Rebenchmarking: What’s the deal?
Here’s everything you need to know about the revised — “rebenchmarked” — figures NAR released for existing-home sales.
(Quick recap: In early 2011, it came to light that NAR’s national home sales data was inaccurate — it seemed to overestimate the number of existing homes sold from 2007 through 2010 by as much as 10-20 percent. Why?
Because exact national data is impossible to get thanks to MLS overlap, lack of data in some places, and a lot more. So NAR’s figures have always been based on estimates. But when the housing bubble burst, it threw those estimates out of whack as FSBO numbers plummeted… but NAR’s estimates of FSBO sales didn’t.
Hence, the rebenchmarking. Of course, national data is only meant to give a general feel for the housing economy. It’s great for economists and planners, but for Realtors in the trenches, local data is where it’s at.
There isn’t much of a surprise with the revised NAR data ; we’ve known for most of a year that there was going to be a significant drop. Remember: These are only national figures. Local numbers haven’t changed, as those are based on MLS figures and aren’t estimates.
Less talking! More numbers!
The actual revised numbers show that existing-home sales were 14.6 percent lower in 2010 than originally reported. Looking at all of 2007 through 2010, the new figures are 14.3 percent lower. Obviously, national inventory estimates over the same period are affected equally.
What isn’t affected at all:
- Changes reported during the last five years (“up XYZ percent in April,” “down PDQ percent in 2010,” etc.)
- Pricing data
- Local sales and pricing figures (because, as noted above, they’re not estimates)
- “Months supply” figures
And… that’s it. Calculated Risk has a great chart:
So for all the talk on various economics blogs about what a big deal NAR’s new numbers were going to be, the end result is rather anticlimactic.
Of course there are plenty of conspiracy theorists out there claiming that it was all a plot by NAR to make the housing market sound better than it was so that… um, well, there isn’t any good explanation.
They’re missing the point, of course. NAR’s numbers are only meant as a guideline — a barometer for the overall housing economy. And because the month-to-month and year-to-year changes weren’t affected, the guideline still works. We can still say that sales in Month A were 12 percent higher than in Month B, and so on. And no one is making buying decisions based on national estimates.
Anyway, sarcasm aside, there’s plenty to read about the revised figures if you have the urge: