My work is all about data and what it can tell us. So I know that numbers aren’t always what they seem, and they are often misleading either as an accident or part of a larger agenda.
The National Association of Realtors (NAR) announced today that it will be restating home-sales data going back to 2007. (Hey, isn’t that when the housing market started to tank? That’s a coincidence.)
“The Chicago-based organization has known for a long time that the existing home sales data it releases to the public each month were significantly inflated. It knew that it was double-counting, miscounting and relying on outdated census results that pumped up its report on housing activity.”
Chicago Tribune, 12/21/11
Obviously the NAR has a vested interest in making the housing market look as robust and healthy as possible. They have also concocted a tenuous metric named the “Pending Home Sales Index“. It is “designed to be a leading indicator of housing activity. The index measures housing contract activity. It is based on signed real estate contracts for existing single-family homes, condos and co-ops.” My suspicion is that this index was designed to divert attention from the relentlessly bleak news surrounding the current real estate market, by looking to potential events in the future.
This is a good lesson to look behind the door when a new study or data gets released, and see what is gained by the organization which releases or produces it. This is especially important regarding a think tank or trade group, but numbers are also certainly (and regrettably) spun by govermental organizations.