The sales tally included 3,495 existing homes and 320 new homes in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to the La Jolla-based researcher. Six of every 10 closed escrows were in Sacramento County, said DataQuick.

July sales beat June’s 3,758 total. But it was well below 4,126 closings in July 2008.

It’s the second straight month that sales have fallen below last year, when a massive supply of discounted bank repos fueled a sharp uptick in sales to first-time buyers and investors. The share of repo sales, which exceeded 70 percent early this year, fell below half in Sacramento County in July, according to the Sacramento Association of Realtors.

A dwindling share of repos drove up the county’s median price again in July to $180,000, DataQuick reported. That’s after two months holding steady at $175,000.

More significantly, the rate of year-over-year price declines greatly slowed again in July in Sacramento County, with prices 14.3 percent below the same time last year. For much of the past two years Sacramento County’s median prices – where half the homes sell for more and half for less – have slipped 30 percent or more from the same time a year earlier.

Regional highlights from DataQuick for new and existing homes combined:

• Sacramento County reported 2,318 sales, up from 2,284 in June. The $180,000 median price compared to $210,000 in June 2008.

• Placer County reported 617 sales, up from 598 in June. The county’s median sales price of $295,500 was down 14.3 percent from $345,000 last year.

•El Dorado County’s 237 sales were up from 218 in June. Its median price, $330,000 was down 15.4 percent from $390,000 in July 2008.

• Yolo County’s 240 sales were up from 225 in June. The county’s $281,500 median price was down 3.9 percent from $293,000 the same time last year.

• Sutter County reported 110 sales, down from 123 in June. The county’s $160,000 median price was down 21.2 percent from last year’s $203,000.

• Yuba County’s 113 sales were also down from 136 in June. The $155,000 median price was down 15.5 percent from $183,500 in July 2008.

• Nevada County reported 151 closed escrows, up from 143 in June. The county’s median sales price, $320,000, was down 14.1 percent from $372,500 the same time last year.

• Amador County’s 29 sales were down from 31 in June. Its $197,250 median price was down 32.6 percent from $292,750 in July 2008.

Regionally, the number of for-sale signs also fell for a 23rd straight month in El Dorado, Placer, Sacramento and Yolo counties after peaking at 16,262 in Aug. 2007. Sacramento-based researcher TrendGraphix reported 6,572 homes on the market in the four counties as July ended, the fewest in four years.

TrendGraphix said 14 percent of the for-sale signs were tied to bank repos and 27 percent to buyers seeking short sales, where banks accept less than owed to avoid the higher costs of foreclosing.

The real estate service Trulia also reported this week that 27 percent of Sacramento-area listings have cut prices, with the average drop being 11 percent.

“It’s been a bidding-war hell,” Bane said. “I increased my offer by $12,000 on one, and I still lost out. I was $13,000 over asking price on another and still didn’t get it.”

Welcome to the punishment being inflicted this summer on first-time buyers. Considered saviors of the region’s real estate economy, thousands like Bane are trudging through minefields where their homebuying dreams are repeatedly blown up.

That’s because at the lower end of the price scale there are far more potential buyers than homes for sale.

Horror stories increasingly abound across a Sacramento housing market dominated by repos and short sales.

Home Front is hearing from buyers who expected it to be easy but are being outbid by investors. When they do offer more than investors, the bank often takes the lower bid because it’s cash.

Others say offers are made without getting any response.

The only way to compete is to bid well above the listing price. But when appraisals come in below the offer, the deal is killed.

The alternative is short sales, in which banks take less than owed to avoid the higher costs of foreclosures, but they can take months to complete.

Another snag: Home sales increasingly involve “flippers,” said Smith, referring to investors who buy properties that they try to quickly resell for a profit.

But if the so-called flipper hasn’t held the home for at least 90 days, the first-time buyer can’t get a Federal Housing Administration loan, which requires only 3.5 percent down.

“Minefield? That’s an understatement,” said Smith.

For Bane, who’s looking for a house below $200,000, it’s not been easy.

“I’m just looking for a small, manageable house for myself and one roommate. Yet everything I find is sold within the day,” said Bane, a facilities business coordinator at Rancho Cordova-based Vision Service Plan. “We’ll write an offer and submit it, and then find it was already sold.”

Bane had expected she’d be moved into her first home by now. With the federal Nov. 30 deadline for an $8,000 first-time buyer tax credit approaching, she’s fretting.

What’s roughing up buyers like Bane is a shortage of bank repos – and an unwillingness of most private homeowners to sell at today’s prices. For reasons that aren’t fully understood, banks have held thousands of repos off the market. The result is bidding wars, especially for homes listed below $200,000.

With defaults and foreclosures back on the rise regionally, I believes a “substantial” new supply of repos may hit the market next month.

“I am hoping that’s true because right now, I’m telling you, it’s tough on buyers.”

In Rocklin, would-be buyer Karin DeFoe said she’s just had her fourth offer fall apart. DeFoe, house hunting for her college-age son, said, “We haven’t had any luck.”

Last month, she told Home Front she’s lost offers on three houses to cash investors. All made lower bids than hers.

“All the repos are priced real low to start bidding wars,” she complained.

To Bane, it’s just plain frustrating.

“We’ll go into houses and people are there before us, and people are there after us,” she said. “Every house we look at has lines of buyers.”

