Though modest, pending home sales continued their rise in May for the fourth straight month.  That is the first time in nearly 5 years.

It had been predicted that there would be no growth, so this was actually a pleasant surprise.

But pending does not necessarily mean that the home will sell.  Sales that actually close, in relation to those that go pending, are not where they should be.  Deals are delayed or falling through due to the new rules for appraisals.

Many complain that appraisals are including foreclosed properties in their list of comparable homes.  Foreclosed homes tend to sell for about 20% less than regular home sales because banks are desperate to get them off their books. 

With many appraisals not distinguishing between to two types of properties, homes values are being set below what is expected.  This can cause lenders to back out and deals to fall through.  Eventually these numbers will right themselves when we have less foreclosures, it will just take some time.

The good news is that buyers are out there putting offers on homes.  This indicates a market rebound, albeit a slow one, but a recovery none-the-less. 

http://money.cnn.com/2009/07/01/real_estate/May_pending_sales/index.htm?postversion=2009070110

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