This property is really weird. It is originally sold as $793,000 in 2006. Then it is re-sold at $875,000 in late 2007. San Ramon's property value peaked in 2006. Late 2007, price has already dropped 10%. It is amazing original buyer can get off the property with a handsome profit. I can only say, unless the first owner put a lot of after-market-upgrades, the second flipper, who latter default and foreclosed on, is really really stupid.
We can not judge a property's value by sqft. A $610,000 is below market value. But it may not be that off mark. If the original sale price $793,000 is its peak value, then its current price is about 25% off peak. That price drop is at same ball park to other properties in San Ramon.
If you can get a property with more than 30% discount to its peak and with price back to 2003 level, that is a good deal. If it is less than 20% from peak and price only back to late 2004, it is probably overprices.
Even at this market condition, it is hard to find a great deal on a perfect properties. To find a good deal, you have to willing to settle on a less desirable (repair, floor plan, location ...). I found out some of recent good deals are mostly on those properties with some shortcomings.
BTW, this listing is a reasonable one: http://www.redfin.com/CA/San-Ramon/2515-McLaren-Ln-94582/hom
It is about 25% drop from peak value of $870,000.