So the housing downturn is just about over, right? Not so fast! Turns out that the data used by realtors to factor the sales of previously owned U.S. homes all the way from 2007 through October of this year needs to be revised. Turns out the National Association of Realtors, who provide this data, discovered during a benchmarking exercise, that “some” properties were listed more than once. Basically, the NAR overestimated home sales numbers. In some instances, even new home sales numbers were affected. All of this is to say that it’s even worse than we think – which is more or less what we’ve kind of been saying all along, though there wasn’t necessarily data to back it up.
NAR Overestimated Home Sales Numbers
Walter Malony, who is an NAR spokesman, told Reuters that the revised benchmark revisions will be published next Wednesday and will not affect house prices.
I’m not sure how they can determine that last statement as it seems that it will be far and away out of their control. Particularly since so much of this is driven by consumer confidence (in addition to interest rates, regulation and credit supply).
And, to add oil to the fire, this is not the first time the National Association of Realtors was accused of overcounting existing homes sales. CoreLogic, a real estate analysis firm based in California, claimed earlier this year that the NAR had overestimated sales by as much as 20 percent.
The NAR’s response was, essentially, that they would look into it and that any data variances would be “relatively minor.” One of the problems with the NAR’s accounting is that it uses census data that is up to 10 years old, the interval at which they benchmark their data. Based on the apparently high error rate, the NAR has developed a new model that will perform benchmarking on their numbers more frequently.
How this will affect home sales, despite the claims of the National Association of Realtors, remains to be seen. Once the revised numbers come out today we’ll know more, though it may take weeks or months to see the full effects of the change (if there are any).
