Douglas C. Pizac / The Associated Press 2006

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With home sales still in a slump, the temptation for many real estate agents might be to look for signs of a brighter future.

But they might want to be careful about using one local market indicator to help paint a rosier picture.

Pending sales — those that are under contract but have yet to close — have gone up in the past six months compared with the same months in 2006, statistics from the Tucson Association of Realtors Multiple Listing Service show. The number of pending contracts jumped as high as 63 percent in July, compared with the same month in the previous year.

"We should see these contribute to an increase in unit sales for August," Judy Lowe, president of the Tucson Association of Realtors MLS, wrote in the July sales report.

The National Association of Realtors treats pending sales as a leading indicator of housing market activity, meaning that today's pending contracts should translate into tomorrow's closings.

But so far, that hasn't been the case in Tucson. Closings — actual sales — have fallen every month since June compared with the same months a year ago. In August, the number of actual sales dropped by about 26 percent from August 2006, MLS reports said.

Walter Molony, a National Association of Realtors spokesman, said the discrepancy might be due to a higher proportion of new-home sales. Home builders in many areas have suffered from cancellations in recent months, which would count as pending sales but not as closings. New homes also have long waiting periods between the time when a contract is signed and when the home is finished and sold.

Problems in getting financing also might play a role in keeping a pending sale from becoming a closing, Molony said. He said that may have been a problem particularly with the more expensive homes requiring jumbo mortgages — those above the $417,000 limit for conventional loans.

"There have been liquidity issues there, and availability issues," Molony said about jumbo loans.

Lowe, Tucson MLS president and executive vice president of Realty Executives Southern Arizona, said she is still optimistic that the pending-contract numbers are a good sign for the local market.

"I think that means that there are more buyers writing acceptable offers, and more sellers being realistic," she said.

Lowe added that she doesn't think many sales are falling through because of problems getting mortgages, at least for buyers who can qualify for Federal Housing Administration-insured loans, which are capped at $239,850 in Pima County. FHA loans have more flexible terms and require lower down payments than conventional mortgages.

"We're not seeing the credit problems that a lot of communities are seeing," she said.

No matter the reason, pending-sales numbers are too fraught with uncertainties to be a reliable indicator of the direction of the market, said Steve Quinlan, chairman of the Long Cos.

"The pending report is not as accurate as looking at what the closings are, because that's a more concrete number," he said.

Quinlan said new homes have made up a heavy proportion of sales in recent months, particularly because of the generous incentives offered by home builders. But many of those sales aren't captured in the MLS numbers, he said. A note on the monthly reports from the Tucson Association of Realtors MLS states that the sales information does not include "a substantial portion of new-home sales."

If more new-home sales were included in MLS, the closing numbers would actually look better, Quinlan said.

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