NAR numbers questioned by CoreLogic
In a recent article about the January housing market report from northwest Arkansas, we at First Arkansas News called into question the accuracy of the National Association of Realtors’ (NAR) interpretation of the housing market reports it releases.
It turns out we’re not the only ones suspicious of what the NAR reports these days. According to a Wall Street Journal article, CoreLogic is suggesting that NAR’s numbers could be off substantially. Who is CoreLogic? A real estate analytics firm in Santa Ana, Calif., that counted 3.3 million sales of existing homes in 2010, down 10.8 percent from 3.7 million sales in 2009. The NAR, meanwhile, reported 4.9 million existing homes sales last year, down 5.7 percent from 5.2 million sales in 2009.
HomeLogic estimates NAR may have overstated its numbers by as much as 20 percent. The NAR responded with the suggestion that CoreLogic may have understated sales. The trade group also promised to look into the possibility that it has overstated sales numbers back to 2007 — those are widely-reported numbers that economists, journalists and a slew of people have relied on to figure out what’s happening with the housing market. Any revisions to the NAR’s data would likely happen this summer, according to the aforementioned Wall Street Journal article.
We’ll keep an eye on things and let CoreLogic and the NAR figure out who is right and who is wrong.
Why mention this? For one thing, it’s more than a bit shocking to realize that national homes sales — which have been bad since 2007 — may actually be worse than we thought. It all comes down to the “months of supply” metric that is thrown around by housing analysts. The NAR says that, nationally, we’re looking at 8.5 months of supply — it’ll take that long to burn through current inventory, in a sense. If CoreLogic is right and the NAR inflated sales by at most 20 percent, then we’re looking at 10 to 11 months of supply. That’s a substantial difference that could weigh on home prices and tells us we’re much further from a recovery than we might think or the NAR would have us believe.
For another, we at First Arkansas News want to assure everyone who reads our housing market reports that we do our best to make sure they are accurate. The NAR states in this FAQ that it takes data from about 40 percent of the multiple listing services (MLS) around the nation, feeds that information into a model that makes a number of assumptions and the spits out a report.
We, meanwhile, take the novel approach of taking hard numbers from MLS systems and simply report those figures without applying any assumptions, relying on the strange art of “seasonally adjusted data” or anything else that might skew the numbers one way or another. In other words, we simply try to count actual sales and report them.
Furthermore, any interpretation of those numbers is done by Arkansas Realtors and economists who shoot straight with the public, shoot straight with the media and who have developed an understanding of local real estate markets from years of hands-on experience.
Any readers that find a flaw in our housing market reporting — or the market reports on which we rely — are invited to let us know. We hope to be accurate, after all.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.