Existing Home Sales Debacle, As Larry 'Baghdad-Bob' Yun Confirms Overstatement

Tyler Durden's picture

In what can only be described as completely unsurprising, Larry Yun of the National Association of Realtors (NAR) has admitted, according to CNNMoney, that maybe possibly they overstated, purely by accident, the number of existing homes sales statistic that has formed the cornerstone of his constant corner-turning commentary over the past few years. We have unequivocally challenged the Ph.D.'s claims as fudged and fabricated this year and even the Wall Street Journal, back in February of 2011, saw 'challenges' in the NAR's data when compared to other unbiased sources of the same reality. We can only assume that when Yun explains, in true Baghdad-Bob-style, the adjustments (when they are released on December 21st) that they will be either a signal that the bottom is in for home sales or that from such a low base, things can only get better. From our perspective, they remain irrelevant and untrustworthy with the CoreLogic data seemingly less naturally biased to an organization desperate for a foothold on the glimmering slope back to the American Dream.


From the WSJ's story in Feb 2011, the divergence of sales data is already egregiously overstated during the hey-days, let alone the downturn.

From CNNMoney: Existing home sales to be revised lower

NEW YORK (CNNMoney) -- If you thought the U.S. housing market couldn't get much worse, think again.


Far fewer homes have been sold over the past five years than previously estimated, the National Association of Realtors said Tuesday.


NAR said it plans to downwardly revise sales of previously-owned homes going back to 2007 during the release of its next existing home sales report on Dec. 21.


NAR's existing home sales numbers, released monthly, are a closely followed gauge of the health of the housing market.


While NAR hasn't revealed exactly how big the revision to home sales will be, the agency's chief economist Lawrence Yun said the decrease will be "meaningful."


"For the real estate business, this means the housing market's downturn was deeper than what was initially thought," Yun said.


Yun said the database NAR uses to track existing home sales, the Multiple Listing Service (MLS), has led the real estate agency to over-count existing home sales for several reasons.


The MLS database only includes home sales listed by realtors, and excludes homes listed by owners, providing a very narrow view of the market. And because more people are using realtors to list their homes instead of selling them independently, realtor-listed sales numbers have become artificially inflated, said Yun.


In addition, some of the assumptions NAR used in calculating its data have become outdated, since they were based on 2000 Census data.


The MLS has also been expanding its geographic coverage, so it may have appeared that there were more home sales simply because data from new areas were starting to show up. Also because of this geographic expansion, the system has been double-counting sales of some homes that can be considered part of multiple regions.


"Colorado Springs has their own database, but because the Denver market is nearby they may also list that home in the Denver database, so when the home gets sold, both Denver and Colorado Springs will say sales rose -- so that's genuine double-counting," said Yun.


Yun said NAR realized this upward "shift" in data during its most recent re-benchmarking process this year. With the help of the government, economists and other real estate groups, NAR has now taken these factors into account and will issue revised numbers on Dec. 21 at 10 a.m.


"There are multifaceted reasons why things were drifting upward in our database," said Yun. "We have tried to adjust for all these factors so that we have a better understanding of total home sales in America."

Yun emphasized that the revisions will have no impact on consumers because median home price data will not be revised.

Existing Home Sales (NSA) have shown a remarkably stable average over the past four years (that the downward revisions will impact). We can only wonder how these data changes will affect models of MBS prepayment speeds (among other variables) as very different months-of-supply data must change the picture that has been painted for the last few years.



We can only assume that when Yun explains, in true Baghdad-Bob-style, the adjustments (when they are released on December 21st) that they will be either a signal that the bottom is in for home sales or that from such a low base, things can only get better. From our perspective, the NAR data remain irrelevant and untrustworthy with the CoreLogic data seemingly less naturally biased to an organization desperate for a foothold on the glimmering slope back to the American Dream.

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Real Money Wins's picture

And the lies just keep on rolling! Just like a bad movie!

This could make a good remake of the game of CLUE!

FEDbuster's picture

Just keeping pace with the Bureau of Labor Statistics. 

