The double dip in home prices gains speed – as big problems emerge with national real estate sales data
Wow, now here's a doubleheader for you this morning.
First, Bay State home prices fell nearly 7 percent in January from a year earlier, down to a new median of $270,000, the Warren Group, publisher of Banker & Tradesman reports. Sales, by contrast, rose 5 percent year-over-year in January.
So maybe, just maybe, there is some significant relief on the way for the legion of frustrated buyers hoping to someday break into the still pricey Greater Boston market.
But an even bigger story is breaking nationally - concerns that national home sales stats may have been inflated by as much as 20 percent over the past few years.
Let's be clear - no one is accusing the National Association of Realtors of somehow "gaming" the numbers.
Now here's where I get called a shill for the industry, but I would rather stick to what we know now.
Rather, even those economists raising questions about NAR's stats say the problems likely stem from potential quirks in the way the industry group collects and assesses data, combined with the challenges of tracking sales in a market gone haywire.
Still, the trade organization has launched a review of its stats after CoreLogic and various economists have raised concerns about its sales numbers.
Basically, NAR's home sales numbers are far higher than Core Logic's.
NAR reported 4.9 million home sales in 2010, a drop of 5.7 percent from 2009. Core Logic, by constrast, tallied 3.3 million home sales last year, a drop of nearly 11 percent from 2009.
NAR's data is complied from a sampling of sales from Realtor-controlled multiple listing services across the country. However, there are potential gaps here, from a shifting lineup of MLS systems to the lack of coverage of sales handled directly by owners.
CoreLogic tracks sales through transactions filed at local courthouses - a system similar to that used by the Warren Group. That obviously has the advantage of catching this data directly - if you sell a home there is going to be a local government record of that.
I'll take the direct approach any day.
OK, so what does all this matter to homeowners and buyers stumbling through the worst real estate market since the Depression?
Well, a lot, frankly. If the market has been significantly weaker than reported, that has huge implications for very basic things like how long it will take to sell off all those foreclosure specials cluttering up the market.
Basically, all players in the market, buyers, sellers, brokers, may have been operating - possibly for years now - on a whole series of false assumptions.
Imagine the kind of additional downward pressure on prices we might have seen over the past few years had abysmal home sales actually been markedly lower?
Bad data, if anything, may be helping drag out an already epic downturn.
