National Association of Realtors Revising Existing Home Sales Data

COLLEGE STATION (Real Estate Center) – The National Association of Realtors (NAR) announced this week that it will revise its total existing home sales and unsold inventory data downward by as much as 20 percent.  The Real Estate Center’s housing market expert, Research Economist Dr. Jim Gaines, said the revision is because of sales reporting issues as well as NAR’s internal adjustment process to convert reported MLS sales into total existing home sales.  “NAR extrapolates the reported MLS sales data into estimated total existing home sales based on adjustment factors developed from the 2000 census, which are now outdated,” Gaines said.  “NAR said it wants to avoid double counting duplicate sales records from consolidated MLSs and to better account for shifts in population, fewer for-sale-by-owner sales and other factors. Normally, NAR adjusts the sales based on decennial census results, but the 2010 census did not collect home sales data as previous censuses did. NAR had to find other ways to make adjustments and backdate their results.”  The revision could make the housing bust reported over the past five years look statistically even deeper than originally reported.  “Reported existing home sales during the past five years have been hovering around five million units per year, the lowest sales volume in more than a decade,” Gaines said. “If the pace of sales is significantly lower than initially reported, it may take longer than originally anticipated to clear the so-called ‘shadow inventory.'”  The revisions should have little to no impact on those who use the Center’s sales data, Gaines said.  “The Center only provides sales and listing inventory data as reported by each MLS with no overall adjustments,” he said. “Consolidation of many of the larger MLS services some years ago eliminated most of the duplication problems and other reporting issues associated with the NAR database. The Center also scrubs the reported sales data to eliminate possible duplicates, so the sales reported by the Center are not total home sales, but rather the volume of sales submitted by the local MLS.”  The revised data, which will be released Dec. 21, will not include the reported number of months of inventory, monthly percentage changes or home prices. These data are expected to remain the same regardless of the sales and inventory or inventory adjustments.