After the National Association of Realtors (NAR) announced that it had to
revise existing home sales data due to a formula miscalculation the NAR
released revised data showing close to 15 percent differences from previously
reported numbers. Despite the downwardly revised benchmarks, the month-to-month
characterizations and home price data points remained the same.
The 2010 revision shows there were 4,190,000 existing-home sales last year, a
14.6 percent drop from the previously projected 4,908,000 sales. For the total
period of 2007 through 2010, sales and inventory were downwardly revised by 14.3
percent. The group said the revisions are expected to have a minor impact on
future revisions to the United States’ Gross Domestic Product.
“From a consumer’s perspective, only the local market information matters and
there are no changes to local multiple listing service (MLS) data or local
supply-and-demand balance, or to local home prices,” said Lawrence
Yun, chief economist for NAR.
A divergence began in 2007 and developed over time between sales reported by
MLSs and sales determined by a U.S. Census benchmark. The reasons NAR gave for
this divergence included growth in MLS coverage areas from which sales data is
collected and geographic population shifts.
“It appears that about half of the revisions result solely from a decline in
for-sale-by-owners (FSBOs), with more sellers turning to Realtors to market
their homes when the market softened. The FSBO market was overwhelmed during the
housing downturn, and since most FSBOs are not reported in MLSs, national
estimates of existing-home sales began to diverge based on previous
assumptions,” Yun said.
NAR consumer survey data in 2000 showed FSBOs accounted for a 16 percent
market share, which fell to a record low 9 percent in 2010.
“In essence, Realtors began to capture a greater market share. In addition to
a decline in FSBO transactions, more builders began marketing new properties
through real estate brokers that weren’t completely filtered from the
existing-home data,” Yun said. “Some property listings on more than one MLS, and
issues related to house flipping, also contributed to the downward
revisions.”