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US Housing Market Was Artificially Inflated By 14% In 2007-2010 NAR Reports
Just the headlines for now:
- EXISTING U.S. HOME SALES REVISED DOWN BY 14% FROM 2007-2010
- EXISTING HOME SALES REVISED DOWN BY 15% IN 2010 TO 4.19 MLN
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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Seriously, what a bunch of dicks.
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.
EMPIRES NEED BUBBLES.
"Housing is one big lie" ?????
America is one big lie!
Reality has been Hyper-Hypothecated!
Economic forecasts are one big lie.
Read this:
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.
During the boom the houses were selling themselves. I never did get why they were getting a cut.
So America could employ retarded people.
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.
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.
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.
The National Association of Realtors should be prosecuted under the RICO Act.
@Alcoholic
Their job was to create a bidding war.
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]http://www.amazon.com/Secrets-Temple-Federal-Reserve-Country/dp/06716755...
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/.
NON-ANECDOTAL COMMENT:
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 that...by 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™.
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...
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.
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!
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)One of the 3 or 4 I will give a read.
That makes my day
Good God. Dollar Stores are the most depressing thing in the world.
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.
TruthInSunshine:
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...
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.
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.
pods
Read this as well. Its much shorter. ;)
http://www.thedailybell.com/1791/Anthony-Wile-with-John-Perkins-on-His-B...
Bubbles Bernanke does have a ring to it. Perhaps the title "Chairman of the fed" could be changed to "Bubbler Rex".
Empires need lies. Everything is a lie.
I hear another bull rally when this shit hits Wall Street. More bail outs on the way.
Gues we now know what NAR stands for
Numbers Aren't Real
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.
The National Association of Realtors should be prosecuted under the RICO Act.
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.
Next time Mrs. Rainman catches me lying, I'll blame it on 'rebenchmarking'
Silly me..... I thought that was your ARMS swinging around!!!!
I'm waiting for the CPI revisions
Odd...now 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...
CNBC headline:
Tsar Pointless, LOLing in his cubichell.
Please favor us with some editing. The above should read "CNBS headline:".
missed estimates by 600,000 but hey, still 4% better than last months number, which was revised down by 700k!
And 2007 through 2010 was only revised down by 3,000,000 home sales!
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.
Doesn't all forecast have to be revised now??
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 ?
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.
I see downgrade coming
and these new numbers are how accurate? or is there a chance of error + or - 100%?
Do you really think there is any reason to be skeptical? You don't think they would LIE to us now......do you? I guess that troll was right... We are a bunch of gloom and doomers here at ZH!!!!!
/sarc
After this adjustment, how does this line up with the MBA Purchase Apps?
I think you mean 'MBS', but it does seem like they got their degrees through Android Market or the App Store.
http://www.wikinvest.com/wiki/MBA_Purchase_Applications
absolute amateur hour
What if they are still lying?
What if??????
No, no.
You mean "What IF?"
A liar shall not be believed even when telling the truth...
Yes, especially when telling the truth = 5% of the time.
It is the way of the land to cover over bullshit, with more bullshit until you bury yourself in it. If you are successful in this venture you are now top pick for government work and running for office. Bullshit experience is a pre rec for thieves positions.
I wonder how many samples they need to get a better than real read on consumer sentiment.
The sample group:
Employed, pollyanna and on high doses of prozac.
who?
The National Association of Realtors should be prosecuted under the RICO Act.
So you're saying I've been lied to by these people, And they don't work for the government ?!
yeah, really shocking, that you are lied to by people who work for your government! who would ever thought...
Yup. These are the other class of liars. They work WITH the government
Of course now they will have favorable comps going forward to make it look like housing is recovering
Hahahaa, exactly my thought also. Now we can wait all those "Better than expected!" spins from the banks going forward. And just in case, the winter is coming and with it comes the dear excuse for everything and anything: "weather related".
