We reported to you last week that the National Association of Realtors (NAR) had announced that there had been errors in the assumptions they had used to calculate sales of existing homes, and that they would be releasing revised sales figures for the five-year period from 2007 to 2011 this week.
Today, NAR released the revised figures.
For 2010, the figure for total sales of existing homes was originally estimated as 4,908,000 sales, but has now been revised to 4,190,000 sales - meaning that existing home sales for that year had been overestimated by 14.6%. For the four-year period 2007-2010, sales figures have been revised downward by 14.3%.
Although NAR emphasizes that revisions to the figures over such a long period do not mean changes to the month-by month trends, this substantial downward revision means that the housing “bust” was much worse than the previous figures had suggested.
We explained in last week’s post how these calculation errors occurred, and how NAR’s Chief Economist Lawrence Yun would be revising the calculations by “rebenchmarking.”
From today’s statement by NAR:
A divergence developed over time between sales reported by MLSs and sales determined by a U.S. Census benchmark; the variance began in 2007. Reasons include 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’s statement also released existing-home sales figures for November 2011. Home sales for that month increased by 4.0% over the previous month, and by 12.2% over November 2010 (taking the corrected figures into account).
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