Last months economic news put a damper on prospects for a robust national recovery. With lower-than-expected domestic job creation and a slight increase in unemployment, combined with equity market sell-offs and uncertainty in the eurozone, the national media immediately sounded broad-based alarms.

While the news from Washington may have seemed bleak, the truth is that the San Francisco Bay Area is thriving on its own regional economic drivers.

Our research at Pacific Union International suggests that, especially when it comes to the residential real estate industry, our markets continue to benefit from record-high demand and both seasonally and historically low inventory. Since February, we have been encouraging home sellers to join the party.

Here are positive economic indicators that drive our markets – and paint a fundamentally stronger picture of the real estate market.

• More jobs fuel the economy’s engine. The Bay Area economy is improving significantly faster than the rest of the country. In April, San Francisco’s unemployment rate was 7.4 percent – down a significant 3.5 percentage points from the statewide average of 10.9 percent, and down 0.7 percentage point from the U.S. average of 8.1 percent. Marin County’s numbers were even better, with an unemployment rate of 6.4 percent – the lowest in California. The six Bay Area counties served by Pacific Union International’s real estate professionals consistently post stronger employment numbers than any other region in California. This drives consumer confidence and residential real estate demand.

• Home sales are booming. Bay Area home sales are setting new high-water marks, with April up 9.2 percent compared with April 2011. In fact, we’ve already projected, based on our Q1 results, that 2012 sales will exceed the 10-year average in the Bay Area for the first time since 2005. The number of homes on the market is down as prices move up. We believe the market is changing with a velocity we haven’t seen since its collapse in September 2008.

• Mortgages are “on sale” at historically low rates. Treasury rates hit record lows last week, with the 30-year Treasury bond’s interest rate falling to 2.54 percent and the benchmark 10-year Treasury note hitting a low of 1.46 percent. Average U.S. rates on 30-year and 15-year fixed mortgages dropped to record lows with the 15-year loan dipping below 3 percent for the first time ever, according to Freddie Mac. That means it’s more affordable than ever to finance a home – and there are significant financial benefits to buying rather than renting a home.

• It’s a seller’s market. Demand is outstripping inventory in the Bay Area regions Pacific Union International serves, a trend that’s echoed in Silicon Valley. Once again, it’s time for sellers to join the party.

• Foreclosures are fewer. Foreclosure rates continue to drop around the Bay Area. In April, the last month for which data was available, default notices fell more than 9 percent from March in Santa Clara County, 24 percent in San Mateo County, 21 percent in Contra Costa County, and 25 percent in Alameda County.

• And don’t forget Facebook. The IPO may not have lived up to the hype, but it will still mint plenty of millionaires. And Facebook will create huge boosts for the tech industry, the local economy, and of course, real estate. Silicon Valley is seeing soaring housing prices, and the trickle-up effect will benefit San Francisco and other Bay Area cities – not to mention the Sonoma and Napa County wine country and Lake Tahoe second-home and vacation-rental markets.

Here are a few positive internal indicators driving a vibrant outlook from Pacific Union International. Our view is that the Bay Area economic recovery is healthy and as a result, our local real estate markets are thriving.

We’re constantly reminded that real estate is local – and you can’t assume that national trends apply to our neighborhoods.

Pacific Union International Sales Data (All Regions)

The table above illustrates significant and sustainable housing demand up over 30 percent year-over-year. Multiple offers are contributing to stable pricing. Units sold are significantly higher in Sonoma (Santa Rosa) and Contra Costa counties, which resulted in the modest overall decrease in average sales price.

Pacific Union International New-Escrow Trends (All Regions)

• The 26-week average increased year-over-year (trailing 12 months May 2012 vs. trailing 12 months May 2011) by 25.7 percent in unit volume and 23.5 percent in dollar sales volume.
• The 10-week average increased year-over-year (trailing 12 months May 2012 vs. trailing 12 months May 2011) by 17.5 percent in unit volume and 10.5 percent in dollar sales volume.

It’s interesting to note the significant increases in the 10-week averages through March and April exceeded the prior year averages in both units and sales volume by 30 to 40 percent overall.

These 10-week averages have held very steady at roughly 75 to 80 new escrow units per week and $70 million to $80 million in new-sales volume per week. Both are very positive leading indicators of sustained growth.

This equates to 10 percent or less in change/variance over the last 90 days. Our volume continues to be stable and consistently strong year over year.

A new survey from Pulte Group, one of the nation’s largest home builders, says renters are more interested in buying a home today than they were a year ago.

The survey found that among renters who plan to purchase a home sometime in the future, 60 percent have “increased their intent to do so” from a year ago. A similar percentage intends to buy a home within the next two years.

The news comes as many economists and market observers believe the struggling housing industry has reached bottom and begun a solid recovery. Homes remain especially affordable, and interest rates are still near record lows.

Rental prices, meanwhile, are sky-high and still climbing in most markets – especially here in the Bay Area. A recent study by the National Low Income Housing Coalition found that rents in much of the Bay Area are the least affordable in the country.

Those skyrocketing rents are helping convince some Bay Area renters that buying might be better. Other reasons Pulte found in favor of buying: people like to call themselves homeowners; it’s a good financial investment; and they need more space for an expanding family.

Consider moving from renting to buying? Start here:

• Do the math and compare the benefits of owning versus renting, including tax benefits and extra storage space.
• Get your finances in order, line up your financing, and start saving for a down payment. Talk to a Mortgage Professional like Tina Jennings today.
• Finally, when you’re ready to find your dream home, contact Beverly Barnett.

A pair of home sales reports released Tuesday seemed to splash cold water on the prospects of a housing market recovery, with the U.S. Commerce Department announcing a 7.1 percent drop in new-home sales in March, and the S&P/Case-Shiller Home Price Index logging a 3.5 percent drop in prices in February.

But here’s one thing the reports don’t mention: You can’t paint the Bay Area with the same broad brush as the rest of the country.

In marked contrast to the national reports, we’re not seeing these gloom-and-doom numbers here in California or the Bay Area.

In fact, first-quarter results here at Pacific Union International show a recovery well under way and all signs are pointing to our best year overall since 2005.

And our local numbers are backed up by another report out Tuesday, from the California Association of Realtors, which found that pending home sales statewide rose for the third consecutive month in March.

The C.A.R. said its Pending Home Sales Index rose from a revised 126.5 in February to 143.7 in March, based on signed contracts. The March index was the highest since April 2009, when the PHSI was at 146.9.

The C.A.R. index also was up significantly from the 128.9 recorded in March 2011, marking the 11th consecutive month that pending sales were higher than the previous year. Pending home sales are forward-looking indicators of future sales activity, providing insight on the future direction of the market.

Here at Pacific Union, our first-quarter market report offers proof why national sales figures don’t tell the full story of local conditions and activity.

Our agents helped sell 3,717 single-family homes in the first quarter of 2012, up 6.1 percent from the year before — and we feel sales would have been even higher if not for a limited supply of properties on the market.

In certain areas, we saw even bigger percentage increases in sales from Q1 2011 to Q1 2012. Marin jumped 8.8 percent, while Sonoma Valley and Sonoma County were each up over 14 percent.

The takeaway here? The national headlines don’t tell the tale for the Bay Area. We are seeing compelling indicators that home sales are increasing, prices are stabilizing, and buyers are returning to the market.

And we’re looking forward to a strong 2012 — right here in our back yard.