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.