As disturbing as the fact is, I am far from being surprised - especially when the source has a vested interest in the data. As reported by Reuters, “The National Association of Realtors, which issues the monthly existing home sales report that is closely watched by economists and financial markets, may have over-counted home sales dating as far back as 2007.”
NAR's home sales count was at odds with calculations by CoreLogic, a California real estate analysis firm, according to the report. CoreLogic says NAR could have overstated home sales by as much as 20 percent. An over-count of home sales may mean that there is a bigger backlog of unsold homes and that it will take longer for the U.S. housing sector to climb out of the deep hole it is already in, dragging on the broader economic recovery.
The NAR said “the data could be revised downward this summer.” How timely and comforting.
In a much smaller scale and restricted to one zip code (77494), I have kept informal tabs on house prices and sales to gauge the health of the housing market. Why this zip code? Because I lived there. And while the national market was sinking, prices were rising in Katy, TX, one of the few hot spots in the country through the housing meltdown due to oil money flowing into this affluent Houston suburb. Since I left in 2009, prices have been under heavy pressure, and houses continue to be discounted, while oil prices have held at healthy levels.
Today, Case-Shiller added yet another sobering bit of data to the harsh reality with prices dropping 2.4%, continuing the discounting process that is far from complete. I don’t mean to look for the glass half-empty, only a healthy dose of reality.
In a conference call, Shiller and Case had differing views going forward. According to MarketWatch, Case "noted that existing home sales have come back after collapsing this summer when the home-buyer tax credit ended." Maybe he had not read the NAR article.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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