Home Sales Slump was 14% Worse Than First Reported, Realtors Say

The number for existing home sales from 2007 through 2010 was revised downward by 14.3 percent in the highly anticipated revision by the National Association of Realtors announced today.
Just for 2010, there were 4,190,000 existing-home sales last year, a 14.6 percent revision downward from the previously projected 4,908,000 sales, the NAR said.
The revisions are expected to have a “minor impact on future revisions to Gross Domestic Product,” the NAR said in a statement.
Nonetheless, perception counts in a five-year housing market depression where positive figures – whether they cover sales, prices or foreclosure filings – are hard to come by.
There is some encourage news in the NAR’s monthly report: The latest monthly data for existing-home sales – completed transactions that include single-family, townhomes, condominiums and co-ops – increased 4.0 percent to a seasonally adjusted annual rate of 4.42 million in November, from 4.25 million in October.
That’s 2.2 percent above the 3.94 million-unit pace in November 2010. However, the revised sales figures for 2007-2010 have grabbed most of the headlines in recent days.
The NAR downplayed the revision’s impact.
“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, NAR chief economist.
The reason for the now-corrected disparity was a divergence that developed over time between sales reported by MLSs and sales determined by a U.S. Census benchmark, the NAR said. The variance began in 2007.
Reasons for the divergence include growth in MLS coverage areas from which sales data is collected, and geographic population shifts.
Yun said that about half of the revisions were from a decline in “for-sale-by-owners” (FSBOs), with more sellers turning to Realtors 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.

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