Wednesday, December 21, 2011

Housing bust worse than reported

The housing bust was worse than previously thought, with fewer homes having sold than was reported, according to the latest data from the National Association of Realtors.

The trade group released revised estimates Wednesday showing 15 percent fewer U.S. homes sold between 2007 and 2010 than it previously reported. The group now says there were 4.2 million sales of existing homes nationwide, down from the previously projected 4.9 million sales.

The trade group's statistics are important because private companies and developers rely on them for future planning. They also can influence public policy. The revisions are expected to have a "minor" impact on future revisions to Gross Domestic Product, NAR said.

The association revised its estimates after other industry groups criticized its methodology. Research group CoreLogic, for example, has said it believed the NAR's numbers were off by as much as 20 percent.

NAR doesn't report actual tallies of home sales. Instead, it makes estimates based on what local Realtors report to them.

NAR said Wednesday that problems arose during the housing bust as sellers turned more to Realtors and away from trying to sell real estate themselves. Some Multiple Listing Services expanded into new areas and some properties were listed on more than one service, resulting in double counting, the group says. Homes marketed as for-sale-by-owner are not reported in the MLS.

"It appears that about half of the revisions result solely from a decline in for-sale-by-owners...," said NAR chief economist Lawrence Yun. "The (for-sale-by-owners) market was overwhelmed by the housing downturn, and since most (for-sale-by-owners) are not reported in the MLS, national estimates of existing-home sales began to diverse based on previous assumptions."

Revisions for sales figures by state will be released Feb. 9, said NAR spokesman Walter Molony.

Kim Walker with the Charlotte Regional Realtor Association, which handles the Carolinas Multiple Listing Services said no revisions are expected for Charlotte-area data.

"From a consumer's viewpoint, only the local market information and MLS data matters," she said. Walker also said that "since there were no changes to local CMLS data or to the local supply-and-demand balance, or to local median prices," that she didn't expect to see metro-area specific revisions.