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

Tyler Durden's picture

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.