Remember to these people "1984" is the playbook.

redpill's picture

It's a mix of obvious bias and incompetence.  They baselined their figures in 2004 based upon existing home transactions from the 2000 Census.  Basically they massage the figures to take into account transactions that occur outside of MLS.  Needless to say, during the housing bust people were so desperate to sell their homes, every home for sale would have been on MLS (unlike the boom years where "pocket listings" were commonplace).  So the raw MLS numbers that were only expanded for coverage purposes were likely more accurate on their own, but they statistically massaged them upward anyway "just like they had always done" without paying attention (potentially willfully) to the obvious sea change in the housing market.  And I only mention the possibility of incompetence since they would have to know this would eventually come to light and ruin their credibility.  If they did it anyway, they are incompetent, if they didn't, they were even more incompetent.



At some point, the truth always comes out. Just in today's world, it is usually after the house of cards has fallen. 

pavman's picture

That's funny.  A house I looked at that needed work is back on the market.  Looks like the new owners updated the kitchen, which had no cabinets when I looked at it, and possibly the bathrooms.  Original price: $309,900...(10/21/2010) ... bottom price: $235,500 (07/19/2011) ... Today's new listing price: $385,500.  So $20k of cabinetry in 5 months is worth $150K in sales price?  Wow, I hadn't realized wood was inflating that quickly!

Guess I should have bought the place, could have made a cool $130K in 5 months!  Or could have extended and pretended and re-listed.  I doubt it'll move for that price in that area, even if the kitchen no longer looks like crap.

Temporalist's picture

Maybe they looked at "comps" (comps being another way to say "other pieces of shit").


Look we paid $200 to seal your driveway...that ought to add at least $2500 to the asking price!  Hey why don't we paint the walls for $1000?  That'll add at least $14,000 to the value!  That $6000 blue granite countertop...an extra $34k to the asking price!


See it's still easy to make money in real estate...just need to find another sucker.

Comay Mierda's picture

These clowns are full of shit. The real world decline in price is more than double what they state, some areas its triple. Now you have all these scam artists aka real estate agents convincing people to buy now cuz "prices have bottomed" and interest rates are low.

What do you think will happen when interest rates spike, scammers? What about the shadow inventory of 8 million homes that haven't even been foreclosed on? wait til commodity prices like oil and food start to go through the roof, too. Housing is FAR from bottom. And the scammers say people like me are crazy for having common sense

TruthInSunshine's picture

I'm convinced that we're living in some real world version of a perverted Matrix, where the primary goal of governmental, NGOs & private companies and trade groups is singularly to say and/or publish anything, no matter how abusive of reality and facts the statements and publications are, to bolster confidence in the economic, political and regulatory systems, so as to be able to buy time (hoping for some real and positive data to emerge) or simply marginalize, to as great a degree as is possible, the awakening of the sheeple to their new reality.

Home sales, auto sales, retail sales (generally), inflation, unemployment/underemployment, true government debt/deficit levels, etc. etc. etc. - all dramatically butchered, with the goal of either creating false CONfidence or preventing the erosion of even more confidence than would take place if the truth was merely acknowledged in print.

greensnacks's picture

But isn't false confidence better than an over productive printing press? or gawd forbid, consumers stop buying worthless crap and start living like the rest of the world.

And it's only going to get worse. In California, they missed their budget projections and are about to gut another billion out of their economy. Come 2013, the Federal budgets automatic cuts are going to hit. I know a family that has not made a payment on their mortgage in 2 1/2 years. Who really knows how much zombie housing inventory still sits on banks balance sheets? Throw in Europe and Japan? maybe another war in the middle east? An overstated housing market will be the least of anyones concern.



Michael's picture

If those people live in that house for another 19 1/2 years without paying a dime, they can claim the house and the land as their own for free.

Squatters rights.

At least squatters rights, with its 21 year limit, will put a limit on the entire housing charade. 

Michael's picture

The Chinese housing bubble is bursting.

Once a mega ginormous housing bubble of biblical proportions starts to burst, there is nothing in the known universe that can stop the bursting.

redpill's picture

MAYBE 42.  Or a towel.

Bicycle Repairman's picture

The banks will show up in year 20 and thank the squatters for their stewardship.

FreeNewEnergy's picture

They probably can claim it - if they continue paying taxes - in less time than that, either by filing for quiet title or making a xase for adverse possession, which, here in NY, is 10 years.

I'm in a similar situation, with 2 1/2 years in on a house that I inherited and no bank currently after the property. BofA backed off a foreclosure filing of nearly 2 years ago due to faulty paperwork (robosigned assignment) and the NY courts' demands for lawyers to verify plaintiff claims. They're, in a word, toast.

