It’s no secret that I don’t particularly like the practices of the NAr. They consistently embarrass themselves and their members by putting out false and misleading data and press releases. Credibility comes from telling the truth, even when that truth may be unpopular or contrary to one’s own interests. The NAr has consistently lacked credibility as they have proven unwilling to say anything negative about the prospects for real estate despite a massive decline in sales volumes and resale prices. They consistently told buyers to purchase homes as sound investments when prices were inflated and falling. From 2007 through 2011, prices were too high in most markets to warrant purchasing for cashflow investment purposes, and with falling prices, there was certainly no reason to buy for wealth building from appreciation. Despite these obvious facts, the NAr still urged everyone to buy. It’s a self-serving manipulation designed to generate commissions at the expense of hapless buyers. Shame on the NAr.
The latest NAr reporting scam involves the obscure practice of data revision. It’s not uncommon for government agencies and other bodies that collect and disseminate monthly data to go back and revise prior reports when final data comes in. There is a balance between timeliness and accuracy. Revisions are sometimes necessary. If the data compiler is making an honest effort to report the truth, the revisions should be small, and the downward revisions should equal out the upward revisions. That’s not what we get with the NAr.
The NAr wants to tout the strength of the market, even when it is weak. The easiest way to make the market look strong is to report an increase in sales. But what happens when sales actually go down? Well, the NAr has a solution to that problem. They merely revise their previous month’s data downward to create an increase which doesn’t really exist. By consistently overstating their sales data then downwardly revising after the fact, the NAr can consistently report rising sales even when sales are not rising. It works well for them. They dupe a few more people into buying, and their membership is happy. But what about the people who based decisions on the faulty NAr data? That’s not the NAr’s problem, is it?
Existing-Home Sales Rise Again in January, Inventory Down
Washington, DC, February 22, 2012
Existing-home sales rose in January, marking three gains in the past four months, while inventories continued to improve, according to the National Association of realtors®.
Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 4.3 percent to a seasonally adjusted annual rate of 4.57 million in January from a downwardly revised 4.38 million-unit pace in December and are 0.7 percent above a spike to 4.54 million in January 2011.
Back in December, the NAr reported “The latest monthly data shows total existing-home sales1 rose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November.” Note that the 4.57 million they reported in January is below the 4.61 million they reported in December, but with the magic of downward revisions, they get to report a 4.3% increase. Also note they they pulled the same trick in December to get a number bigger than what they reported in November.
Am I the only one bothered by this behavior?
Lawrence Yun, NAr chief economist, said strong gains in contract activity in recent months show buyers are responding to very favorable market conditions. “The uptrend in home sales is in line with all of the underlying fundamentals – pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents.”
Total housing inventory at the end of January fell 0.4 percent to 2.31 million existing homes available for sale, which represents a 6.1-month supply2 at the current sales pace, down from a 6.4-month supply in December.
“The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers,” Yun said. “Foreclosure sales are moving swiftly with ready home buyers and investors competing in nearly all markets. A government proposal to turn bank-owned properties into rentals on a large scale does not appear to be needed at this time.”
LOL! Yun sees potential sales deferred to future years and doesn’t want that to happen. Between the existing REO and shadow inventory, banks need these bulk sales to regain their capital without causing a catastrophic decline in house prices in every market. Yun wants the sales to generate commissions, but he ignores the very unpleasant side effect of the lower prices this liquidation will cause.
Total unsold listed inventory has trended down from a record 4.04 million in July 2007, and is 20.6 percent below a year ago.
NAr President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said buying power is enticing more potential home buyers. “Word has been spreading about the record high housing affordability conditions and our members are reporting an increase in foot traffic compared with a year ago,” he said. “With other favorable market factors, these are hopeful indicators leading into the spring home-buying season. We’re cautiously optimistic that an uptrend will continue this year.”
NAR Continues Tradition Of Making Mockery Of Itself, Revises December Home Sales From +5% to -0.5%
Submitted by Tyler Durden on 02/22/2012 10:13 -0500
And here is yet another reason why we will permanently ignore the pathologically lying real estate syndicate known as the NAR (link): December data was just revised from +5% to -0.5% (from 4.61 million to 4.38 million). Since December market expectations were for a +5.2% print, imagine the sheer horror the algos would have been faced with had the real number been reported on time. Needless to say, if this number had been unrevised, the January +4.3% increase would have been a decline. This way the aglos focused only on the immediate moment get two months of beats in a row. Huzzah. Anyone who trades anything based on this borderline criminal self-reporting enterprise needs to have their head checked.
People trade on this information all the time. The only reason the NAr collects and reports this information is part of a broader public relations campaign to get people to buy homes. The NAr presentation is designed to fool people who are too busy to really investigate what’s going on for themselves. Most people accept realtors as an authority on real estate and put their trust in them as if realtors were an objective source of honest information. Unfortunately, realtors generally don’t deserve the trust they are given.
