The National Association of Realtors might be over-estimating home sales figures. If it has, the real estate bust was even worse than it seemed and current housing markets may be even worse than believed.
The problem is that NAR’s much-followed home sales numbers just don’t jive with figures from other housing market researchers.
CoreLogic, a real estate research firm in Santa Ana., Calif., stated in its U.S. Housing and Mortgage Trends report for this February: “Although it’s been widely reported that the National Association of Realtors’s (NAR) existing home sales data fell only 5% to 4.9 million in 2010, down from 5.2 million in 2009 and flat relative to 2008, the CoreLogic data indicates otherwise.”
CoreLogic estimated 3.6 million home sales in 2010, a 12 percent decrease from 4.1 million in 2009.
The report goes on: “Historically, the CoreLogic existing sales data have covered about 85% to 90% of all NAR’s existing home sales data. However, in 2006 NAR’s sales data became elevated relative to the CoreLogic, MBA, HMDA and Census sales related data, and that trend has continued and become more pronounced through 2010.”
There could be several reasons for the differences, yet NAR’s existing home sales data are overstated by about 15 to 20 percent, it says. Inflated homes sales would mean that demand for homes is smaller and the inventory is larger than thought.
News and blog articles about the battle of the housing data researchers are not exactly generous to NAR. One blog headline says “CoreLogic Blasts NAR for Overstating Home Sales.”
NAR researchers don’t have time to talk to most bloggers, but it admitted to The Wall Street Journal that it might have over-counted home sales going back to 2007. NAR’s chief economist, Lawrence Yun, told the Journal that its sales figures could be revised downward this summer but mentioned that CoreLogic just might have under-estimated the number of home sales.
According to the Journal, economists from several groups had questioned NAR’s counting methods and had asked the group to look into the issue last December. For instance, a Mortgage Bankers Association economist said NAR’s numbers were out of sync with MBA’s mortgage application figures.
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