Archives for December 2011

Oops – NAR overestimated real estate sales by 14%

The National Association of Realtors says it overestimated home sales by more than 14 percent since 2007 because an adjustment that the trade group makes to data it collects from multiple listing services to account for sales that take place outside of MLSs got out of whack over time.

NAR says it’s fixed the problem and “rebenchmarked” statistics going back to 2007, when it said its adjustments began to diverge from previous assumptions about how many sales take place outside of MLSs.

The trade group blamed much of the problem on a decline in “for sale by owner” sales — properties not represented by real estate brokers and therefore not listed in an MLS.

NAR said consumer survey data show FSBOs accounted for 9 percent of sales in 2010, down from 16 percent in 2000.

“Some property listings on more than one MLS, and issues related to house flipping, also contributed to the downward revisions.”

After rebenchmarking 2010 data, NAR now says there were 4.19 million existing-home sales last year, down 14.6 percent from the 4.9 million sales the group previously reported. For 2007 through 2010, sales and inventory were 14.3 percent less than previously reported, the group said.

NAR said the rebenchmarking doesn’t affect previously reported median home prices or months’ supply of homes for sale. Previously reported month-to-month trends in housing sales were also unaffected, because sales for each month have been revised downward.

Although rebenchmarking will also be done at the state level, data reported by local MLSs and Realtor associations is still valid, because those numbers are published before they are adjusted.

NAR’s national statistics are important to economists, policymakers and others who make decisions based on macro-level data including national home sales.

The benchmark revisions, for example, will require the U.S. Bureau of Economic Analysis to make a small downward adjustment to its estimates of national gross domestic product (GDP). That’s because the bureau relies on NAR’s existing-home sales figures to estimate real estate brokers’ commissions on the sale of residential structures, most recently pegged at $55.5 billion a year, down from a peak of $109.9 billion in 2005. 


In short, the stats below would indicate that the market is stabilizing.   Sales are up, inventory is down, foreclosure sales are down.  All indications are that we are, ever so slowly, moving towards a stable market.

The latest, rebenchmarked data from NAR shows existing-home sales increasing by 4 percent from October to November, to a seasonally adjusted annual rate of 4.42 million homes — a 12.2 percent increase from a year ago, when homes were selling at a pace of 3.94 million units a year.

Housing inventory was down 5.8 percent from October to 2.58 million existing homes for sale, a seven-month supply at the current sales pace. Inventories peaked at a record 4.04 million in July 2007, NAR said, citing the rebenchmarked figures.  A six-month inventory is a balanced market.

Distressed homes, including short sales and homes repossessed by lenders, accounted for 29 percent of sales in November, down from 33 percent a year ago. NAR said 19 percent of home sales were lender-owned properties and 10 percent were short sales.

All-cash sales — mostly to investors — accounted for 28 percent of existing-home sales, down from 29 percent in October and 31 percent at the same time a year ago.

Regionally, existing-home sales in the Northeast were up 9.8 percent from October to an annual pace of 560,000, a 7.7 percent increase from a year ago. The median price in the Northeast was $240,200, down 0.1 percent from a year ago.


Holiday Pajama and Book Drive

Century 21 Commonwealth is sponsoring a pajama and book drive for needy children.  Many needy children have never owned a pair of pajamas.  Every child deserves sweet dreams, so any donations are greatly appreciated.  Pajamas for older children are most needed.

You can either contact me for a pick up or drop off at our office at

64 Needham Street
Newton, MA 02461

Thank you!

Century 21 Commonwealth
CELL: 617 584-3904

Pajama and Book Drive

Century 21 Commonwealth is sponsoring a Pajama and Book drive for needy children.  If you would like to help you can drop off new PJs, Books, or both at

64 Needham Street
Newton, MA 02461

If you’d prefer, I would be happy to pick up as well.

Happy Holidays!!

Home Prices Expected to Stagnate at least through 2013

Economists polled by Reuters are predicting that prices will stay stagnant through 2013.   If you recall, I’ve been predicting that it could take another 5 years, so  I am certainly not going to argue with this assessment.  BUT, I would say that here in the Greater Boston area, I am actually seeing a shortage of inventory.   Because sellers here are not underwater or in the dire straits that homeowners in other parts of the country find themseves,  more sellers here are sitting on the sidelines waiting for the economy to get better.  So we have this strange dynamic where there is less than 6 month’s inventory in most towns around Boston (which would normally make it a seller’s market).  But buyers are opting to wait until the right house comes along, choosing to rent (or continue renting).  So house sales are solid now, but the market bears no resemblance the frenzy we saw back in the early-mid 2000s.


 The housing market, considered by many as critical to any meaningful economic recovery, is still struggling to find its footing after collapsing by a third over the past several years, leaving many owing more than their homes are worth. The poll of 27 analysts taken Nov. 17-22 was more downbeat than a survey taken two months ago, which predicted small home prices rises next year of less than 1 percent on average. With an excess of unsold homes holding prices down and more foreclosures expected, lawmakers and experts have floated various options for propping up the market until the economy improves and Americans start buying homes again. But most of the economists polled were sharply critical of two of the main proposals: more purchases of mortgage-backed securities (MBS) by the U.S. Federal Reserve ; and a reduction in loan principal for struggling homeowners. “We see little prospect that any policy action will meaningfully impact the housing outlook over the next year,” said Sam Bullard, senior economist at Wells Fargo. “Unfortunately, a sustained improvement in housing will not likely get underway until the mountain of foreclosures is cleared and the price discovery process plays out. The Fed, which has effectively run out of interest rates to cut, has already bought more than $2 trillion in long-term securities to keep rates low. It has said it is considering the possibility of additional MBS purchases. Economists said another round of such purchases from the central bank would be limited as already low mortgage rates have done little to spur home buying. Just seven analysts said more MBS purchases would make a material difference, while 20 said they would not. As well, 19 out of 26 who replied said prices could eventually recover without a major program to write down principal payments. Opponents of such a scheme argue it would come with a hefty price tag, and such a measure would likely be politically sensitive heading into an election year. Advocates say it’s the only way to head off another wave of foreclosures by keeping underwater borrowers in their homes and will speed up the recovery. Seven economists said house prices would not recover without a writedown plan. “Unless there is principal reduction, the only cure for the housing market is time — lots of it,” said Paul Dales, senior U.S. economist at Capital Economics. “It will take years of modest house price appreciation for households to climb out of negative equity. Until that happens, demand will remain weak.” Home prices as measured by the S&P/Case-Shiller home price index are expected to finish out this year down 3.3 percent compared with the 3.8 percent decline forecast in the September’s poll. But prices are seen slipping 0.3 percent next year compared to September’s forecast for a 0.8 percent gain. Prices are expected to rise a meagre 1.5 percent in 2013. Eighteen economists said they see prices bottoming in 2012, with 12 of those expecting it will happen in the first half of the year. Just one economist each said a bottom won’t be found until 2013 and 2014, while 7 said it has already happened. Expectations for existing home sales were unchanged at 4.95 million homes for the fourth quarter, while analysts modestly lowered their forecasts for the first quarter to an average annualized rate of 5.03 million homes from an earlier forecast of 5.10 million homes.