VOL. 126 | NO. 248 | Wednesday, December 21, 2011
NAR to Revise Home Sales Data
By Sarah Baker
Businesses nationwide are examining their books for the end of the year, and the nation’s largest trade association has its fair share of adjustments as well.
The National Association of Realtors on Wednesday, Dec. 21, will release the revisions to its existing home sales numbers from the last five years. The new figures have some concerned that the nation’s housing crisis could be far worse than previously gauged.
The group said the formula it had been using to adjust the sales data collected by the Multiple Listing Service was inflating sales since the database only includes home sales listed by Realtors. NAR also said some assumptions it used in its calculations were based on 2000 Census data.
NAR announced Tuesday, Dec. 13, its plans to downwardly revise sales of previously owned homes dating back to pre-crash levels in 2007. Mortgage and property data aggregator CoreLogic estimated in February that NAR was miscalculating existing inventory by as much as 20 percent.
Known as “The Voice for Real Estate,” NAR’s home sales data are a significant, macro-level economic indicator and resource for executives, economists and policymakers alike.
But NAR stressed that its revision of its national statistics should have little impact on local market data, and Memphis Area Association of Realtors executive director Melanie Blakeney agreed.
“The national benchmarking has no impact on the local numbers,” Blakeney said. “MAARdata, which is for Shelby, Fayette and Tipton counties, includes all sales, not just those by Realtors. So when you look at both the MLS numbers and the MAARdata numbers, you could (get) a pretty complete picture.”
NAR’s chief economist Lawrence Yun told CNNMoney as part of the Dec. 13 announcement that “for the real estate businesses, this means the housing market’s downturn is deeper than what was initially thought.”
But to Carol Lott, MAAR 2012 president and broker with Prudential Collins-Maury Realtors Inc., that statement is not completely accurate.
“Even though the revisions will show fewer homes changed hands than NAR had previously reported, there will be little change in previously reported trends in home sales, and no change in median home price per NAR,” Lott said.
One positive sign of the current housing industry, Lott noted, was that NAR attributed the biggest reason for the revision is a decline in for-sale-by-owner home sales.
“(Yun) believes more sellers are turning to real estate agents giving Realtors more of the market share,” Lott said.
Faulty sales data is not an uncommon concept to MAAR. In July, the 101-year-old local residential real estate trade organization said a software glitch caused flawed housing reports to be released dating back six months.
That’s because in January, instead of tracking Memphis-area home sales based on closing dates like it had done for years, MAAR began tracking home sales based on recorded dates. With this change in reporting, the monthly numbers became inflated, presenting a rosier-than-normal view of the local housing market.
The glitch has since been corrected, and MAAR is busy advocating the importance of the housing industry’s effect on job creation.
“Everything turns on the job climate and consumer confidence,” Blakeney said. “More jobs equal enhanced consumer confidence, which will make for a robust housing market here and across the country.”