Wednesday, December 21, 2011

NAR Revises the Great Housing Decline

Today, the National Association of Realtors (NAR) released a major benchmark revision to their existing home sales data resulting in notable downward revisions to all monthly results from 2007 and beyond.

While the Realtors were quick to point out that the “month to month characterizations of market conditions did not change”, the data certainly did with the trends post-bust now looking much more severe and a fair amount more consistent with what was reported for the new home market.

Of course the NAR suggests that there are a number of factors that contributed to the previously inflated results including growth in MLS coverage, FSBO related distortions and geographic population shifts.

Looking at the chart above (click for full-screen version) that compares the data pre and post-benchmark revisions, you can see that what the NAR is purporting to be the trend now looks substantially weaker and shows that the housing decline was notably more severe than previously reported with seasonally adjusted annualize home sales falling from a peak level of 7.25 million units in 2005 to just over 3.45 million in 2010, a level first seen in the early 1990s.