So CoreLogic releases a report in which it claims that NAR’s widely used Existing Home Sales stats are total garbage:
CoreLogic reported sales totaled only 3.6 million in 2010, down 12 percent from 2009. By comparison, NAR reported sales fell only 5 percent in 2010 after rising in 2009, and were flat relative to 2008. CoreLogic said sales did not actually rise in 2009.
In data/stats terms, a 7 percent difference is pretty much the same thing as saying “yer dead wrong, pal”. And saying uh, no, sales did not rise in 2009 is more or less saying, your dataset is garbage. And from Agent Genius, we get:
According to CoreLogic’s Housing and Market Trends Report, the National Association of Realtors’ existing home sale reports for the past ten years have been “overstated,” and that in 2010, NAR overstated sales 15% to 20% higher than actual sales.
15 to 20 percent higher than actual. Wow. Them’s some harsh words.
And NAR’s response? Well, they released this Q&A in which NAR says things like:
Q: How can NAR sales data drift away from true measure?
A: It is not definitive if NAR data has a measurable drift other than normal small statistical noise that may arise from not using all MLSs and from any data entry error or local MLSs sending wrong data to NAR. In statistics, one just assumes the positive and negative noises cancel each other out. However, it is possible for this statistical noise to drift mostly in one direction and hence cumulatively add up over many years. In our last benchmark in year 2000, we found the reported home sales had a 13 percent upward drift compared to what Census data implied. NAR then revised the past 1990s data to match up with the Census data. (Emphasis added)
Uh, so in other words, CoreLogic is right that NAR data is completely unreliable by the end of the decade? Or how about this:
Q: How accurate is CoreLogic data?
A: Its data comes from courthouse recordings. It makes some assumptions about non-covered areas. Because of improved electronic recordings, it claims to capture more data and more quickly than in the past. Right now, CoreLogic and NAR data differ. However, it is unclear which is more accurate. Only a new benchmarking with 2010 Census can resolve the issue.
But you just got finished saying that in 2000, your reported home sales data was off by 13%. Has CoreLogic had to revise their data every ten years like you did?
Q: When will the new benchmarking take place?
A: In 2010 Census, a long-form questionnaire was not used. Therefore, the Census no longer asked about whether people moved and bought a home. So another brand new benchmarking process is needed. NAR has already been in contact with all key housing economists in the industry and government agencies and a few in the academia about finding a new benchmarking process. We expect a new clean, agreed-upon benchmark figure by the summer of this year.
In addition, we will be determining a new way to re-benchmark on a more frequent basis, possibly annually to lessen any drift that can accumulate over time. This frequent re-benchmarking, rather than wait every 10 years, is needed since the Census no longer collects the long-form questionnaire. As with all benchmarking, we will be working with various outside housing economists to develop a new-agreed upon method.
Is it me or does this sound a whole lot like, “Well, see, actually right now, we have no way of benchmarking our data to know if it’s any good or not, and since the 2010 Census doesn’t actually collect home buying information, we’re kinda screwed. We’re talking to a lot of really smart people to see what we can do, but that will take a few months.”
Unless I’m very, very mistaken, this is essentially an admission that while CoreLogic has some factual basis for its data claims — those courthouse records — NAR has nothing right now to know if its data and conclusions are connected to the real world.
All I can say at the moment is… wow.