Looking past the usual National Association of Realtors' spin, pending home sales actually fell during June, relative to year-ago levels; the group's widely-watched home sales index fell to 89.0, off more than 12 percent compared to the 101.4 registered one year ago. The June results represented a 5.3 jump from year-ago levels, although monthly data is not seasonally-adjusted, making monthly comparisons somewhat meaningless. The NAR, however, touted the monthly gain as evidence of a coming "broad-based" housing recovery. "The rise in pending home sales was broad-based with all four regions showing gains," said NAR economist Lawrence Yun. "This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009." The NAR's pending sales index has tended to stay in a tight range for the better part of a year now, and June's reading returns the index roughly to a level observed during April. Despite the monthly swings -- which may be nothing more than noise -- home sales activity has consistently trended downward during the past 12 months. Existing home sales for June came in 15.5 percent below last year's levels in the NAR's latest report, for example. Part of the monthly upward swing in contracts is likely due to increasing distressed transactions -- that is, short sales and foreclosed properties on the market. The NAR's Yun noted in late July that foreclosures and short sales represented roughly 1/3 of all market transactions, and we've seen estimates ranging from 18 to 30 percent from various data sources over the past month or so. Real estate data firm Radar Logic Inc. said on August 1 that their data had indicated 20 percent of transactions were of the distressed variety in the markets they track. What this means is that any monthly increase in contracts is likely to be heavily influenced by institutional sellers, HW's sources said. "A bank selling off an REO property may help the bank, but it does little for the average Joe that's stuck with his unsold house and the need to further drop his price to match," said one source, a senior bank executive that asked not to be named in this story. Telling in the NAR pending sales data, too, is the fact that contract jumps are being observed in hardest-hit markets, while areas with strong local economies are seeing contracts fall. Gains are strongest, for example, in Las Vegas and Sacramento, while Texas markets and the Pacific Northwest are seeing pending sales fall significantly. This sort of pattern gives away just who really is buying in this market. Ever the optimist, however, Yun suggested that these buyers may have halted the price declines in some of the hardest-hit areas. "Buyers entering the hardest-hit markets, in some cases with multiple-bid offers, may have put a floor on prices," he said. It's an argument that we find hard to buy, given the bifurcation of pricing trends being observed in key markets; so-called motivated sales are pricing well below traditional retail sales, and it remains to be seen how much longer retail sellers can hold out for such higher prices in the face of discounting by banks and other REO sellers. See earlier coverage on pricing splits. In other words, for many markets, there isn't one market "price" -- there are two. And understanding how one affects the other should be part-and-parcel of discussing any floor on more general pricing.