Real Estate Marketing & Beyond
Real estate professionals and economists who paid close attention to the monthly existing-home sales data provided by the National Association of Realtors were given a sharp shock earlier this week. Last Tuesday it was revealed in the Chicago Tribune that the association had been consistently reporting bad figures each and every month since January 2007, when the housing crisis really took hold.
NAR admits to 'over-estimating' existing home sales data. © Patryk Kosmider - Fotolia.com
The NAR has now advised that it will start revising four-years worth of sales data downward, beginning next week. The bad data has been attributed to a statistical error in its software that resulted in some home sales being counted twice.
Lawrence Yun, chief economist at the NAR, explained that the association used the Multiple Listing Service (MLS) to track existing home sales. However, he pointed out that the MLS database is limited to data from sales listed by realtors only. Sales of homes listed by owners are excluded from the database, and so the MLS only provides a narrow view of real estate markets. He also pointed out that because the majority of homeowners use realtors, sales figures for realtor listed homes became artificially inflated.
Also, the NAR often made a number of assumptions each month, based on data from the 2000 Census, which is clearly outdated.
The NAR has yet to reveal how big the revision to its existing-home sales data will be, but Mr. Yun did say that there is likely to be a “meaningful” decrease in the numbers, and that the new revision would show that the housing market downturn was even worse than previously thought.
The bad data is particularly concerning because the US economy is so closely linked to the fortunes of its real estate markets, and real estate policies followed by both Congress and the Federal Reserve have been based in part of the NAR’s existing sales data.
This is not the 1st time it has been revealed that numbers were fudged. If you buy their reason for the mistake, I have a bridge I would like to show you. Now here is the real insult: when I became aware of the reporting problem I tried to cancel my membership to no avail. The MLS membership fees paid to the Chicago Realtors Association include the annual dues to NAR, and they won't unbundle them. So what do you think about that?
FYI, we first reported this in March, 2011:
See: http://www.msnbc.msn.com/id/42258117/ns/business-eye_on_the_economy/t/flawed-housing-data-might-mask-depth-woes/#.TvDDadQ7U1I
lol, thanks John, but for your information we're just pointing out the fact the NAR finally admitted to doing so - whereas previously your story was just speculation 😉
Have a very merry Christmas!
Who cares, Prospect!!!!
In Mike Wheatley's article dated 16 December 201, titled "NAR Admits Publishing Bad Existing Sales Data" he states "Lawrence Yun, chief economist at the NAR, explained that the association used the Multiple Listing Service (MLS) to track existing home sales. However, he pointed out that the MLS database is limited to data from sales listed by realtors only. Sales of homes listed by owners are excluded from the database, and so the MLS only provides a narrow view of real estate markets. He also pointed out that because the majority of homeowners use realtors, sales figures for realtor listed homes became artificially inflated."
Who is Yun kidding when he says "so the MLS only provides a narrow view of real estate markets"...we are the market! Don't roughly 80% of all sales go thru MLS and for sale by owners account for only 20% (if that)? Mr. Wheatley then goes on to apparently quote Mr. Yun as saying "because the majority of homeowners use realtors, sales figures for realtor listed homes became artificially inflated." What does that even mean? At the least it contradicts the sentence just above…Yun needs to go, join the ranks of the unemployed and start to collect new statistics about the U.S. workforce that he can supply to Congress.
Wow what a shock!! The NAR producing bad data?? Who would have suspected that? LOL. The only ones surprised by this finding is the NAR themselves, who live in real estate "La-La land". Kudos to Core-Logic for pointing out the error. After the NAR's high profile failure to predict the housing crisis, why does anyone pay attention to their data?
Hi Donna! Thanks for your comments 😉