Last week, the National Association of REALTORS (NAR) reported existing-home sales rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from 4.49 million units in January. The news from the South was even better. The region’s existing-home sales outpaced the national average, rising 6.1 percent.
Compared to February 2008, the picture was not so rosy. The national average for February 2009 was 4.6 percent below February 2008, and it was worse in the South, which was off 11.2 percent.
Media ran this March 24, sometimes as their lead headline. Unfortunately, none of these figures is completely accurate. In fact, no such reports from the NAR, which is the only source for current national, regional and state real estate data, ever is.
It is not that the NAR spits out inaccurate data. Its methodology is sound. The problem is not with the NAR, but rather with the many challenges it faces when compiling its reports, not the least of which is incomplete information.
The gist of the matter is that the NAR is somewhat at the mercy of local associations/boards and multiple listing services (MLS) nationwide. These organizations are not required to supply data. And, a surprisingly large number of these organizations do not participate.
On its Web site, the NAR says: “Each month, the Research Division of the NATIONAL ASSOCIATION OF REALTORS receives data on existing-home sales (single-family, condos and co-ops) from local associations/boards and multiple listing services (MLS) nationwide. NAR captures 30%-40% of all existing-home sale transactions with its monthly survey.
“The methodology in calculating existing-home sales statistics is really quite simple. The monthly EHS (existing home sales) economic indicator is based on a representative sample of 160 boards/MLSs. The home sales data (raw data) is divided into the four census regions: Northeast, South, Midwest and West. The raw sales volume from the participating boards/MLSs is carefully evaluated by NAR economists to ensure accuracy.”
The NAR goes on to point out that there are possible problems with the data, including “lack of response by associations/boards.” Thus, “once the ‘problematic data’ have been extricated from the sample, the aggregated raw volume figures are weighted to accurately represent sales activity for each region of the country.”
Considering all of this, the NAR does a great job in supplying the most reliable data possible. Still, it continues to encourage boards and associations and MLS groups to release its data to make its reports more accurate. The NAR says this would not only benefit the public, but the industry, too.
The NAR Web site says: “The NATIONAL ASSOCIATION OF REALTORS issues the Existing Home Sales (EHS) Report on a monthly basis to provide accurate and timely information on the state of the U.S. housing market. The EHS Report provides a basis for our membership to understand housing trends and is widely reported by the national press. In addition, the Report enhances the effectiveness of NAR’s political and representational efforts on behalf of our members on Capitol Hill.
“We need your help! In order to expand our coverage of existing home sales to ensure that it is representative of national activity, we need your help! While there are over 500 Local Associations/MLS who already participate in the survey, we are continuously looking to expand and update our survey to provide the best data we can for you.
“To improve our coverage of home sales in your state or local area, we would like to invite all Local Associations/Boards/MLSs to participate in NAR’s monthly EHS survey. In many cases, all that is required is to press a button to update the form and complete the data submission.
“Why send data to NAR? Improve the quality of your area’s housing statistics and market reports. Continue to establish that you are the credible source for housing market information in your area. Expand and elevate the credibility of the REALTOR name and brand. Provide value-added information to REALTOR members and the housing industry.”
The lack of response by local associations does not necessarily mean they are ignoring the report’s importance. Mississippi has 21 local associations, many dedicated to just one, small community. A lack of resources makes participating in the NAR’s surveys a challenge.
The NAR could not supply which local associations in Mississippi responded. One that did was the Jackson Association of Realtors (JAR).
Jo Usury, executive officer of the JAR, said, “All real estate is local, and our market should not be compared to real estate in other markets. As the largest Realtor association in the state, we provide our market’s housing statistics to the National Association of Realtors for inclusion in their quarterly statistical report by state.
“We are proud of the fact that the Jackson area has not experienced the dramatic price highs and lows that other areas of the country have experienced. Reporting our area statistics demonstrates our pride in our market and the fact that our market is moving.”
Contact MBJ staff writer Wally Northway at firstname.lastname@example.org.