At least two dozen homes in the Sacramento region sold during the last three months for $25,000 or less, and more are coming onto the market almost daily – a record number for this decade in such a short period of time.

For that price, you can get a home with a leaky roof. Or severe fire damage. There’s a strong chance someone squatted in the home, taking everything good – pray for deals on copper piping – and leaving a lot of bad: trash and holes in the walls, if you’re lucky.

In Oak Park and Del Paso Heights, for example, median home prices have fallen 80 percent from their mid-2006 peak to around $60 a square foot. That’s about the cost of a house today in the 120-degree, high desert heat of Needles, Calif.

Still, in some ways the rock-bottom prices are a boon for the areas, according to real estate experts and community activists. All these houses are foreclosures; many have been vacant for more than a year, stripped by thieves and sucking the surrounding neighborhoods deeper into blight.

Offer homes for $25,000 and investors swoop in, even though typically they must pay cash and spend more to fix them up. Once repaired, the homes can become cash cows.

Stories like this have happened more than 40,000 times in the Sacramento area. Still, the tale in particular of one house in California’s capital region shows the sweeping change in a real estate industry that once involved mainly a mom-and-pop seller, a buyer and two real estate agents.

Today, an alternate universe – the repo business – dominates. And business is very good.

As the U.S. foreclosure crisis grinds on, the detailed work of processing, repairing and selling thousands of homes repossessed by banks is real estate’s new gold. In the past year, repo-related business has rapidly grown to national scale, fueling job growth in Colorado, Texas, Ohio and elsewhere to service the meltdown in markets like Sacramento and the Central Valley along with Phoenix, Las Vegas and Florida.

The nation’s housing collapse also has upended the pecking order of local real estate agents. Former top earners are on the sidelines, unable to move expensive homes. The new royalty is making good money in a real estate economy where things fall apart, where trackers can count almost a half-million repos on the U.S. market.

For Alejandro Maybuena, 60, and his wife, a three-bedroom house near Sacramento’s southern edge in 2005 represented a long-delayed accomplishment – their first house.

Remember how you felt when you purchased your first home.

A tentative deal to sell Winchester Country Club in the Sierra foothills community of Meadow Vista has fallen through because of a disagreement over price.

An Arizona development firm named Granite Mountain Capital won an auction for the right to buy the project from Wells Fargo & Co. late last fall. But the Arizona firm has backed away because of pricing issues, said Granite Mountain managing director Mark Isakson.

“Their opinion of the price, and the market’s opinion, is probably a little different right now,” he said. He said Granite Mountain hasn’t given up entirely on Winchester.

“We still like the property,” he said.

Myers, the famed Sacramento-area highway contractor, lost Winchester to Wachovia Bank in a foreclosure proceeding last year. Wachovia has since been taken over by Wells Fargo.

Still owing about $45 million, Myers filed for personal bankruptcy under Chapter 7 of the bankruptcy laws several months after the foreclosure. The bankruptcy doesn’t involve his contracting company.

Myers spent nearly 20 years planning and developing the 1,200-acre project, on a former hunting preserve near Interstate 80. He envisioned Winchester as a high-end haven for Bay Area and Los Angeles refugees willing to pay up to $1 million for a home lot.

C.C. Myers lost the Winchester Country

Club in a foreclosure to Wachovia Bank last year.

Now that does not mean I’m walking around with my head in the clouds; I know that we are in the midst of troubling times and this uncertainty can bring a feeling of imbalance and fear. Thing is, I cannot control the outcome…and none of us can. I can’t predict the future and neither can anyone else. So I focus on activities. I go to work on what my needs are for me today.

It is not my job to grind my teeth in frustration or disapproval. Neither is it my job to read comments on the economy from every crank out there with web access. My job is clear and that helps me stay focused.

A recession is a terrible thing to waste. Spring has sprung and there’s work to be done.

If we use California as an example, we know that the average price of a home was around $436k in 2006.  We also know at that same time that affordability was less than 13%, a historic low.  Take this combination and you have people getting into loans they couldn’t afford called sub-prime loans.

Most of these sub-prime loans have worked their way into the system but not through the system.  In fact, an enormous number of them (that means the majority) have been held back due to moratoriums.  The goal of the moratorium was to keep people in their homes but the programs didn’t work.  Over 60% of people re-defaulted on their loans after a modification, ergo the recent demise of the moratorium.

After the moratoriums expired it allowed banks to continue the foreclosure and eviction process, which typically takes 2-3 months at least.  The moratoriums ended in late March so what we have is a housing sale boom coming this Summer, keep your eyes open for June-August but…

There’s more!  Don’t think that after we get through this bulk of inventory that prices are going to rise again because they’re not and probably won’t in our lifetime (that’s inflation adjusted of course).

There’s more defaults to come in the form of alt-a and adjustable rate mortgages that are due to reset all the way through 2012.  With that in mind, there will be inventory for several more years.  Only after that inventory is worked through can prices begin to stabilize.

Back to California, we’ll have thousands of homes hitting the market in hard hit areas like Sacramento and Elk Grove, arguably the start of this crisis as determined by several national news agencies. So if you think there are lots of empty homes on your block now, wait until August because it will get worse.

If you’re in the market to buy a home, do it this year for the tax breaks.  There’s an $8000 federal tax credit and more available through your state.  In California you can get an additional $10,000 for buying a new home.