough times in getting sales transactions, where only 4% of the 48 houses that are listed are in contract. These luxury estates are sitting longer, waiting for the perfect buyer, to put down the cash.

"As a general rule, the more expensive the house the more likely is to sit on the market… The numbers of qualified buyers in every price range except for the very low end has diminished dramatically," said Tracy McLaughlin, co-owner of Pacific Union and a specialist in high-end homes.

Marin is the place where the prices are acceptable. There are not quite the lower end, but a fair price, you’d say.

"In Kentfield, for examples where the median home sold for $1.9 million in the first seven months of the year 18% of homes on the market were under purchase contract last week. A little over two miles away in Greebrae, the figure is 37%, more than double the absorption rate… Greenbrae homes cost half as much with a median price of about $1 million," said Ron Park, a broker with McGuire Real Estate.

There are lots of opportunities, in the area such as Novato, the most northern city in Marin, where there is an ample inventory of properties for sales and the median price in the first 7 months of 2010 was $495,00. 34% of the available homes for sale in Novato were in contract last week.

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.

As many as 325,229 U.S. homes were reeling under foreclosure process in various stages – received default notices; scheduled for foreclosure sale public auction; and repossessed by banks after public auction. This works out to one in every 397 housing units in the country, suffering the bitterness of foreclosure episode. The figure of July is an increase by 4 percent compared to June; but a decrease of 10 percent against July 2009.

The strikingly bad news is the decrease of foreclosure activity is wiped out by the record level of properties gone under the repossession of lenders, which are eventually marked to hit the housing markets sooner or later. The banks cannot keep these premises for long and they are to be converted into hard cash, selling them to buyers.

As against this grim situation nationally, there is a decline in Contra Costa County and Alameda County of SF Bay Area in the number of foreclosure filings in July. The number of default notices sent to distressed home owners, as the first step of foreclosure process was recorded as 896 in July; and the number of delinquent properties repossessed through foreclosure sale public auction were 636 in Contra Costa County.

In Alameda County – there is more distress – 1,790 home owners received default notices and 616 properties were repossessed in July. It goes without saying that the total number of repossessed properties in both the counties – numbering 1,252 properties – have to arrive at the respective housing markets, with great discounts because of the selling pressure.

What is most interesting is – these repossessions are fewer than the previous months. Thinking of it, the banks are adopting a new strategy of giving more time for the borrowers, by loan modifications and permitting a lot more short sales, as otherwise the numbers should have been much more.

"We are seeing a bit of seesaw or roller coaster ride here with the numbers, and I think it’s because of all the outside intervention that’s impacting the foreclosure process" said Daren Blomquist, marketing and communications manager for RealtyTrac. "Even though there are a lot of good signs, it’s really too early to say we are totally out of the woods in the foreclosure crisis."

The signals for foreclosure crisis end continue to be confusing. There are lots of positive signs, but we have to include the loan modifications programs, unemployment and the way banks manage their foreclosure backlogs.

For example Alameda County registered a 143.6% increase in notice of defaults, In June. This comes as a result of the high unemployment, which is impacting lots of people. However, if we take a look at the year over year numbers, there is a slight improvement: some 896 homeowners in Contra Costa County received a notice of default in July, which means 53.8% drop from a year ago and a 15.9% decline from June. July brought another 636 homes to the banks, which represents a 17% drop from 2009, but a 10.4% gain from June.

In the Bay Area 3,149 homeowners receive a notice of default, meaning a 35.1% down from a year ago but 26.3% up from June. Bank became owners of a number of 1,467 foreclosed properties, which is down 11.5% from a year ago but up 18.8% from June.

Foreclosure drops come as a result of short sales, when a home is sold for less than the loan amount, and banks decide not to proceed with the foreclosure proceedings.

"I think certain markets have stabilized. In some cases were even have price increases, and we are going to see less homeowners underwater," Mayfield said. "Unemployment is the big unknown. Regardless of unemployment, I think that we can see some improvement in home values and continuation of low interest rates, so the the housing market continues to recover," he added.

