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Rebenchmarking Reflects FSBO Drop

NAR Chief Economist Lawrence Yun told Nightly Business Report anchor Suzanne Pratt yesterday that the association’s rebenchmarking of existing-home sales (EHS) data, which it released yesterday, only affects the number of home sales as tracked at the national level and has no impact on the number of sales tracked at the local level and no impact on the issue consumers care the most about: the value of their home.

Yun says the association’s method of tabulating sales nationally is based on the number of sales recorded by local MLSs and then run through a calculation that adjusts for the percentage of for-sale-by-owner (FSBO) transactions and other variables. Starting in about 2007, the number of FSBOs dropped significantly, as home owners that would have otherwise tried to sell their house on their own turned instead to real estate agents to help them.

Those additional sales were captured by the local MLSs but should not have been counted by NAR, because its tally had already factored in a certain percentage of FSBO transactions.

“What happened during the downturn was that the for-sale-by-owner market got crushed,” he said.

Yun said he expects both sales and prices to improve in 2012, and nothing in the rebenchmarking has any impact on either of those. “We are beginning to see an underlying trend where buyers are coming into the market and correspondingly inventory levels are falling, and inventory levels need to fall before prices can stablize,” he said.

Above excerpt:

More on the rebenchmarking.

The clip above excerpts about two minutes of the Yun interview with Pratt. The full interview, which runs about four minutes, is on the Nightly Business Report website.

Robert Freedman

Robert Freedman is manager of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at rfreedman@realtors.org.

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Comments
  1. I love reading the information provided in your articles. After nearly 25 years in the real estate business I have seen many changes from market trending highs and lows, to high interest rates, and terrible loan practice’s across the board.. Everyone is making less then they wanted including the real estate professionals paying higher advertising cost and MLS fees every year, gas prices, they are right in the throw of it with all the struggling population. Many agents at times are being asked to reduce their fees to put a deal together. We already got less, because sellers are getting less……It is not your agents fault, it really is not. I feel there are two “main” real reasons that real estate is now moving again:
    My take on the market today:
    #1.Sellers after 3-5 years, are coming to terms with the fact that they are not going to get the price they once could have during the boom……. for their properties. (they missed that boat). Many buyers continued to look and get a feel for the markets they were interested in…which in the long run really helped them make a intelligent pricing/offer decision when they found what they were looking for.
    #2. Interest rates are at all time lows and many buyers that were on the picket fence, has decided that owning a home is the American way and NOW is a great time to jump in.
    I know real estate will recover…this was a “man made crisis” and they take a little longer to recover. Hang in there, owning a home is the best thing you can do for a family and your future. The other way is throwing money away. You all need a place to live so why not own it. Best to all the read this and have a wonderful day!

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