I don't know about 'comps' per se, but definitely thinking the best way to get the numbers to say what you want is to change the formula. Particularly if that lowers last years numbers which it has. Bar has been effectively lowered. Move along now, nothing to see here.
I can guarantee you that NAR did not make formula revisions that would work against them in the future. That is not happening.
The National Association of Realtors should be prosecuted under the RICO Act.
They were just followings orders....
will GDP be revised far enough down to indicate that we are actually in recession?
MBS purchases enroute early 2012.
Yea let's see those GDP revisions because they would be nasty on top of nasty. Talking real depression territory for those low years.
Or...House GOP could send us all a check to keep quiet and nobody needs to know
are the algo's focusing on the "better than expected" 4% MOM increase? the numbers are horrific!
NAR = Continued lies.
Always touted it was the best time to buy a home when the crash started.
Many young people are so loaded down with school loans they will have a tough time affording anything.
All your (former) homes are belong to Ben.
Why on earth would anyone take industry lobbyists at their word anyway?
There are no lobbyists in the Obama administration, remember? No bankers either. Transparency, Bitchez.
SO...does this mean all of those stock 'rallies' on the housing news are going to be given back?
Naaah...that would be in a REAL market.
absolutely! Just look at DRV is up .001% today after collapsing by 30% over the last few weeks. Correction is over, time to buy Mall Reits.
I don't get why not keep the lie going ? Why bother to be truethful.. there must be some motive no ? Are they setting the stage for some fed action soon?
Corelogic called them out on their bullshit in January.
Are you kidding , all you have to do is "fess up" and the avg sheep will forgive and forget and then you rape them all over again.
It's the amuerican WAY!
Just say your(re) sorry and go right on with the scam.
http://www.realtor.org/press_room/news_releases/2011/12/ehs_nov
Yes...go to this link....print out...then wipe ass with report.
It's always a great time to buy! Buy now or be priced out forever!
It's always a great time (for us to get a slice when we get you) to buy!
Buy now or (we may) be priced out (of a C-class) forever!
Young people with student loans won't be purchasing houses any time soon either. I don't think the housing market will recover for a while.
I have 20% down, but am perfectly happy to rent and gamble with it until 16% of the current price is sufficient.
With prices dropping and rates nailed to the floor, why the hell would I do anything else?
I'm renting too. I got me a nice pad in town for 225 a month. Sure it's in a shady area, but I'm pretty shady myself.
$225 a month? is that the janitor's closet or something?
225 a month? That's like 5 days worth of rent here in the DC area for a marginal place in a mediocre neighborhood. You renting from a family member or something?
$225 ??? my taxes and insurance is $354 a month here in Michigan. Patrick.net does a good job on the rent vs. buy thing.
I will be perfectly happy with you renting my house for 100% more than what my payments are.
I don't know specifically how this revision will affect future numbers. But to me it appears they are trying to game the system by now lowering past number and thus make it easier to raise future year on year moving averages.
See BLS weekly.
exactly what i was thinking, just lower the anchor points a bit (only 14%) and next time they can report huge "improvement" or "better than expected"
and the majority will swallow this
They are industry shills and may as well be showing you something their kid drew with a crayon.
In a related note:
http://www.census.gov/construction/nrc/pdf/newresconst.pdf
Just want to direct everyone's attention to the margin of error on housing starts and completions. Begs the question of why people even bother.
+/- 20% lol what a fucking joke.
How to Lie with Statistics 101
The National Association of Realtors should be prosecuted under the RICO Act.
America the....Joke.
Just adjust the adjusted numbers down by 14% and you'll get the truth.
NAR: we lied about existing home sales
Corzine: we lied about where your money was
BLS: we lied about embargoed data release times
Anyone in jail, or doing 'community service'?
I think it's time we re-visit the Madoff: I can argue that he created jobs and was the victim of too much government intervention
- sees Australia maintaining low debt levels'
Moody's has gone full retard. Has nobody the capacity to visit Steve Keen's site for some decent numbers? Mouthbreathers...
