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.

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.

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.

"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.

This necessitated home buyers, aspiring for a San Francisco property, to inevitably go in for the so-called Jumbo loans – with conforming limits beyond $417,000, so as to buy a home since the median price of a San Francisco area home, ruled during the years 2002 to 2007 in the range of $675,000 each.

Prior to the credit-crunch, due to foreclosure tornado hitting this region somewhere in August 2007, the norm for purchasing homes from SF Bay Area was to get jumbo loans and the percentage of these bigger size loans was 60% out of all sales made. Now that lenders are not inclined to take more risk and are hesitant to entertain loans from this category of applicants, the percentage recorded for June sales has diminished to 33.3% of all home sales.

However, purchase of properties from low end neighborhoods – in the bottom of the price ladder at $300,000 – showed an increase last month, by accounting 34.2 percent of all SF Bay Area home sales. Same period last year, there were still large numbers of foreclosure properties from this price range, and so the share of purchases from this category was recorded as 39.5%.

In the medium price range of $500,000 and above, home sales accounted for 39.2% in June. Sales of single-family homes priced above $800,000 recorded 17.5 percent of the total home sales in June.

Experts view this trend in a different way – had the origination of jumbo loans been higher as in the past, the sales of high-end properties in SF Bay Area would have been much more in June. We will see what happens in the coming months of 2010.

June brought 20% discount from the properties sale price, so professionals from San Francisco came across the bay and bought homes in Oakland. According to the report the buyers paid 0.1% less than asking price, that means only $1,080 less than the last listing price.

"We’re seeing multiple offers, we’re seeing above asking price" said David Kerr, a ZipRealty agent from Oakland. "People are buying foreclosure, fixing them up and selling them and getting offers", he added.

However the lenders don’t give out money so easily. They generally require appraisals before giving a mortgage and appraisers consider what foreclosed homes in the area sell for when determining how much home is worth. And if the home is sold at too a right prices, the sale falls apart.

Although San Francisco struggles to regain its footing, that doesn’t seem to have influence on the Noe Valley neighborhood. Here most homes are going to just above listing price – according to the Zillow.com. Homes sold for and average of 0.02 percent more than the selling price. Although that’s only around $200 but the phenomenon is what drags the attention.

"It’s crazy. I had some house with five offers and it went from $1,4 million to 1.7 million," said Brendon DeSimone a San Francisco realtor. "The valley just popped. It’s not uncommon for one open house to have 200 people come through" he added.

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.