Keep the taxes paid and the property in good shape and you can maybe sell it in a few years, or, better yet, once Fannie and Freddie completely implode, a HELOC could be in your future.

kridkrid's picture

Totally agree... see my avatar.  There is an author Steven Lukes who talk about 3 dimensions of power.  I think that Noam Chomsky provides much of the same critique.  The matrix is one way of looking at it... I think of it as a controlled consciousness created for us.  A whole series of boxes into which we can thoughtless herd ourselves.  I think the single best example is the false choice provided to us through our two party system.  But there are even larger concepts that are equally misleading and ultimately herding.  Every "ism" is a box and every box destroys critical thought.  But people are fully invested in them, "political scientists" teach them, our television preaches them and it all becomes very real over time.  You can go up another step and look at religion, but anyone who has one isn't terribly interested in that discussion.

Fudging of the statistics is more a part of the second dimension.  It's more observable.  It's the 3rd dimension that is more matrix like.  It has more to with the crafting of our consciousness, either deliberately, or by a series of randomness, but the net result is still the same... a bunch of people plugged in.


MachoMan's picture

In politics, the goal is to force your opponents (everyone not in the club) into binary decisions, each of which benefit you (but you may still have a preference for which choice is ultimately "chosen").  Political aptitude is simply your ability to politic.  Once politics becomes an institution, then political actors move into other areas of prospective control and repeat the same concept.  On a long enough timeline, the ability to choose to act has been taken...  given all practical choices benefit the politically entrenched.

JPM Hater001's picture

Come on.  It was an honest mistake made by honest people in an honest reporting of the honest...

Ok, I cant do it.

Burn mother f*&*#$er.

Problem Is's picture

I didn't know you read ZH for material there, Harry Shearer...

johnu78's picture

It's like "Wag the Dog" meets "The Other Israel". :(




navy62802's picture

Like a fucking B flick horror show.

JPM Hater001's picture

Um.  No.  B movies still have a happy ending.  This is not done ending very poorly.  That makes it a Kevin Costner film.

DaveyJones's picture

and just like a Costner flick, the least talented guy makes the most money

johngaltfla's picture

When Yun shows up live on Bubblevision to discuss the "revisions" it will be worth a 6 pack and bag of popcorn. I just wonder if they are going to back out the foreclosure sales BACK to the banksters from their numbers or just gloss those over in the "revisions" also....

Pinch's picture

If you want to see lies, look into what's happening in Australia. The Real Estate Institute of Australia (REIA) and its running dogs are constantly touting price increases around the corner, recovery imminent, now's a good time to buy, and all the rest of the usual cr@p. The bubble is only starting to burst here.

GenXer's picture

But Australia is different. They have golden beaches, and housing shortages and house prices approaching 10 x the average salary. The only way is up for the aussie market, it will be double in 5 years! Invest now or miss out....(Now that is Baghdad Bob)

dow2000's picture

Remember that 134.5 BILLION in Kennedy Bonds confiscated at the Italian/Swiss Border in 2009? On November 23, 2011, the clouds parted. A vast, 111-page legal complaint was filed in the United States District Court for the Southern District of New York . Its very off topic but an old story is gaining new traction over the last couple weeks on several other "fringe" sites.  Time for the best one to put out the expose, it has HUGE negative implications for the TPTB...TYLER please try and cover this story!

Check links below for details:


and a supporting tell all interview here: 

Iwanttoknow's picture

Dow 2000,

I may be afool.lately i've begun to believe Benjamin Fulford.Thanks for spreading the word.

Buck Johnson's picture

What a shock, a shock.  I had a sneaky suspicion that these housing numbers where being manipulated from the time of the meltdown but I didn't know it was that much and over the course of this many years.  You mean to tell me that nobody bothered to check.

bob_dabolina's picture

What a bunch of cocksuckers

sabra1's picture

i'm 100% confident, that he dow will do the right thing, and adjust the true value of the markets, concerning this, this fraud! OH MY GWARSH! WHERE DOES IT END? TELL ME, TELL ME, I SAY!!!!!

Jumbotron's picture

It really does beg the question....have we reached exponential, if not geometric, growth in lies? 

And how many more lies have to be revealed and added to the mix before the whole thing collapses?

My God.

Outlaw Of The Wasteland's picture

a commie chink.........why not?

complete and utter infiltration guised as "diversity"

GenXer's picture

Of Course Corzine didn't know what was going on. That is why Biden and Obama make the first call to him when things go wrong with the economy "...because John knows what to do"

DormRoom's picture

There's something wrong in the system, if sets of revised data from BLS, and elsewhere are frequently > 2 std.



