realtors admit they blew it, revised data coming 12-21

The NAr finally came clean and admitted they misreported housing sales data for the last 5 years.

Home Address … 3492 PECAN St Irvine, CA 92606

Asking Price ……. $599,000

The National Association of realtors has a credibility problem. Everyone already distrusts them because the sales techniques they advocate rely on falsehood and manipulation to cajole buyers into closing deals. But their problems go deeper than that. The association provides market data which purportedly is objective, but it certainly appears as if they manipulate this data to make the market look stronger than it is. Is this an “honest” mistake? Back in February I noted that the National Association of realtors caught lying about home sales. I contended that “The NAr wanted to dupe buyers into thinking the market was stable to induce transactions that never would have gone through if buyers had known the truth.” Perhaps they were nefarious and just incompetent. Neither alternative speaks highly of them.

Published: Tuesday, 13 Dec 2011 | 5:21 PM ET

Data on sales of previously owned U.S. homes from 2007 through October this year will be revised down next week because of double counting, indicating a much weaker housing market than previously thought. The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once, and in some instances, new home sales were also captured.”All the sales and inventory data that have been reported since January 2007 are being downwardly revised. Sales were weaker than people thought,” NAR spokesman Walter Malony told Reuters.

Are they also retracting all their bullish — and completely erroneous — statements over the last few years based on their incorrect data? Are they offering refunds to the buyers who believed their false data and relied on it to make a buying decision? What responsibility do they bear for the decisions they induced others to make?

“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 benchmark revisions will be published next Wednesday and will not affect house prices.Early this year, the Realtors group was accused of overcounting existing homes sales, with California-based real estate analysis firm CoreLogic claiming sales could have been overstated by as much as 20 percent. At the time, the NAR said it was consulting with a range of experts to determine whether there was a drift in its monthly existing home sales data and that any drift would be “relatively minor.”

Relatively minor? They blew their counts by 10% to 20%, and they consider that relatively minor? They could have pulled numbers out of the air and done a better job.

The depressed housing market is one of the key obstacles to strong economic growth and an oversupply of unsold homes on the market continues to stifle the sector. Malony said the Realtors group had developed a new model that would allow frequent benchmarking instead of waiting 10 years for the population Census data to revise their figures.

I don't care if they benchmark their data daily, they simply can't be trusted to do it right. The temptation to fudge the numbers to pump the market is just too great. Calculated Risk did a recent post on this issue, Lawler on NAR Revisions for 2007 through 2011.

From economist Tom Lawler: NAR to Release Existing Home Sales Revisions this Month The National Association of Realtors yesterday sent out a media advisory [announcing] that it would release its benchmark revisions to its existing home sales estimates on December 21st. Here is what the NAR sent out:

Although there are downward revisions for total sales in recent years, there is little change to previously reported monthly comparisons or characterizations based on percentage change. There is a comparable downward revision to unsold inventory, so there is no change to relative month’s supply. Also, there is no change to median home prices. An 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. Divergence of the data with other housing data metrics began in 2007, so revisions for 2007 through the present will be released. Normal annual revisions will be released with January existing-home sales on February 22, 2012. Those revisions are expected to be minor and will fine-tune the data back though 2007.

While the NAR did not hint at the magnitude of the downward revisions, the “consensus” is that 2010 existing home sales will be revised downward by about 13% or so (yup, there’s a “consensus” for everything!). … Many analysts were hoping that the NAR’s new methodology would be based on publicly recorded transactions, and apparently the NAR’s staff actually did explore this avenue. Rumor has it, however, that the new “benchmark” revisions will NOT be based on publicly recorded transactions – in part, apparently, because data coverage in many states is not comprehensive; data quality in many states/counties is poor; AND there are disparities among various private vendor estimates of sales based on publicly-recorded transactions. … Any approach, however, will result in a material reduction in estimated sales over the last few years – though the result will still be estimates and not actuals. CR Note: This was from economist Tom Lawler.

I don't buy their argument that the data cannot be based on public information. They could use the data available and extrapolate from that. If their baseline is better, their estimates will improve. I don't see how they could possible do worse; after all, they are off by more than 10% with their current methodology.


