The main factor Rosen sees as the source of foreclosures is the job losses. This continues to put a drag on the regional and national recovery. He is forecasting it will take until 2015 t to recover the huge number of 8.4 million jobs lost. There are some range of sectors where we can observe a small growth, but this is seamless compared with the national or statewide number. San Jose will leas the Bay Area job growth, up 1.1% versus dips in San Francisco – down 0.8% and Oakland – down 1.4%.

"We see 2012 through 2014 where we start to see some stabilization, given an abundance of supply today and you still have properties that need to go through the foreclosure process," says Realtytrac CEO James Saccacio.

A very important aspect is to see house transactions. While they are present, californians have a 60% chance of a slow recovery, a 15% chance of double-dip recession and 25% chance of a moderate recovery.

However, Bay Area isn’t leading the list, Phoenix and Las Vegas are. But when home prices are appreciating, the so-called wealth-factor gives people confidence to send. So a housing recovery is an important factor in an economic turn-around as much as consumer confidence and putting Americans back to work. Five years ago, home ownership nationally was around 70%. Today it has slipped to 66.9% and it is still falling.

Good news first – Marin County as part of a three-county West Bay region consisting of San Francisco and San Mateo, turned out the lowest unemployment rate of all counties in California State, in the month of July at 8.6 percent – although compared to last July of 2009 it is up from 8.4 percent. It is reported that the total number of school jobs in that region decreased by 3,400; federal government jobs were lost between June and July by 1,000 positions. The financial activities sector reported continuous job losses for the 36^thconsecutive month, and over the year job losses totaled to 3,700 jobs.

For California State as a whole, the unemployment rate increased from 12.2 percent in June to 12.8 percent in July. The reason being scaling back of education jobs over the summer as also elimination of temporary jobs posted for the task of compiling U.S. Census 2010.

In the case of North Bay region also the position is more or less same, as reported by the Employment Development Department. In Sonoma County the unemployment rate edged up slightly from 10.5 percent in June to 10.8 percent in July, compared to 10.4 percent prevailed over July last year.

Here also loss of government jobs are significant – decrease of 5,800 jobs to reach 23,200 in July from 29,000 in June; year-over-year loss is 1,100. Specifically, construction industry lost 1,300 jobs over the year, but added 100 jobs in July this year.

Slight increase in unemployment rate is reported from Napa County – 9.3 percent in June to 9.4 percent in July; increase from 8.5 percent last year; government job losses 600 and manufacturing industry added 500 jobs over the year, 200 in July alone.

Here you will find a buyer’s market, though every market depends on the city and community. Places like Belvedere, one of the priciest places in Bay Area, is now having tough times in getting sales transactions, where only 4% of the 48 houses that are listed are in contract. These luxury estates are sitting longer, waiting for the perfect buyer, to put down the cash.

"As a general rule, the more expensive the house the more likely is to sit on the market… The numbers of qualified buyers in every price range except for the very low end has diminished dramatically," said Tracy McLaughlin, co-owner of Pacific Union and a specialist in high-end homes.

Marin is the place where the prices are acceptable. There are not quite the lower end, but a fair price, you’d say.

"In Kentfield, for examples where the median home sold for $1.9 million in the first seven months of the year 18% of homes on the market were under purchase contract last week. A little over two miles away in Greebrae, the figure is 37%, more than double the absorption rate… Greenbrae homes cost half as much with a median price of about $1 million," said Ron Park, a broker with McGuire Real Estate.

There are lots of opportunities, in the area such as Novato, the most northern city in Marin, where there is an ample inventory of properties for sales and the median price in the first 7 months of 2010 was $495,00. 34% of the available homes for sale in Novato were in contract last week.

The Emergency Economic Stabilization Act of 2008 (EESA) – as the name itself denotes was promulgated, with a view to stabilize the country’s economy two years back. It aims to bring the economy back on its original track, and take all steps in achieving this goal, which is must for solving the woes in all the sectors including Real Estate.

While it is often-repeated advice to keep the employment growth on a standard scale of 5 percent annually, the government is also burdened with repair work for the damages already caused. This is necessitated to keep things going and prevent situations falling out of control.

With this view, a special fund of $1.5 million has been drawn from this federal fund, created under the Act, which is going to be allocated to hardest- hit-states by foreclosure epidemic, so that the home owners in distress are financially helped. Out of this subsidy allocation, California gets the major chunk of $699.6 million.

The other states get – $418 million for Florida; $154.8 million goes to Michigan; Arizona is allotted with $125.1 million and Nevada gets $102.8 million. How these allocated funds are going to be spent?

Basically non-profit organizations sponsored by federal government have the authority to dole out these funds, to troubled home owners. In California it is going to be California Housing Finance Agency (CalHFA) and the plans are broadly – to help unemployed home owners in preventing foreclosures; upside down home owners facing the trouble in paying off the mortgage, since the value of their homes is below what they owe on their mortgage; and render financial assistance for people, who forfeit their home to foreclosure or hand over the keys under deed-in-lieu of foreclosures.