The Deleuzian's picture

Regardless of all of the 'bottom callers'...Residential housing has so much more to go down!!  the more they mess with it, the longer it takes and the larger the drop...Period!!!!

Blorf's picture

So they are taking a cue from BLS bureaucrats?  If the sales numbers suck, just change the definition of a sale!


Given up looking for a job?  Congratulations, you're no longer unemployed!

Given up trying to sell your house?  Awesome, let's remove it from the available inventory!

Are you doing census work/holiday sales for a few weeks to avoid starvation?  Congratulations on the new career!

Is the bank paying your mortgage to avoid taking a loss on the balance sheet for the loan?  It's a win-win!


We need a 3x ETF for lies and rumors.

Al Huxley's picture

+10000. If Japan can change the definition of GDP to boost it by 2%, why not just change the definition of 'home sale' and make the numbers better. After all, reality doesn't matter, its the numbers that count, right? Fuckheads, all of them.

Triple A's picture

I know of several people living in their homes without paying their mortgage. I'm talking like 700,000 up to several million dollar homes. Soooo many people are doing the same thing and if it were not the case the economy would be way more fucked.

J 457's picture

'living in their homes."  Their homes?  Its the banks home, they are just squatters.  And now the taxpayer is paying their mortgage for them every time Ben buys a MBS and tosses it over to FNM to launder clean.  Free market- kick the deadbeats out ASAP w/o eviction notice.  Then we've got free market.  Break up the big five banks while you're at it. 

BidnessMan's picture

Issuing an Eviction Notice would kill "Extend and Pretend" - meaning the Lender would have to admit the mortgage is in default.  Would break the banks, which the Fed is never going to allow.  Keeping banks from ever going bust is the original and primary mission of the Fed.  Why they are buying up MBS.  

Also note that once the lender takes over the property, in Florida at least the lender becomes liable for the prior six months of overdue condo or association dues, plus all condo and assocaition dues going forward.  So there is a huge "shadow" backlog of foreclosures that Banks are avoiding.  In Judicial foreclosure states like Florida, the court system is overwhelmed.  Florida had a Linda Green foreclosure "Rocket Docket" for a while, but that ran out of funding, and the Florida legislature refused to extend it.  Court budgets have been whacked, so the foreclosure timeline is rapidly extending.  The "strategic defaulters" recognize all this.  Their credit rating gets whacked, but apparently for many an acceptable trade-off for free housing for years.  

There will have to be some kind of debt 'Jubilee' restart at some point - explicit or de facto - because all the debt can't possibly be repaid.  Mathematically impossible.  But in the meantime, people who actually pay their mortgage are effectively chumps.  Life certainly is not "fair".  But get over it.  The system is terminally corrupt.  The average guy sees that no banker has done a perp walk over any of this.  Anthony Mozillo takes $500M+ less a $22M fine, and walks.  MFGlobal takes $1B+ of customer money and it seems to be de facto okay despite some congressional hearing drama.  Compared to all that, "strategic defaulting" is no more of a moral problem.  And I say that as a chump who is still paying his mortgage.  

Actually, if everyone stopped paying their mortgage, it would accelerate the inevitable reset.  So maybe the "strategic defaulters" are doing us all a favor, and the problem is people who are still paying their mortgage and perpetuating the "extend and pretend".      

navy62802's picture

The only comment about how large the revisions will be is that they will be "meaningful." This is going to be quite a shit show. Hell, it already is.

RockyRacoon's picture

Yet another lie perpetrated by liars.  Alert the press.  Big news.  Yawn.

Wake me up when the big turds start hitting the fan.

This thing is unraveling nicely.  Not just housing -- I mean the whole shebang.   Lovin' it.

Al Huxley's picture

Western civilization sails slowly down the river toward Niagara Falls, while the majority worry about whether or not they PVR'd GLEE tonight. Gonna be a lot of really surprised, really unhappy people sometime in the next couple of years.

DaveyJones's picture

at least we beat them to it, that really unhappy part

pine_marten's picture

Now that there is funny Davey!  Ignorance is bliss was never a truer statement.

Tom Servo's picture

NIAGRA FALLS! Slowly I turn. Step by step. Inch by Inch.

Cathartes Aura's picture

A total eclipse arrives now and Niagara Falls
No loss of blood yet and no further calls