The rash of foreclosures has clearly been bad for the real estate market in California, including the perennially popular San Francisco. While that may be bad news for people in the industry and for sellers, investors looking to snatch up some great deals or people who have always dreamed of buying a previously-unaffordable home by the bay have cause for celebration. Why? Because the huge overload in the San Francisco foreclosure listings has caused prices to collapse under their own weight.

In San Francisco County, for example, the median price has fallen more than 40% in just one year. Although the median price in the area is still around $375,000, that's definitely a lot cheaper than in 2007 and earlier. Plus, if you want to live in San Francisco proper, housing prices are falling there, too. You can now find San Francisco foreclosures listings for around $700,000 which represents a 12% drop in price over the last 12 months.

The good news for everyone involved is that these properties are starting to sell. In October 2008, almost half of all the homes sold were from the San Francisco foreclosure listings. That's good for banks who need to recoup their losses. Of course, all of this may eventually change once the real estate market and the rest of the economy start to move in a healthier direction which is why investors should begin asking fast.