The National Association of Realtors said that it overestimated home sales by nearly 15% in 2010, an indication that the housing market is in even worse shape than many experts previously thought.
The Realtor group said it now estimates that 4.2 million existing homes were sold in 2010, or 715,000 less than its previous estimate of 4.9 million homes sold. Roughly half of the revision was due to a decline in for-sale-by-owner homes that were not reported on the multiple listing services databases set up by Realtors.
NAR found that for-sale-by-owners homes accounted for 16% of all existing properties sold in 2000, but that number dropped to 9% in 2010. Because of the housing downturn, more homeowners either have kept their homes off the market or have used realtors to sell their homes, which skewed the trade group’s methodology, according to NAR spokesman Walter Molony. He also attributed the overcounting to homes being listed on several multiple listing services, which resulted in double-counting.
NAR’s revision comes nearly a year after doubts were first raised about its methodology. Economists with the analytics firm CoreLogic issued a report in February claiming the trade group was inflating its numbers.
The group’s data on existing home sales will be revised downward by 14.3% for the past five years, from 2007 through 2010. “It’s a research and methodology issue that was out of date,” says Sam Khater, CoreLogic’s senior economist. “Over the course of 10 years, small differences can add up.”
NAR used Census Bureau data from 2000 to determine the total number of existing homes. It now plans to revise its data every year using the Census’ American community survey, Molony said.
Daily Briefing | Thursday, December 29, 2011
Extension of MI Tax Deduction Uncertain
Numerous tax provisions including the mortgage insurance tax deduction will expire Jan. 1 because Congress did not pass its annual tax extension bill before the lawmakers left town Dec. 23.
GSE Guarantee Fee Hike Coming April 1
The Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to implement a congressionally mandated increase in their loan guarantee fees on April 1.
Realtors Report Signals Higher Sales in Coming Months
A leading indicator of future home sales jumped 7.3% in the November to its highest level in over 19 months, according to the National Association of Realtors.
Fitch Estimates Store Closure Exposures in CMBS
Fitch said Thursday it sees little risk of a negative rating impact on CMBS from the closure of 100 to 120 unspecified Sears and Kmart stores across the U.S., but noted there is some exposure in the commercial mortgage-backed securities universe to the concern.
Rates Ending Year Near Historic Lows
Average weekly fixed rates for mortgages inched up a bit but still are ending the year near their all-time historic lows, according to Freddie Mac.
Hawaii Homeowners Obtaining the Highest Loans
The highest average residential home loan amount is given to homeowners who live in Hawaii, according to data from LendingTree.
Another High-Rise Starts in South Florida
The fourth of 20 high-rise condominiums planned for the tri-county South Florida market is now in the ground.
Mortgage Loan Processor Admits to $3.5 Million Fraud Scheme
A Rhode Island mortgage loan processor with National City Mortgage Co. has pleaded guilty to participating in a straw-borrowing scheme that brought in more than $3.5 million in fraudulently obtained mortgages.
FDIC Focus Evolves From Failures to Dodd-Frank
The FDIC, which has seen nearly 100 banks fail during 2011, is projecting that figure may rise again in 2012.
Will Honeymoon Period for CFPB End in 2012?
Despite the hand-wringing and nail-biting, the Consumer Financial Protection Bureau made it through 2011 without any major confrontation with the banking industry.