There are many reasons why and how this can happen. In the meantime, remember that the home is owned by the person listed on the DEED. For the most part a deed holder can start a sale of the home/property at anytime they are the property deed owner.
But here are a few reasons it may be a short sale even though it is/was on the auction block:
1. The lien holder (Typically Lender) has decided to postpone auction.
2. Bankruptcy has been filed, foreclosure halts, owner can still list the home for sale.
3. Owner/Borrower has negotiated to have foreclosure postponed by attempting to do a short sale.
The California Homeowner Bill of Rights became law on January 1, 2013. It contains a restriction on dual track foreclosure: Mortgage servicers are restricted from advancing the foreclosure process if the homeowner is working on securing a loan modification. When a homeowner completes an application for a loan modification, the foreclosure process is essentially paused until the complete application has been fully reviewed.
This could be one reason.