In other news, when will the LIBOR investigation finally target the NAR?
And for feces and giggles, here is the one, the only, NAR mastermind Larry Yun.
Lawrence Yun, NAR chief economist, said these are early signs of what may be a sustained recovery. “The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”
NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said more buyers are expected to take advantage of market conditions this year. “The American dream of homeownership is alive and well. We have a large pent-up demand, and household formation is likely to return to normal as the job market steadily improves,” he said. “More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.”
Warning: the man in the above video may be a paid actor.Golf clap Larry for this latest piece of paid propaganda. However if you were to actually stand back and have an objective thought for once in your life you would know that record low mortgage interest rates are doing absolutely nothing for consumer confidence, as shown here.
Both interest rates and purchase applications for mortgages are near record lows. Locally we are seeing an increase in sales and declining inventory, and much of it is due to low interest rates making prices affordable. However, that isn’t what’s happening in the rest of the country.
The NAr is an embarrassment, a pathetic joke played on buyers for the benefit of realtors and sellers. Unfortunately, the government isn’t forcing them to change their ways, and I haven’t heard of any movement in the organization to change things either. The NAr will continue to ply their trade, and I will continue to point out the error of their ways.
Proprietary OC Housing News home purchase analysis 
22265 LANTERN Ln Lake Forest, CA 92630
$434,500 …….. Asking Price
$650,000 ………. Purchase Price
8/9/2006 ………. Purchase Date
($215,500) ………. Gross Gain (Loss)
($52,000) ………… Commissions and Costs at 8%
============================================
($267,500) ………. Net Gain (Loss)
============================================
-33.2% ………. Gross Percent Change
-41.2% ………. Net Percent Change
-6.9% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$434,500 …….. Asking Price
$15,208 ………… 3.5% Down FHA Financing
3.85% …………. Mortgage Interest Rate
30 ……………… Number of Years
$419,293 …….. Mortgage
$116,905 ………. Income Requirement
$1,966 ………… Monthly Mortgage Payment
$377 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$109 ………… Homeowners Insurance at 0.3%
$482 ………… Private Mortgage Insurance
$87 ………… Homeowners Association Fees
============================================
$3,020 ………. Monthly Cash Outlays
($301) ………. Tax Savings
($620) ………. Equity Hidden in Payment
$20 ………….. Lost Income to Down Payment
$74 ………….. Maintenance and Replacement Reserves
============================================
$2,192 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$5,845 ………… Furnishing and Move In at 1% + $1,500
$5,845 ………… Closing Costs at 1% + $1,500
$4,193 ………… Interest Points
$15,208 ………… Down Payment
============================================
$31,090 ………. Total Cash Costs
$33,600 ………. Emergency Cash Reserves
============================================
$64,690 ………. Total Savings Needed
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599……
sales@ochousingnews.com…..
We're sorry, but we couldn't find MLS # S679239 in our database. This property may be a new listing or possibly taken off the market. Please check back again.
Competing Listings
 |
$673,990 9 SILVER SPRUCE Ct |
0.27 miles 3 bd / 2.5 ba 2,321 Sq. Ft. |
|
 |
$570,000 22211 SHADE TREE Ln |
0.36 miles 4 bd / 2.5 ba 2,397 Sq. Ft. |
|
 |
$569,000 21835 TUMBLEWEED Cir |
0.45 miles 4 bd / 2.5 ba 2,011 Sq. Ft. |
|
 |
$639,000 22432 FOREST Hls |
0.46 miles 4 bd / 2.25 ba 2,456 Sq. Ft. |
|
 |
$489,900 22571 MARYLHURST Ct |
0.5 miles 4 bd / 2 ba 2,000 Sq. Ft. |
|
 |
$459,000 21741 RIMROCK St |
0.51 miles 4 bd / 3.5 ba 2,011 Sq. Ft. |
|
 |
$485,000 25880 ASTOR Way |
0.61 miles 4 bd / 2.75 ba 2,039 Sq. Ft. |
|
 |
$598,500 25921 WINDSONG |
0.64 miles 4 bd / 3 ba 2,206 Sq. Ft. |
|
 |
$499,900 22916 BROADLEAF |
0.65 miles 4 bd / 2.5 ba 1,793 Sq. Ft. |
|
 |
$545,000 24991 OWENS LAKE Cir |
0.69 miles 4 bd / 3 ba 2,493 Sq. Ft. |
Wouldn't you be embarrassed to overpay by $100,000? Only fools buy houses without knowing neighborhood values. Don't be a fool. Don't suffer the pain of an underwater mortgage. The surest way to lose your house is to overpay for it. Our reports identify overvalued and undervalued neighborhoods. Use it to broaden or narrow your search area. Savvy buyers work with us to find bargains. We've saved thousands from financial ruin. Let us save you too. If you want peace of mind while shopping for your next home, sign up for our monthly market newsletter.
