There weren't many foreclosures. San Francisco represented less than 1% of foreclosures in California despite being 20% of the population, and outcomes for foreclosures didn't end up in the homes being sold as much as it did in the rest of the country.

For example (not in 2010-2011 range) in 4th quarter 2011 Sacramento lost 2200 homes to foreclosure vs. 160 for SF.

Foreclosures don't indicate overbuilding, they indicate that people can't afford to pay for their homes.