The “Keep Your Home” program of CalHFA will handle the funds whereby – unemployed home owners will get 6 months mortgage repayment of $1500; up to $15,000 assistance for past-due mortgages; principal reduction in mortgages equal to market levels of homes; and transition assistance for those moving from their homes under foreclosure.

It is reported that San Francisco has been enjoying a healthy market as far as condominiums are concerned during the past few years. The median prices of condos went up to $800,000 earlier. Consequent to the housing bubble in the whole country including San Francisco, inevitably there was slump in condo sales, with the result the median price of condos were down below $700,000. The inventory of unsold condos was huge and it took nearly 50 to 70 days at times to sell them off.

The report points out that during the first 3 months of this year, condo sales have picked up, thereby giving an indication to market analysts to see it as a sign of market recovery. The report quotes The Frontsteps real estate blog, wherein the SF Association of Realtors report was re-published and an excerpt quoted as:

“In a welcomed development…..The condominium market also gained ground during March with the median sales price rising to $670,000, a 4.9 percent increase from the March 2009. Stimulated by the availability of FHA financing, tax credits, and attractive pricing/concessions in comparison to recent periods, completed condominium sales reached 206 units in March, a 76 percent increase from the previous year.”

The Condo Report criticizes that people “look at information interpreted by a Realtor Association with some skepticism” but says the data alone are easy enough to confirm. It refers to the Mark Company’s real estate report pertaining to quarter-1 of 2010 which shows –

"A total of 183 new construction condominiums closed in San Francisco during the first quarter, an 11% increase compared to one year ago. This leaves 800 new construction condos on the market, a 43% decrease from last year. The average price per square foot was $793, compared to $680 one year ago."

After a thorough analysis, the Condo Report concludes with a positive note that "sellers have become more realistic in their price expectations."

To refresh memory – federal government announced tax incentives to make way for speedy recovery of economy and enthuse home buyers to engage in buying activity. To become eligible for the tax break – $8,000 for first-time home buyers and $6,500 for those already own a home and buying another to move in – the stipulation was purchasers must have entered into a binding contract with the sellers latest by April 30. The deadline for closing the deal was June 30, but Congress extended it to Sept.30 last week.

Experts say the extension gives buyers time to finish up their paperwork only. It does not create new tax breaks for people, who were not in escrow before May 1, and the housing industry does not plan to press for another credit either.

The tax incentives boosted home sales in all the housing markets, including the 9-county SF Bay Area – no denying. It is reported that after the eligibility for tax credit expired at the end of April, new home sales plunged 33 percent in May. Existing home sales fell a more modest 2.2 percent, but that was worse than expected.

Brad Kemp, director of regional research for Beacon Economics, puts it nicely thus -“A lot of demand was pulled forward by the program”. He compares it to putting a tablecloth on a table and pulling it towards you. It will bunch up in the front, leaving an empty space behind.  He says “That’s where we are now, in the trough behind the incentive program”.

Lucien Salvant, a spokesman for the National Association of Realtors says “It’s time for the housing market to stand on its own two feet.”

Now Freddie Mac reported that the average rate on a 30-year fixed rate conforming loan was 4.58 percent last week, the lowest since it started keeping track in 1971. That was down from 4.69 percent the previous week and 5.32 percent this time last year.

But market analysts say they won’t fill the void in the housing market left by the expired home-buyer tax credit, which is not likely to be revived.

During this week, in Contra Costa County the city council and school board meetings were engaged in this and approved budgets with deep cuts, with impacts concerning services, jobs and welfare programs, affecting tens of thousands of area residents.

The economic down turn and the steep decline in Property Tax revenues have been causing reductions – somewhat deeper into public treasuries, making them shrink rapidly for the past few years. Apart from some cities like Richmond and Brentwood, which had foreseen the deficit and prepared for tougher times, other cities and school districts with multi-million dollar budgets had to swallow the bitter pill of big reductions in staffing and services.

Budget trimming effected in Concord is about $5.5 million and it expects to spend from its reserves nearly $5 millions. The members of the city council took a first step towards putting a tax measure on the November ballot.

The effect of lesser revenue in Antioch is resulting in a shortfall of $2.9 million, which is being managed by ordering layoff of 20 city workers; cut back its recreation department and animal shelter services. According to City Manager Jim Jakel – the city will be left with about 50 city workers, not counting the Police Department.

In Dublin the cut of $1.5 million from its $72.4 million operating and capital improvement budget is going to cost the city – one police officer; fewer hours of work for library patrons and the cancellation in full of the annual Day on the Glen celebration.

In the West Contra Costa school district, where the deficit will be to the tune of $3.2 million next year, the funding looks even tighter for the next two school years. Although the school board’s approved budget this week preserved programs such as class-size reduction in elementary schools and adult education, the district will need to trim $3 million from its 2011-12 budget and another $3 million from the 2012-13 budget.

