The “most popular measure” of existing home sales, the National Association of Realtors’ Existing Home Sales, has increasingly overstated home sales for ten years as measured by five other sources, and reached a level in 2010 that is 15 to 20 percent higher than actual sales, according to data provider CoreLogic, which made the charges in its US Housing and Market Trends Report.
CoreLogic reported sales totaled only 3.6 million in 2010, down 12 percent from 2009. By comparison, NAR reported sales fell only 5 percent in 2010 after rising in 2009, and were flat relative to 2008. CoreLogic said sales did not actually rise in 2009
Benchmarking drift, more sales going though MLS systems due to consolidation and a lower sjare of for sale by owner transactions contributed to the divergence between NAR’s numbers and Census, HMDA (Treasury), Mortgage Bankers Association and CoreLogic.
CoreLogic said the faulty sales numbers caused NAR to understate its measurement of inventory, months’ supply. Months’ supply actually rose to 16 months of unsold homes in November, the highest since February 2009. A level of six to seven months’ supply is considered normal.
During 2010, the distressed sales rose to 28 percent of the market from 27 percent in 2009. The REO share of sales fell from 22 percent to 21 percent while the short sale share increased from 6 percent to 7 percent.
Last year, the average non-distressed price increased 7 percent to $241,500, reflecting the impact of the tax credit and the changing mix of transactions, especially on the upper end of the price distribution. However, the average price for REOs fell 1 percent to $140,600, while the average short sale price fell 2 percent to $215,300.
CoreLogic also said that the rise of distressed sales and weakness of sales at the lower end of the price distribution is having an impact on the low priced tier of the repeat sales index. As of November, the low priced tier was down 7 percent year-over-year, compared to an 8 percent increase as of just 6 months ago.
For a copy of the report, click on the link at the top of the story.