Last week, we discussed data that suggested the NAR has been dramatically overstating home sales and understating stating inventory. I have a much longer piece in the works, tracing how the NAR’s data errors were discovered and by whom — but today’s must read MSM article is in the WSJ:

The National Association of Realtors, which produces a widely watched monthly estimate of sales of previously owned homes, is examining the possibility that it over-counted U.S. home sales dating back as far as 2007.

The group reported that there were 4.9 million sales of previously owned homes in 2010, down 5.7% from 5.2 million in 2009. But CoreLogic, a real-estate analytics firm based in Santa Ana, Calif., counted just 3.3 million homes sales last year, a drop of 10.8% from 3.7 million in 2009. CoreLogic says NAR could have overstated home sales by as much as 20%.

One key correction: The NAR tracking error did not begin in 2007, as the WSJ suggests, but dates bacl to their lst benchmark in 2000.

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Previously:
Is the NAR Overstating RE Sales ? (February 17th, 2011)

Source:
Home Sales Data Doubted
Realtor Group May Have Overstated Number of Existing Houses Sold Since 2007
WSJ, FEBRUARY 22, 2011
http://online.wsj.com/article/SB10001424052748704476604576158452087956150.html

Category: Data Analysis, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

15 Responses to “More Doubts About NAR Home Data”

  1. Irwin Fletcher says:

    I thought you were on vacation. Vacation means getting away.
    This blog will be here when you get back. Go enjoy some R&R.

  2. dimm says:

    calculatedriskblog has reported on that for quite a while

  3. Super-Anon says:

    If things globally start really getting out of hand they may have to shut down the capital markets for an indefinite period of time.

  4. Petey Wheatstraw says:

    BR: Don’t listen to Irwin. Keep ’em coming (w/a margarita in your hand, and your toes in the sand). Just so you know, it’s cold and wet here on the Eastern seaboard.

  5. krice2001 says:

    Petey,
    Just what you said!! Barry – Keep’em coming!

    But as for the “cold and wet” – you must be a little further south than me. Here, it’s just too cold to be “wet”.

  6. curbyourrisk says:

    The only way you can report on these markets is with a margarita in your hand…….

    It is all BULLSHIT anyway.

  7. Brent_in_Aurora says:

    On Calculated Risk, he has looked at the new home sales relative to the existing home sales. There is a big de-linkage, with new home sales plunging while existing home sales have not fallen as fast. He interpreted the data as a delinkage, but it may be that the existing home data is cooked.

    http://cr4re.com/charts/charts.html?New-Home#category=New-Home&chart=DistressingGapDec2010.jpg

  8. NoKidding says:

    Anyone who remembers reading the 2006 powerpoint presentations of David Lereah knows these guys have not been trustworthy for a long time.

    Anyone who’s been paying attention to the birth death adjustment game knows that the BLS has not been trustworthy for a long time.

    Anyone who has read transcripts of the chairman of the Federal Reserve speaking to more than one audience knows …

  9. I think you broke your record for staying away Barry. It’s like you never left! :)

  10. ashpelham2 says:

    thanks Mr Ritholtz, for the very informative piece. You got anymore dramatic sheets to lift off of the economic BS we’ve been getting fed to us for too long now? I’m all for truth and facts. Let’s get it all out there. Sure the NAR has been overstating sales. Most Americans didn’t know it, or care, and still don’t. But those of us who make investments advisory services available to our clients need to know these facts. Let’s don’t bury our head in the sand that you have your feet in today! No offense!

  11. jjay says:

    David Lereah would make a fine Federal Reserve Chairman!
    He is ready to leave the NAR and move to the big leagues!
    He must be a graduate of the Bill Clinton school of obfuscation!

  12. Stuart says:

    The NAR has no further credibility to be lost, like the rating agencies, it’s already been lost. Barry, put Ipad down, pick caesar(s), margarita(s) up… ‘-)

  13. MinnItMan says:

    I used to be able to understand differential equations, and even do them sometimes. But this perplexes me:

    “The group reported that there were 4.9 million sales of previously owned homes in 2010, down 5.7% from 5.2 million in 2009. But CoreLogic, a real-estate analytics firm based in Santa Ana, Calif., counted just 3.3 million homes sales last year, a drop of 10.8% from 3.7 million in 2009. CoreLogic says NAR could have overstated home sales by as much as 20%.”

    I get 48.48 %. Math majors, especially where I studied, say that mere arithmetic is done by slaves. But you still have to check it sometimes, or be able to see when it’s off.

    NAR reports 4.9M for 2010. CoreLogic reports 3.3. Assuming CL is right (assuming), that is a 1.6M difference. 1.6M/3.3M (assuming that’s correct) means an “error” of 48.484848485%, which is actually kinda freaky.

    This is the kind of reporting that makes my head explode. It’s either a number jumble and entirely worthless, or it’s accurate in it’s details, with a really bad (understated) ciphering conclusion. Will somebody tell me I’m wrong, please? Remember, I’m only dealing with the 2010 numbers where the discrepancy potentially shows the 48.48% overstatement. 2009 appears to be a more reasonable 40.54% overstatement.

  14. noahmckinnon says:

    MinnItMan: Your math is correct

  15. socaljoe says:

    Why would anyone believe data published by a source that is not impartial?