This property is available for sale via the MLS.

Please contact Shevy Akason, #01836707


Home Address … 3492 PECAN St Irvine, CA 92606

Asking Price ……. $599,000

Beds: 3

Baths: 2

Sq. Ft.: 2639


Property Type: Residential, Single Family

Style: Two Level, Contemporary

Year Built: 1974

Community: Walnut

County: Orange

MLS#: P805415

Source: CRMLS

Status: Active

On Redfin: 7 days


2 story home features 3 bds and 3 bths. 2 car garage. Empty swimming pool may not functional. Need LOTS OF repairs inside and out.


Proprietary commentary and analysis

Asking Price ……. $599,000

Purchase Price … $199,000

Purchase Date …. 9/22/1995

Net Gain (Loss) ………. $364,060

Percent Change ………. 182.9%

Annual Appreciation … 6.7%

Cost of Home Ownership


$599,000 ………. Asking Price

$119,800 ………. 20% Down Conventional

4.02% …………… Mortgage Interest Rate

$479,200 ………. 30-Year Mortgage

$115,480 ………. Income Requirement

$2,293 ………. Monthly Mortgage Payment

$519 ………. Property Tax (@1.04%)

$0 ………. Special Taxes and Levies (Mello Roos)

$125 ………. Homeowners Insurance (@ 0.25%)

$0 ………. Private Mortgage Insurance

$46 ………. Homeowners Association Fees


$2,983 ………. Monthly Cash Outlays

-$372 ………. Tax Savings (% of Interest and Property Tax)

-$688 ………. Equity Hidden in Payment (Amortization)

$168 ………. Lost Income to Down Payment (net of taxes)

$95 ………. Maintenance and Replacement Reserves


$2,186 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$5,990 ………. Furnishing and Move In @1%

$5,990 ………. Closing Costs @1%

$4,792 ………. Interest Points

$119,800 ………. Down Payment


$136,572 ………. Total Cash Costs

$33,500 ………… Emergency Cash Reserves


$170,072 ………. Total Savings Needed


7 thoughts on “realtors admit they blew it, revised data coming 12-21

  1. wheresthebeef

    600K for a house that the agent even admits needs LOTS of repairs inside and out. Planet Reality this is your chance to jump on another prime Irvine house below rental partiy, I don’t think your tenants will care about the empty pool!!!

    Bwahahaaha. We still have a way to go folks. I wonder if the OCAR condemns the actions of the NAR, essentially cooking the books and doing some Lehman Brothers style accounting to make a turd look like a gold nugget. I wouldn’t trust David Lereah or Lawrence Yun further than I could throw them!

    1. Casual Observer

      @where….here’s the food chain….OCAR sends it’s data to CAR….CAR sends it to NAR

      Not positive about current policy, but CAR used to only count SFD properties, ignored condos. So much for medians.

  2. Todd S.

    I found this blog post yesterday:

    An agent lists this house as, “Short Sale. Property is in poor condition. Needs repairs. Sold as is, seller will not pay for repairs, termite or buyers closing costs” and it sells for $270k on 10/21/11.

    The same agent then lists it 11/19/11 for $439,900, describing it as, “Once in a life time opportunity! Santa Barbara style beauty with a 180 degree panoramic view lot of almost 30,000 sf.”

    There are links to both listings in that blog post.

    From the post: “This looks like a perfect example of short sale fraud. He lists the property indicating it’s a dog, gets it cheap and then turns if for a quick profit. And of course the lender takes a bigger loss than they otherwise would have.”

    Is this sort of thing becoming commonplace? I keep seeing houses on Redfin that show as “pending” the day that they are listed and they are listed as being short sales. Something seems fishy about that to me.

    1. Casual Observer

      If it looks like a duck, quacks like a duck, it’s probably not a rare South American parrot.

      Worse yet, it becomes it’s own comp for an appraiser.

  3. wheresthebeef

    That could likely be fraud. However, there was a month between the previous sale and the new listing. Maybe someone did a really quick flip job on this thing. The 439K is a listing price…how close to the market price is that?

Comments are closed.