Massive Downward Revisions Imminent: National Association of Realtors Miscounted Millions Of Home Sales Over Last Five Years
Just when you thought you could trust the National Association of Realtors, a new shocking report from the NAR itself says that they have miscounted the amount of existing homes that were sold for the last five years.
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 have been reported since January 2007 are 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.”
While NAR hasn’t revealed exactly how big the revision to home sales will be, the agency’s chief economist Lawrence Yun said the decrease will be “meaningful.”
“For the real estate business, this means the housing market’s downturn was deeper than what was initially thought,” Yun said.
California-based analysis firm CoreLogic claimed earlier this year that the NAR may have misrepresented sales numbers by as much as 20%. It turns out CoreLogic was right. The NAR has now admitted that they made a mistake in how their data were counted. In the last twelve months 4.9 million homes were sold in the U.S. Over five years we’re looking at around 20 million homes, which suggests that the NAR’s “mistake,” if CoreLogic’s estimates are correct, may involve up to4 million home sales that never happened or were double counted.
While NAR’s mistake may deserve the benefit of the doubt, given what has transpired in the financial, economic and real estate sectors we’d be remiss if we didn’t mention that NAR’s realtors, mortgage lenders, and banks likely benefited from such a massive padding of the numbers. Off by a few thousand? OK, we’ll give that to you. Off by several million? That suggests this was no mistake at all, but rather, an intentional fraudulent act designed to keep optimism up, home prices up, and revenues coming in to sales agents and the NAR itself.
The NAR’s data have been, in part, used as evidence of economic recovery. We now learn that the numbers are pure conjecture.
There’s no reason for concern, however. Even though home prices undoubtedly benefited from the false perception that millions of homes were being sold and the market was bouncing back, Reuters reports that this latest revelation will have no negative impact on the market.
“The benchmark revisions will be published next Wednesday and will not affect house prices.”
We were worried there for a minute, but apparently there’s nothing to see here and we can just move along.
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Date: December 14th, 2011
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