The state Employment Development Department informs that the unemployment rate slightly slid down from a revised 11.4 percent in April – the peak was in January at 12.1 percent and was recorded as 10.9 percent in May 2009.

In the metro region of Santa Clara and San Benito counties, there were visible gains in job opportunities in computers and electronics manufacturing, where the job growth was a good 300 jobs compared to April.

The good news is from San Mateo County with 8.8 percent unemployment – it’s best in a year and third lowest among all the 58 counties of California State. Rural San Benito County’s unemployment rate was 17.6 percent, nevertheless.

Janice Shriver, EDD Labor Specialist says that the trend is headed in the right direction and just the mere fact we are showing gains over the month, instead of losses, is good.

Stephen Levy of the Center for Continuing Study of the California Economy – one of the Economists commented on the dip in the local unemployment rate as another painfully slow step on the way to recovery. He was optimistic saying it is a month of improvement, although not as much as we want, but it is a month of improvement anyway.

Overall in the California State there was slight dip in unemployment rate – from 12.6 percent in April to 12.4 percent in May. But Michel Bernick, a labor lawyer and former EDD director believes that a net job gain of 28,300 is illusory, because it is based on temporary census hiring.

In the two-county region of Santa Clara and San Benito employers reported 853,600 jobs; in the past 12 months this region has lost 12,100 jobs – construction topping the list by 4,400 fewer jobs. While the monthly gain of jobs in the region is reported as 4,200 jobs from April to May, some of them were in hiring temporary census workers.

For the second year on succession, Bay Area News Group has released the details in their database, dealing with government employee’s salaries and related matters. According to it, 80 percent of government budgets are spent on salary and related personnel costs like health benefits, contribution to pension etc.

California Association of Counties executive director, Paul Mcintosh explains this means when government authorities, such as counties reduce employees, it directly affects the public by reduced services. The News Group data shows that reduction of staff was resorted to by county governments of Alameda, Contra Costa, San Mateo, Santa Clara, San Joaquin, Napa and Solano in 2009. Mcintosh says counties were laying off employees, while people were lining up at 6 a.m. to apply for food stamps.

He says California government’s proposed cutting of funds towards state welfare-to-work program will shrink the county budgets further. A combined project deficit of $2.25 billion is experienced by the 15 largest counties in the State, including Contra Costa, Alameda, San Mateo and Santa Clara counties.

News Group data shows that the budget cut has culminated in cutting workers strength. Oakland, the East Bay’s largest city, saw a reduction of 374 workers in 2009 from what it was having in 2008 and thereby the reduction in payroll amounted to $36.7 million.

The situation is well described by Gilbert Seldon, the fire chief of the Alameda County fire department –“most of public service agencies have cut deeply, but the public still expects to receive basic services”. Fire-fighters work 56-hour weeks at regular pay under state law and don’t get overtime until the 57^th hour.

What about the tax-payers’  money spent on bail-out programs caused by these government-induced unemployment?

Accordingly, valuation of intellectual property has failed to succumb to any type of uniform accounting convention, and balance sheets routinely omit attributing value to this type of asset. If indeed they do it is either an arbitrary or nominal amount. This being the case, entities that are laden with intellectual property will necessarily be undervalued, and so offer great investment potential. Those that derive their very character from intellectual property will offer the most potential for profit of all.

The South Bay district encompasses what is the world’s largest concentration of technological research and development. Clearly, this intellectual property will also remain unrecognized and so offers similar economies of investment for prospective buyers.

In this respect, the short sale that has necessitated months of inane deliberation before closing will in all likelihood remain an investment of exceptional quality considering the great undervaluation at its onset. Furthering the call to decisive action on the part of the buyer in a short sale transaction, the South Bay region stands alone as a geographical anomaly offering such promise.

Indeed the very onset of intellectual property recognition in areas such as California’s Silicon Valley may well ignite similar specialization in property markets around the epicenters of the world’s technology. For the moment, the Silicon Valley seems to bear that title.

Of course, the benefit of property surrounding its intellectual counterpart is limited, and at some point the market will reasonably price in an adaptation of its reasonable value. Until then however, intellectual property has gone unnoticed and rarely factored into the machinations of investment decisions. It is simply due to an inability to measure them that they have eluded us thus far.

When balance sheets around the world begin to display a carefully deduced intellectual property valuation, it will be too late to invest in the South Bay. It is a commitment to the acquisition of property now that will allow a healthy profit; otherwise the value would have long since been exploited by market predators.

The prevalence of short sales available in the South Bay at present is unlikely to continue. While banks prefer to be depleted of bad debts, they do indeed benefit from a known and controlled sale in the present, without having to enter into an unknown transaction in the future. Regardless of the volume of bad debts, any individual bank needs to convert these debts into cash, and only then can they reconsider the practice of lending to the private sector The private sector will use its intellectual property in time to develop unbounded innovation. Corporations thrive on innovation. This is what makes corporations an excellent hedge against inflation. As innovation increases, productivity does too, and this will invariably lead to an increase in the share price, and economic growth.