Obama on 60 Minutes December 11, 2011
Kroft: ...there's not been any prosecutions, criminal prosecutions, of people on Wall Street. And that the civil charges that have been brought have often resulted in what many people think have been a slap on the wrist, fines. Are you disappointed by that?
Obama: ...I can tell you, just from 40,000 feet, that some of the most damaging behavior on Wall Street, in some cases, some of the least ethical behavior on Wall Street, wasn't illegal.
You're just spilling out all over the dock, aren't you?
"Pippit, here pippit. Pippit?"
pods
Ha ha.
Fellows, let's be reasonable, huh? This is not the time or the place to perform some kind of a half-assed autopsy on a fish... And I'm not going to stand here and see that thing cut open and see that little Kintner boy spill out all over the dock.
The National Association of Realtors should be prosecuted under the RICO Act.
We get it. No need to post the same fucking sentence 6 times.
Seven times, a-hole. And more until the American public f-ups finally get it.
The National Association of Realtors should be prosecuted under the RICO Act.
Look at the Dow - to borrow CNBS' word regarding November 2011 existing home sales - "surge" upon release of this news.
BTFD you idiots! Santa's watchin' ya!
So the housing bubble was a lie? I see the errors beginning in 2007.
Why are you negativing me? It's just a question.
OMG! I cannot believe.
You desterbeds are negativing my negating question! Sick!
Just curious, do the people who trusted the NAR's numbers also buy their Rolexes from street vendors in cambodia?
The National Association of Realtors should be prosecuted under the RICO Act.
Liar, Liar! ...
Hey, Bullish on pants!
Better name: National Association of Liars
I wonder if they will revise GDP accordingly! Not likely!
Keep on slapping up those ( Card- Board-Boxes ) , you asshats. Shanghai style. No wonder ( CAT ) was up 5% yesterday!
I am sure all those factors did not affect data before 2007
I'm sure many other numbers, i.e. unemployment, inflation, etc are off by 14% too....... but the market was up 300+ points on Dec 20th??????
Components of U.S. GDP
GDP (Y) is a sum of Consumption (C), Investment (I), Government Spending (G) and Net Exports (X – M).
Here is a description of each GDP component:
A fully equivalent definition is that GDP (Y) is the sum of final consumption expenditure (FCE), gross capital formation (GCF), and net exports (X – M).
FCE can then be further broken down by three sectors (households, governments and non-profit institutions serving households) and GCF by five sectors (non-financial corporations, financial corporations, households, governments and non-profit institutions serving households). The advantage of this second definition is that expenditure is systematically broken down, firstly, by type of final use (final consumption or capital formation) and, secondly, by sectors making the expenditure, whereas the first definition partly follows a mixed delimitation concept by type of final use and sector.
Note that C, G, and I are expenditures on final goods and services; expenditures on intermediate goods and services do not count. (Intermediate goods and services are those used by businesses to produce other goods and services within the accounting year.[7] )
According to the U.S. Bureau of Economic Analysis, which is responsible for calculating the national accounts in the United States, "In general, the source data for the expenditures components are considered more reliable than those for the income components [see income method, below]."[8]
I just wondered this, and you already answered.
Shouldn't there be a lot of assholes puckering as we speak as the broader implications of this BullShit number works it's way through all the index's?
y = c + i + g + (x - m) +F... where F = Fantastic Fungible Fudge
Exactly. And if the gov't wasn't deficit spending to the tune of 1.5 trillion (10% of GDP) then where would this 'recovery' be? Well, about -8% GDP. So much for this farcical mirage of a 'recovery'.
Unfortunately this has been the game for decades. Just out of morbid curiosity, I recently looked up the annual US GDP since 1980 and factored out deficit spending and inflation. As you might guess, the result was a complete and total train wreck. We had a couple years that showed small growth in the late 90's without the life support systems, beyond that it was a wall to wall disaster. Someday I plan to track back and try to see when things went completely off the rails as a matter of policy, but its been a few months since I did that and the nausea hasnt subsided yet.
