US Housing Market Was Artificially Inflated By 14% In 2007-2010 NAR Reports

Tyler Durden's picture

Just the headlines for now:


Thank you NAR for proving what everyone knew: that the US housing market is one big lie. And next: here come the historical GDP revisions.

The three charts that matter:

And the reasons for the "rebenchmarking"

  • Fewer FSBO home sales and more REALTOR®-assisted home sales (e.g., no net increase in home sales in a case where 80 MLS sales and 20 FSBOs shifts to 90 MLS sales and 10 FSBOs)
  • More Homebuilders seek REALTOR®-assistance in listing properties on MLSs (More MLS count even though there is no increase in existing home sales)
  • Flipping of a home (re-sell within 12 months)
    • Re-benchmarked figure excludes the second sale, while they are counted as twice in MLS count
  • Enlarged MLS geographic coverage
    • Some of the home sales are not an increase in home sales but are just due to enlarged sampled areas
  • Double counting as one single property is listed in two or more MLSs
    • Example: a home in Colorado Springs is listed in MLS in Colorado Springs and is also listed in MLS in Denver.

Odd: no mention of the primary reason for the "rebenchmarking", namely that the NAR is nothing but an advertising front for the US housing industry.


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Bodhi's picture

Seriously, what a bunch of dicks.

Manthong's picture

No big deal..

The government can make up for all of that with new Section 8 subsidized units.

I hear FEMA needs new gated communities, too. 

Pladizow's picture

"Housing is one big lie" ?????

America is one big lie!

Reality has been Hyper-Hypothecated!

hedgeless_horseman's picture



Economic forecasts are one big lie.

Read this:

nope-1004's picture

Anybody that's ever dealt with a realtor knows they are full of shit.  If lies are generated from the head of the organization, then the entire thing is rotten.

Commissioned sales people have no skin in the game.  They tax every transaction and it is totally unnecessary.


Alcoholic Native American's picture

During the boom the houses were selling themselves.  I never did get why they were getting a cut.

GeneMarchbanks's picture

So America could employ retarded people.

redpill's picture

The revision wasn't large enough, they are still overstating.  I wouldn't be surprised to see some additional "stealth" revisions in future releases that pares the numbers back further.


Bicycle Repairman's picture

When you consider the numerous, important "headwinds" facing housing you'll realize except for certain specific, small areas (including the inevitable government subsidized areas), housing will not recover for a generation.

Tune NAR out.  Or pay the consequences.

Divided States of America's picture

Nice, it took them 4 years to figure this out. Also, at least we know now that the S&P500 is probably at least 15% overvalued here as well but not sure when people will come to this realization.

Precious's picture

The National Association of Realtors should be prosecuted under the RICO Act. 

Careless Whisper's picture


Their job was to create a bidding war. 

PulauHantu29's picture

Perkin's book was an eye opener for me. Clear an dconcise and very descriptive.

Another excellent read is anyhting by Greider but this is a favorite:

Secrets of the Temple: How the Federal Reserve Runs the Country [Paperback]


TruthInSunshine's picture

INFORMAL & ANECDOTAL PART (skip this is you're not into anecdotes): So, along this theme (the NAR scam), I'm out shopping for a few last minute things and noticed that the stores are, without a scintilla of a doubt the LEAST crowded I've ever seen.

I hate shopping. It's a guy thing. I mean, I REALLY hate it. But there I am, every year around Christmas, fighting the traffic and all those headaches and bullshit, because one can't be a total jerk and not buy gifts for people, right? And then here I am this year, doing the same thing (picking up tools and some things for myself mainly as I see 90% clearances on some actual quality tools, etc.) this year, and there's so little traffic that it is literally as if it isn't even Christmas time.

So, I start talking to some of the cashiers at various stores, and while I'm talking to this cashier at Home Depot, this manager who I happen to know because one of his older relatives was a client of mine (before passing away two years ago - super nice person) comes up and wishes me 'Happy Holidays' (he could have said 'Christmas', this 'Holidays' thing is and has been waaaay too PC), and we start to talk. Well, it turns out that he pulls me to side (there's no one in line behind me), sort of away from the cashier and starts talking out the side of his mouth, you know, like he was trying to keep the cashier from hearing, and he tells me this economy sucks, this is the worse traffic they've ever had since he's been with HD, they're getting all kinds of weird signals from management, yada yada.