15 Responses to “NAr reaffirms they have no credibility by reporting false increases in sales”
Sorry, the comment form is closed at this time.
Apparently other have noticed the NAr trickery.
Experts Respond to January Home Sales Report
In response to data released by the National Association of Realtors (NAR) on Wednesday, experts overall agreed the housing market is heading towards recovery but advised certain factors need to be taken into consideration when analyzing the numbers. Here are responses from Capital Economics, IHS Global Insight, and Moody Analytics.
Month-over-month increase in January of 4.3 percent
Capital Economics:
“[It] is not quite as encouraging as it first appears given that it comes at the expense of a 5 percent downward revision to the previous month’s figures. Nevertheless, it’s still the case that existing home sales are recovering, albeit only gradually.”
December’s total was revised downward to 4.38 million from 4.61 million, and January’s seasonally adjusted annual rate is 4.57 million.
Celia Chen, senior director, Moody’s Analytics:
“Sales of U.S. existing homes marched upward in January, maintaining a trend that started in the second half of last year. Slow, but steady gains in existing-home sales, falling inventories, and softening in the median house price depreciation all point to a good start for 2012.”
The Northeast, Midwest, South and West increased in home sales
Capital Economics:
“Existing home sales rose in each of the four regions in January, including an 8.8 percent month-over-month gain in the West. Taking the past few months as a whole, the improvement in existing home sales has been broad based.”
Patrick Newport, U.S. economist, IHS Global Insight:
“Indeed, the market for existing homes is about as strong as it has been in five years, nationally and in all four regions. True, we saw better numbers during some months in 2009 and 2010, but these were driven by the two homeowner’s tax credits, which shifted activity across time, without appreciably raising overall sales. Single-family sales account for almost all of the recent improvement.”
Housing inventory for January fell 0.4 percent from the previous month, with a 6.1-month supply in
January, down from a 6.4-month supply in December
IHS Global Insight:
“Inventory dropped to 2.31 million units, the lowest level since March 2005; the months’ supply, at 6.1 months, was at its lowest level since March 2006. These numbers suggest that the housing glut is going away. Other data suggest that getting rid of the excess will be a drawn-out affair that will take at least two more years.”
Factors that help move the U.S. towards recovery
Capital Economics:
“Improving consumer confidence about the house price outlook and higher loan-to-value ratios available from banks point to a further improvement in sales later this year.”
Moody’s Analytics:
“Job growth is gaining traction and consumer confidence is lifting. Moreover, housing remains highly affordable, with mortgage rates near record lows and house prices still declining in many regions of the country.”
Factors that can hinder recovery
IHS Global Insight:
“Investors have accounted for almost all of the increase in sales the past four months. Sales to non-investors have improved marginally, probably because credit is tight. Tighter credit has taken many forms, including higher down payments, stricter appraisal standards, higher fees, more documentation, and a smaller line of products. There are no signs that credit is easing, one reason that we are not expecting sales to take off anytime soon.”
Capital Economics:
“Given that average temperatures were unseasonably warm in January, some of the rise in existing home sales to an annualised 4.57 million could be reversed once the weather returns to normal….moreover, with the wider economic recovery likely to be sideswiped by the default and exit of Greece from the euro-zone later this year, the economy will become less supportive for home sales.”
Moody’s Analytics:
“However, rising gas prices, troubles in the euro zone and the possibility that some recent economic and housing strength is weather-related mean those risks have not disappeared. Recall that 2011 began on a similarly positive note, but that conditions quickly deteriorated.”
Projection for the future
IHS Global Insight:
“The market for single-family homes picked up in the second half of 2011, after being stuck near the bottom for nearly three years. This pickup is real, but the road to recovery will be a slow one. Our projection is that existing home sales will be 8 percent higher in 2012 than in 2011.”
Want to know what else NAr reaffirms?
they absolutely love to spend money on ‘buying influence’….. especially since the bubble-fraud phase initially commenced. So much so, they’re #8 on the top spenders list.
Lobbying expenditures from 1998-2011: $178 million
http://www.opensecrets.org/lobby/top.php?showYear=a&indexType=s
Now ZH is making fun of Lawrence. I love the “Warning: the man in the above video may be a paid actor.” I wonder how long he can keep this up. He’s been lying to the public for years. Maybe he’ll get an Oscar on Sunday.
IR, r u seeing an uptick in foreclosures since the $25B settlement?
The uptick started in January even before the settlement was announced. I think the banks knew it was a done deal. The are working to clear out the shadow inventory, but they have a long way to go.