The problem with this country is that these people never get punished. All these people have to say is it was a mistake, no criminal intention there was.
That was with Hank Paulson and every other jerks there are out there making millions by lying to the public. They lied to the public and they get away with it all the times. It wasn't like this in 70s. People has some honors, then. I am getting really sick seeing these stuffs everyday.
These two issues here:
Are really rookie mistakes that a grad finance student could not get away with. Unreal.
Can't wait to see Mr. Middleton's take on these revised numbers
All to keep the property taxes up. Arrests and executions should commence from DC down to the County seats everywhere. What a disgrace. Phony numbers by phoney leaders.
At some point they will have to admit housing started falling apart in late 2005.
So will this lead to a market dump or pump? Thoughts? Vote please, up arrow of pump, down arrow for dump.
I voted pump and here's why. The market will quickly realize that this downward revision leads to more favorable numbers going forward, as the headlines will read "Housing Sales Increase, Top Estimates." The reality behind the numbers is meaningless, only the perception of what will be perceived counts. The fact that I have come to think this way proves to me that I need to withdraw from this crazed system and learn to farm or maybe get a job down at the carwash.
No, this time we aren't lying, honest.
pods
I think this is strong evidence of a RICO crime on the part of NAR executives as a conspiratorial attempt to manipulate the equities market in favor of their 'clients'. But of course the worst AG since John Mitchell ( and that's really saying something considering the sorry lot of them since) will do absolutely nothing about it.
You owe me a new keyboard.
Kubler Ross model would seem to indicate a nadir is near.
But Cramer called the bottom in 2006, 2007, 2008, and 2009.
So his "getting back to even" strategy may also be flawed?
On a serious note, in the last month Fed admitted that they are awful economic forecasters and NAR admitted they completely make up numbers. Yet Yanks continue to create macro economic policy responses to horrible date.
Alas, capital markets and the sheeple that worship them, never look behind the curtain, until the curtain is blown to hell.
This is bullish, it'll be easier for housing to grow off that lower base right?
So are they going to adjust all the other index that use the NAR housing values and recalculate them backwards to give us a good look at everything?
Recalculating!
http://www.youtube.com/watch?v=tZXM_g3mqew
So, we were all lied to... and no one is going to go to jail for this?
Sounds like a pretty rigged system to me! Someone is making their Christmas bonus right now off some insider info about this, and the plunge on Wall Street that will follow... you can bet your bottom dollar on that... and the fact that not one single criminal will go to jail over it.
The 60 Minutes piece on Detroit was telling. The city is bulldozing $100K properties rather than have them turn to blight -- stripped of aluminum siding, copper pipes and fixtures.
People are paying attention.
The residential investment component in housing in Q1 GDP 2010 was $355.5 Billion. A back of the envelope adjustment of -15% to that number is roughly $302.2 Billion. The net effect on GDP would be a subtraction of about $53.3 Billion from Q1 GDP 2010. It deflates the GDP number for that quarter by roughly .3% from +2.7% GDP to +2.4%. Each GDP quarter which falls into the NAR's revisions would have a similar effect.
From what I understand existing home sales by themselves do not affect gdp. However, I am sure this feeds into calculating some other input of GDP. Anyone have a good answer?
as bad as this sounds you can see that the mkt and its robots are gonna go higher today what a fucking joke..although there were complaints that mkt were manipulated by floor traders at least the mkt would correct now the algos have completely made this a ponzi scheme of epic proportions
so when do we find out that the BLS has fudging unemployment on the low side for the last 4 years? you know, that it really was and still is the 12 or 15 or 20% Obama said it "could have been" had we not handed over x amount of trillions of dollars to banksters worldwide...
Dukin' doughnuts has it wrong...America runs on lies, propaganda and "statistics"
GoW is the bollox!
Next : GDP revision and unemployment revision... just before the election would be neat to crush Obama once and for all.