Miscalculating Home Sales by the National Association of Realtors
So, just what is going on in the housing market? The National Association of Realtors (NAR) realized this week it’s been overstating existing home sales. Instead of 20.6 million existing home sales from 2007 to 2010, there were actually 17.7 million homes sold. More surprising is that, in explaining the revisions, an economist for the NAR said, “from a consumer’s perspective, only the local marketing information matters.”
Oh, really? This widely reported and closely watched data affects any number of economic indicators, along with interest rates, investments and plans made by businesses and individuals. Consumers are greatly affected by this data.
Apparently, the data reported by the NAR started differing from independent researchers about a year ago. The way the NAR collects and analyzes data was reassessed and the group met with government and private housing experts and mortgage companies, along with CoreLogic, a data firm that first raised questions about the NAR’s sales figures.
The result of this revelation is that all of the experts are realizing that the housing market has been worse off than previously thought. But, the number of houses available for sale was also revised downward, so while sales numbers dropped, inventory did as well—meaning supply and demand didn’t change.
The NAR blamed the discrepancy on a number of factors, from more builders using the MLS service, which inflated sales figures, to regional overlap where more than one MLS system lists the same property.
Revisions by year:
- 2007 down 11% to 5.04 million
- 2208 down 16% to 4.11 million
- 2009 down 16% to 4.34 million
- 2010 down 15% to 4.42 million