Years of Existing-Home Sales Overestimated

December 14, 2011

Mistakes revealed this week show that the housing market is in even worse condition than we thought.

The National Association of REALTORS® has announced that data on sales of existing homes over the past five years is wrong.

It appears that from 2007 through October of this year, some homes sold were counted more than once and some new-home sales were inadvertently included in the numbers.

“All the sales and inventory data that has been reported since January 2007 is being downwardly revised. Sales were weaker than people thought,” NAR spokesman Walter Malony told Reuters.

“We’re capturing some new home data that should have been filtered out and we also discovered that some properties were being listed in more than one list.”

The Chicago real estate market is no stranger to inflated numbers. Over the summer, the Illinois Association of REALTORS® found a computer glitch had overestimated the median sale prices of homes sold in Chicago from November 2010 through May 2011.

Of this current NAR error, the REALTOR group said the “up-drift in sales projections developed over time between the fixed model for calculating sales rates and the actual marketplace, including growth in multiple listing service coverage areas, geographic population shifts, a decline in for-sale-by-owner transactions, some new-home sales trickling into MLS data and some individual sales being recorded in more than one MLS.”

The NAR revisions will be released on December 21. Homeowners should not be affected by the new numbers — except maybe in spirit — as home inventory and median home price data will not change as a result of the errors.

Categories: Economy

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