It wasn't just Home Depot, either. It was everywhere I went, including other Big Box stores and the lifestyle malls - everywhere.

Anyways. I do believe Brick & Mortar is going to suck wind when the revisionary sales, post-cnBSc shaftwork & babblecock by Michelle Big-Caboosa Cabrera announced in a part masculine-trying to be lusty voice, come in.

But maybe if retailers and etailers sell enough loss-leading merchandise, by taking the volume approach (and really, if no one is buying at higher prices due to Bernankeconomics - whereby people cut spending out of necessity unless they can buy things at incredibly low price points, because they're getting reamed so badly by inflation in non-discretionary areas and a shitty economy and wage growth/shrinkage/non-existence - what choice do the retailers and etailers have?) they can do well this season /snark/.


I would not doubt for a second that we've been living in a time period, during the last 3 1/2 years, whereby we are witnessing the biggest gap between what the government agencies that report economic data and the non-Federal Reserveless non-Bank have told us & what the reality has been IN MOST OF OUR LIFETIMES.

Think about the housing sales data revisions; just itself. Let's not even delve into retail sales, bank data, etc.

If the NAR has this big of a revision, then who knows whether it's even close to being accurate, and if it's not accurate, it's probably still fluffed to the high side.

But even if it is in the general vicinity of being accurate, what does this revision mean in terms of economic activity as measured by $$$ that were reported to have taken place for x number of years, but in reality was all an illiusion - a mirage - a genuine Matrix Data Set?

Who traded off this massive falsehood? What repercussions were there and what repercussions are still to come from this massive, in terms of economic/monetary revision, and what further discrepancies on housing sales data or other data pertaining to other categories are there and will there be, whether reported or not?

It's all a sick, twisted, f*cking joke at this point.

This one single revision of housing data represents hundreds of billions of dollars (closing in on the big trillion USD mark) of fake GDP, that was reported in many ways and through many conduits, leading to reliance, actions, etc., but it was all a lie.

Anyways, Merry Christmas. It's always a great time to buy a house.

Taku's picture

Since there are no apparent consequences these days to collossal screw ups...let me just add a zero to my net worth..,oops! I'll leave that for 4 years and deal with it then...oh now I've just forgotten what I was talking about. I don't know what you're referencing...what does what mean? I take the fifth..what?? An entire billion is missing? I'm not sure what that is...

lynnybee's picture

reply to TRUTH in SUNSHINE:   many are too broke to shop & the rest are sic to death of the entire scam.     many (like me & a few of my friends & family) are DELIBERATELY withholding our money from the scam economy.    many (like me & a few of my friends & family) are DELIBERATELY hoarding cash, silver & gold & food & NOT handing money to big box stores.   the tide has turned; any money i spend is local & on necessities only ......... it's over, it's so damn over.

karzai_luver's picture

Yeah, we were in a couple of different Best Buy stores in a real affluent neighborhood and the sales reps were think as fleas on a dirty dog the first of Dec.


Last weekend , other than the Iphone/ipod section you could not find one of them , I assume they were all cut back as the sales were done.

You couldn't get into the parking log of the 2 different Dollar Stores we drove past!


TruthInSunshine's picture

Dollar Stores are the fastest growing retailers in Amerika.

Dollar Stores = New Target/Wal-Mart

Target/Wal-Mart = New Macy's


One of the sharpest guys in retail, EVER, IMO, Howard Davidowitz, just tells it like it is (brilliant call on Dollar Stores for years now, too):

HOWARD DAVIDOWITZ: Ben Bernanke Will Go Down In History As The Fed Chairman Who Destroyed The United States of America (Outstanding Video Interview)

karzai_luver's picture

One of the 3 or 4 I will give a read.


tarsubil's picture

Good God. Dollar Stores are the most depressing thing in the world.

spanish inquisition's picture

The big pre Xmas sales started in October to pull forward sales in the chase for expected limited dollars. I guess it is only natural that the post Xmas sales are pulled forward to before Xmas to bump year end. Margin is going to get crushed.

