(Of course this isn’t the first time someone caught them, see: NAR: 4% Quarterly Gain is (Oops) Actually a 30% Loss. In retrospect, maybe that wasn’t a one-time mistake at all, but an example of a systematic manipulation of data.)
From the WSJ:
The housing crash may have been more severe than initial estimates have shown.
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%.
While revisions wouldn’t affect reported home-price numbers, they could show that the housing market faces a bigger overhang in inventory, given the weaker demand.
In December, NAR said that it would take 8.1 months to sell some 3.6 million homes listed for sale at the current pace, but the number of months it would take could be even higher if sales are revised down. Any revisions wouldn’t have an impact on homeowners, but it could have consequences for the real-estate industry. Downward revisions would show that “this horrific downturn in the housing market has been even more pronounced than what people thought, and people already thought it was pretty bad,” said Thomas Lawler, an independent housing economist.
A U.S. housing trade association is examining the possibility that the data it releases underestimated the collapse of the housing industry, the Wall Street Journal reported on Monday.
The National Association of Realtors, which issues the monthly existing home sales report that is closely watched by economists and financial markets, may have over-counted home sales dating as far back as 2007, the newspaper said in an article posted to its web site.
NAR’s home sales count was at odds with calculations by CoreLogic, a California real estate analysis firm, according to the report. CoreLogic says NAR could have overstated home sales by as much as 20 percent.
An over-count of home sales may mean that there is a bigger backlog of unsold homes and that it will take longer for the U.S. housing sector to climb out of the deep hole it is already in, dragging on the broader economic recovery.
The “most popular measure” of existing home sales, the National Association of Realtors’ Existing Home Sales, has increasingly overstated home sales for ten years as measured by five other sources, and reached a level in 2010 that is 15 to 20 percent higher than actual sales, according to CoreLogic, which made the charges in its US Housing and Market Trends Report.
CoreLogic reported sales totaled only 3.6 million in 2010, down 12 percent from 2009. By comparison, NAR reported sales fell only 5 percent in 2010 after rising in 2009, and were flat relative to 2008. CoreLogic said sales did not actually rise in 2009.