The suit states that Aurora reaped more than $100 million in what the court documents call "illicit profits" from the alleged scheme.

The suit was filed in the U.S. District Court fro the Northern District of California in San Jose, and it represents the homeowners who paid the Littletoon, Colorado-based company money for the company to help them in "curing’ delinquent home mortgages.

The fraud scheme was the following: Aurora promised the troubled homeowners the foreclosure process’ halt if they engage themselves in three to six large monthly payments. In addition, the company will work with the homeowners to restructure, modify of resell the loan, allowing homeowners a chance to keep their homes.

"We intend to prove that Aurora’s workout plan was nothing more than a cynical ploy to take advantage of homeowners desperate to hold on to their homes," said Steve Berman, managing partner of Seattle-based Hagens Berman Sobol Shapiro LLP and the attorney representing the proposed class.

The suit states that after a give period of months Aurora foreclosed on the homes without giving the borrowers any notice that their requests for loan modifications were denied and they not let the borrowers to access any method for ending their loan deficiency, despite the provisions of the workout agreements. This provided four methods of ending loan deficiency: bringing the loan current, refinancing with another lender, modification of the terms of the loan at the discretion of Aurora and another workout option at the company’s discretion.

"The pas three years have been tough enough on homeowners without them having to worry about being preyed upon by unscrupulous loan services," said Berman.

The suit papers outline two stories of married couples who tried to stop foreclosure by contacting Aurora for a loan modification. The first couple refinanced their home with a mortgage company in early 2006. The couple suffered economic setbacks in 2008: loss of work and poorly performing investment. They contacted Aurora in 2009 and signed one of the so-called workout agreements.

The couple paid a total of $33,500 during the next several months and in return Aurora promised them to modify the terms of the loan. But this never happened. In May 2010 the couple received a Notice of Vacate indicating their home has been sold in foreclosure. They have never received a notice of  foreclosure sale or something about the foreclosure process to be completed. In addition, Aurora did not notify the family that it had been denied for a loan modification according to the complaint.

"We’ve heard of cases like this a lot over the last few year,"Berman said. "We’d like to bring struggling homeowners some sense of belief."

Berma believes the workout agreements were fraudulent in nature and he seeks to have the agreements declared void. In addition the law firm seeks an injunction against Aurora in order to forbid the company to continuously offer this deceptive workout agreements.

"So far in 2010, short sales represent 25.7% of all active listing inventory, 59.2% of all sales pending and 21.5% of all closed deals in the Tampa Bay area" said Smith.

Analyzing these numbers a Coldwell Banker’s affilitate, Sunbelt Title Agency launched a new service, called Short Trac – for those who try to sell their homes through short sale.

"Basically it’s a program that makes it easier for sellers to navigate through what has proven to be a very simple consuming, and unfortunately frustrating process. We believe Short Trac streamlines the process and will lead to more lender approvals in less time," Smith added. "This benefits everyone involved, especially the seller who may be faced with the reality that this is the only way they can sell their home and potentially avoid foreclosure."

Although the housing market yet far from recovering, and the numbers of unemployment would lead us to think there is no need for luxury home sales, the number show that sales of $1 million-plus properties are on the rise. According to Smith, condo sales in this segment is up with 220% compared to last year.

However, short sales are on the rise, there is a 30% increase nationwide over the past year, which destabilizes the housing price indexes, explained Oliver Chang, a U.S. housing strategist, co-writer of the Morgan Stanley report. Short sales proceeds are needed up to 40% more than foreclosed home proceeds, driving up S&P/Case-Schiller indexes even when values of non distressed homes are falling.

"There is a price premium you can get from a short sale," said Chang. "That makes it look prices are going up when they’re not."

Although the S&P/Case-Schiller index shows a rise in San Francisco home prices in May from April, there is an increase of short sales among distressed sales  and a decrease in the number of distressed sales, according to Morgan Stanley. San Francisco prices have gained 21% since reaching a low in March pas year as the Case-Schiller index shows.

Washington, Dallas, Chicago and Los Angeles are other cities where property indexes increased which resulted in declined values of non-distressed homes.