Eagle1's picture


If the truth be known, the data manipulation goes all the way back to the 70's where is was more subtle and easier to get away with. I first started noticiing this as an analyst back then. it gathered steram in the 80's and has gone viral since. Check out John Williams's ShadowStats web site as he is more on top of this than any of the street shills. Perception is reality for the markets until reality becomes so real that the market cannot deny. We are at that point now and staring at the cliff we are about to fall over. Our entire society has become one big lie, and we are about to see what life is like in a dictatorship/police state. Think Russian or French revolution...

karzai_luver's picture

AND AND this was all during one of (until bush/bama bullcrap bailouts and fed of the world scams) the biggest "free money fog a mirror get a house" scam in the known universe.


Ans still the numbers , if you ever beleived them, were terrible.


Yep, the futures so bright I gotta wear those Nar-tinted shades baby.



pods's picture

Great book.  Describes the way that third world countries are caught in the debt web.

Soon to be played out over and over again in the former 1st world countries.


TheMerryPrankster's picture

Bubbles Bernanke does have a ring to it. Perhaps the title "Chairman of the fed" could be changed to "Bubbler Rex".

tarsubil's picture

Empires need lies. Everything is a lie.

economics1996's picture

I hear another bull rally when this shit hits Wall Street.  More bail outs on the way.

Elwood P Suggins's picture

Gues we now know what NAR stands for

Numbers Aren't Real

SheepDog-One's picture

National Association of Realtors are nothing but liars. You hear their ads all the time 'NOW is the best time to buy a house EVER' and all that....they dont care that prices are likely to fall another 25%, they need to generate commissions for their association members, meaning NAR is the LAST people to take any advice from.

Precious's picture

The National Association of Realtors should be prosecuted under the RICO Act. 

Sudden Debt's picture

Why the big fuzz? It's just a little rounding error of 14%....

Sometimes my dick is 18 inches in erection state, and sometimes it's only 16 inches.

It all depends if there's a lapdance included or not... and the size of the tits also count.

I don't care. As long as I get the booty.


Rainman's picture

Next time Mrs. Rainman catches me lying, I'll blame it on 'rebenchmarking'

LongBallsShortBrains's picture

Silly me..... I thought that was your ARMS swinging around!!!!

True.North's picture

I'm waiting for the CPI revisions

geologyguy's picture I know why the high school they "just had to build" 3 years ago for 15 million $ right down the street from me thinking it would be at maximum capacity is at less than half full.

Thank you NAR, local govt, natl govt, state govt, fannie mae, freddie mac, and all the other fuckers out there for creating this mess.

Now if only the band could muster more than 10 members for the football games...

Tsar Pointless's picture

CNBC headline:

  • US Existing-Home Sales Surged 4 Percent in November (Story Developing)
  • Tsar Pointless, LOLing in his cubichell.

    r101958's picture

    Please favor us with some editing. The above should read "CNBS headline:".

    oogs66's picture

    missed estimates by 600,000 but hey, still 4% better than last months number, which was revised down by 700k!

    TruthInSunshine's picture

    And 2007 through 2010 was only revised down by 3,000,000 home sales!

    Kali's picture

    Office of Comptroller of Currency-home foreclosures surge 21% in Q3 2011.  So even if true (lol)  the amount of foreclosures is rising 17% more than sales.  Oop.

    Irish66's picture

    Doesn't all forecast have to be revised now??

    whatsinaname's picture

    What role do the existing home sales play in the GDP ? what is the weightage if any attached to this component ?

    Maybe the formula will have to be changed yet again so things look rosy again ? 

    Don Birnam's picture

    Residential Fixed Investment represented 2.3% of GDP in 2010. With the continuing housing depression, I suspect that number is no higher -- indeed, perhaps lower -- for 2011.

    smlbizman's picture

    and these new numbers are how accurate? or is there a chance of error + or - 100%?

    LongBallsShortBrains's picture

    Do you really think there is any reason to be skeptical? You don't think they would LIE to us you? I guess that troll was right... We are a bunch of gloom and doomers here at ZH!!!!!


    firstdivision's picture

    After this adjustment, how does this line up with the MBA Purchase Apps?