For what it’s worth, I think I’m seeing a little uptick in REO listings on Redfin in the 500k$ and up range, and all priced aggressively to sell. It’s amusing when you see an equity seller listing a property at 640 in the exact same neighborhood as an REO at 580.
I wonder if this will be the year the banks destroy the equity seller? Maybe they figure it’s worth it to drive prices down 15% and take some losses if the end result is to clear out the nonperforming loans, unload the unwanted houses, and boost business in performing mortgages.
For that matter, it may be better on a macro scale for them to get this business done before a Republican Congress (and maybe President) is sworn in January 2013. The Rs are somewhat less eager to protect the interests of big finance than the Ds (the reverse of the situation with big oil, construction, and farming), and the banks could see a chill wind blowing next year.
Oops, I misread the listings. I saw an equity sale at 680 in the same neighborhood as the REO at 580. Very similar houses. Imagine that! This fellow thinks he’s going to get $100,000 more for the exact same house, because…uh…because…hmm…gee, I wonder what he is thinking?
In my reports I keep seeing declining prices on a $/SF basis. If you look at Redfin’s data on neighborhoods, they show consistently declining $/SF sales as well. The equity sellers come out and raise asking prices every year, but what actually sells is going down, down, down.
With inventory selling faster than lenders have been putting properties on the market, I expect they will increase the rate at which they list properties to take advantage of the uptick in sales volume and unload more properties.
Irvine Renter says:
“The uptick started in January even before the settlement was announced. I think the banks knew it was a done deal. The are working to clear out the shadow inventory, but they have a long way to go.”
There is generally an uptick in completed foreclosures every January because lenders impose a holiday moratorium during December. It might be the start of a new trend this time, but I’m betting if you compare the previous years Dec-Jan change you’ll see the same thing.
It turns my stomach that the NAr are relied on as a credible source for this kind of data.
One of my favorite economist bloggers even quotes their numbers without flinching. It makes me question his entire judgement, which blows as he has been very accurate over the years.
I could forgive the NAr if they were making an honest effort to be accurate. Unfortunately, they don’t. Their entire philosophy is centered around manipulating the numbers to make market conditions look better than they really are. Have you noticed every mistake they make is on the side of making the market look healthy and stable? That’s no accident. Since we know their motivations are bad, their numbers will always be suspect.
Ummm… if you look at the “revised data” after the month lag passes… November’s revised seasonally adjusted number was 4.39 million. The December revised data is 4.38 million. I may only be an architect, but I know that equals a -0.01 million or a 10,000 home sales DROP month to month if analyzing a rolling 12-month basis. How then are any of these so-called economists are seeing “gradual increases” in total home sales? Seems to me we are seeing “gradual decreases” in sales!!! Am I missing something here??
Boy, the resale values in South County just keep dropping month after month. Strategic Default coming to a Orange County city near you…
Who posted the Baltic Dry Index article?
Baltic Dry, Dr. Copper Flashing Warning Signs
By Carolyn Cui
But here are some signs that don’t square with the optimism exhibited in the markets – and we think they are worth examining.
Copper, which has been given the nickname “Dr. Copper” for being a bellwether for the health of the global economy, has quietly left the party early. The metal peaked on Feb. 9 after a failed attempt to break the $4-per-pound mark. It has since fallen about 5% to $3.81 a pound, while the Dow Jones Industrial Average has edged up 0.1% and earlier this week flirted with 13000.
Also, the Baltic Dry Index, which tracks the shipping rates for bulk commodities, had sunk to 647 on Feb. 3, the lowest level in more than 25 years, before recovering in recent days. Even though there is a glut in the freight markets, the fact that shipping companies now charge as much as they did in Aug. 1986 – when oil traded around $13 a barrel – is mindboggling. Only two months into 2012, the index has already lost nearly 60%.
Of course, copper and the Baltic index are more reflective of the global economy, rather than that of the U.S. Maybe this partly explains the divergence.
But if we are still living in an integrated world economy, what does this bode for the U.S.?
I’ve been noticing weird stuff in Zillow where a property that sold the year before will pop back up as active or pending a year or so later, even though it is not technically listed. I’ve also noticed where a house will go pending for a listed amount, and then shows withdrawn from Zillow, only to be relisted for a day with a higher sales price and then delisted the next day at that price — even though that is NOT what the property sold for. This is happening in TX where non-disclosure laws add a layer of opacity to the transaction, but I have followed this close enough and for long enough on various properties in my city that I see the discrepancies in the numbers.
Is this normal or is it a transparent attempt at manipulating # of houses sold/sale prices.
I will say, Redfin does not have the same issues.
[...] If You Think The RE Agent Is Lying…Can You Do This? (patrick.net) NAR continues to lie about sales (ochousingnews.com) Financial Executives Commit Fraud, Avoid Prosecution [...]