From NAR, a lump of statistical coal

By: Deon Roberts, editor//December 16, 2011//

From NAR, a lump of statistical coal

By: Deon Roberts, editor//December 16, 2011//

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The National Association of Realtors and its members have probably helped Tylenol sales since the Great Recession.

Indeed, over the past few years, there’s lots of pain that needed numbing if you’ve been a Realtor.

As if things weren’t bad enough, NAR has another reason to reach for bottles sealed with cotton (or corks). In a revelation that could make some question the trustworthiness of NAR’s figures and sully its reputation forever – OK, maybe that’s going a bit too far – the association this week announced that its home sales data going back about five years might be too high.

According to news reports, NAR said it plans to downwardly adjust figures of previously sold U.S. homes beginning with 2007, right around the time the housing bubble popped.

What NAR is saying, sort of, is this: You know how housing sales have been down the past five or so years? Yeah … it’s worse than we thought.

Apparently, California-based data company CoreLogic expressed doubts about NAR’s home sales stats earlier this year, saying NAR’s 2010 numbers had been overstated by 15 percent at the very least. Now, NAR’s come out and admitted the numbers were inflated.

“For the real estate business, this means the housing market’s downturn was deeper than what was initially thought,” Lawrence Yun, NAR’s chief economist, has been quoted by the media as saying.

According to Yun, the Multiple Listing Service, which NAR uses to track existing-home sales, led the association to over-count sales. The MLS only tracks sales that are listed by Realtors and excludes by-owner sales. Since more sellers are using Realtors to market their homes, sales figures for Realtor-listed homes have become artificially inflated, Yun said.

Also, the MLS has been double-counting sales of some homes that fall into multiple regions.

But those aren’t the only reasons the numbers are apparently screwed up.

Since 2000, there have been changes in the way the Census Bureau collects data, but NAR’s methods of calculating do not reflect those changes, according to news reports.

Surprisingly, as of Wednesday afternoon, NAR’s website appeared to not have a single press release on the inaccurate numbers. It’s most recent release, dated Dec. 9, was on a survey that “finds that jobs and the housing market will be two of the most important issues for voters in the 2012 election.”

My most important issue for the 2012 election is “What are we doing to prepare for the end of the world on Dec. 21, 2012?” But that’s probably just because I’ve already got a job and a house.

Yun says NAR’s adjustment of the sales figures will be “meaningful,” which I guess is his way of saying “big.” At this point, that’s about all we commoners know about the revision.

For those who feel the need to depress themselves with even more grim news about the housing market, the revised report is due out Wednesday, just in time for Christmas, Hannukah and Kwanzaa.

Of course, I have no right to criticize anyone else for bad math. Ask me to balance your checkbook and you’re asking for trouble, which is why my wife knows better than to hand over that responsibility to me.

But there’s an upside, according to Yun: The revisions won’t impact consumers, because there won’t be changes to median home price data.

By the way, according to NAR’s website, it’s membership was 1.1 million in 2009. But last year it had 1.06 million members in 2010 … give or take 500,000.

That last part was a joke.

ROBERTS can be reached at [email protected].

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