Wednesday - December 14, 2011

Truly Unexpected News

Son of a bitch. I just heard this on Fox News ... I missed it yesterday ...

Data on sales of previously owned homes from 2007 through October this year will be revised down next week because of double counting, indicating a much weaker housing market than previously thought.

The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once and in some instances new home sales were also captured.

“All the sales and inventory data that has been reported since January 2007 is being downwardly revised. Sales were weaker than people thought,” NAR spokesman Walter Malony told Reuters.

“We’re capturing some new home data that should have been filtered out and we also discovered that some properties were being listed in more than one list.”

The benchmark revisions will be published next Wednesday and will not affect house prices.

Realtors: We Overcounted Home Sales for Five Years

... The depressed housing market is one of the key obstacles to strong economic growth and an oversupply of unsold homes on the market continues to stifle the sector.

Malony said the Realtors group had developed a new model that would allow frequent benchmarking instead of waiting 10 years for the population Census data to revise their figures.

There was some hint of this back in February, when an outside group ran the numbers and saw the problem. Looks like they were quickly hushed up ...

[02/15/2011] Decline in real estate sales greater than stated? CoreLogic: NAR methodology appears to inflate home sales by 15-20%

Statistics published by the National Association of Realtors appear to overstate sales of existing homes by 15 to 20 percent, mortgage and property data aggregator CoreLogic says in a new report that concludes home sales fell more sharply last year than previously thought.

A NAR spokesman said the CoreLogic claim “is premature at best,” and NAR will be making some benchmark revisions to its historic sales data later this year.

NAR’s figures—based on data collected from multiple listing services and large brokerages—show sales of existing homes fell 5 percent in 2010, to 4.9 million. But CoreLogic, which collects public sales records from county recorders and courts, estimates that home sales actually fell 12 percent, to 3.6 million.

The implications are not trivial: A slower rate of sales means that it will take longer to burn through unsold inventory, and a glut of homes for sale in a given market can undermine prices. CoreLogic says the unsold inventory on the market in November represented 16 months of supply, compared with NAR’s estimate of 9.5 months.

Weak sales following the expiration of the federal homebuyer tax credits, an excess supply of unsold homes, and the impact of sales of distressed homes is driving home prices down, CoreLogic said. A national, repeat-sales home-price index compiled by the company was down 5.1 percent in November from a year ago.

If that trend continues, national home prices will probably be down 10 percent year-over-year by spring, CoreLogic said.

Yeah that’s right, poo-poo their findings and sweep it under the rug. Nothing to see here, move along.

Let’s ask a simple question: How do you miscount an actual sale? A sale is a sale is a sale, right?  NAR gets its data from the various MLS systems and of course we the general public should trust the professionals and their data, yes?

In point of fact I was called all sorts of names by some of those professionals when I ran down a report sent to me in the fall of 2010 claiming that the MLS data was incorrect on sold price—a key element used when performing market analysis for clients who are interested in both buying and selling. At the time I made the audacious recommendation that nobody should trust Realtor data and should instead insist on a pull of the public records at the County level before performing any real estate transaction.

There was plenty of controversy at the time over the original claim and I spent a lot of time running down the facts, including calls to county tax authorities—and later posted a follow-up later to the original Ticker.

This issue of bad counts of sold homes is, in my opinion, much-more serious, as it’s damn hard to claim this is a result of misunderstanding between an industry professional and a naive client.

Let’s face reality here folks: Counting how many things sold is pretty simple if there’s any sort of verification and integrity in the process, especially when ownership changes are filed with county authorities in public records and thus a spot check should catch any material error almost instantly!

So I must ask—why now, some eight months after Corelogic first raised the issue?  Did it really take eight months to actually.... well..... count?  How many fingers do these people have again?

i am really starting to believe that i live inside the matrix.

Horry Clap.

Oh, and ... I could be wrong, as I’m not a Realtor, but I read on some realty forum that when a bank takes back a house in foreclosure it counts as a sale. Um, no, that’s a load of crap. But if that is part of the current “accounting method”, then even the downwardly revised figures are going to be upwardly inflated. Let’s all just join hands and say it’s time to cut the bullshit. We all already KNOW we’re in the shitter. Stop the lies, and let’s all work together to try and get out of this mess. And Socialism isn’t the answer, Professor Asshat.

PS - if the housing market is and has been 20% worse than admitted for the past 5+ years, what do you think the actual health of Fannie, Freddie, and the rest of the mortgage industry is then?

Posted by Drew458     on 12/14/2011 at 01:32 PM   
Filed Under: • Economics •  
• Comments (4) • Trackbacks(0)  Permalink •  

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