Lawler on NAR: The “Curious Case” of Existing Home Sales in the South in April

From housing economist Tom Lawler:

The National Association of Realtor’s preliminary report on existing home sales in April came in well short of both consensus and those who track local realtor/MLS reports. For analysts in the latter category, the biggest “surprise” in the NAR’s sales estimates was in the South region: the NAR estimated that existing homes sales in the South this April were up just 2.9% on a not seasonally adjusted basis from last April’s pace, well below what one would have expected basis on local realtor/MLS reports. Below is a compilation of various home sales reports based on publicly-available realtor/MLS reports from various parts of the South region. Many of the reports are statewide estimates for MLS sales, though that is not the case for some states (noted below).

Based on these publicly-available¹ home sales reports, it seemed reasonable to conclude that the NAR’s estimate of existing home sales in the South region would show a YOY increase of about 10%, and normally the aggregated regional reports and the NAR estimates are “reasonably” consistent. That was clearly not the case last month.

There are several things I should note. First, some (though not all) of the local realtor reports include new home sales. Second, many of the local realtor reports compare preliminary sales data for the latest month with “final” data for the same month of the previous year (.e.g., South Carolina, Virginia, and Oklahoma). NAR reports, in contrast, compare “preliminary” data with “preliminary” data for earlier months. In these cases the “actual” YOY increase in sales is generally slightly higher than shown in the latest report. Third, the NAR’s sample does not incorporate statewide data, but instead is based on a smaller sample (mainly metro areas) that the NAR says reflects about 25% of all sales. And finally, some local realtor reports may not “scrub” the data for errors as rigorously as does the NAR.

Still, based on a very wide range of local realtor/MLS reports from the South, I’m am fairly confident that the NAR’s estimate of the YOY increase in existing home sales in the South in April significantly understated the ‘actual' YOY gain.

	4/1/2015	4/1/2014	% Chg
Alabama ( statewide compiled by Alabama Center for Real Estate)	4,289	3,596	19.3%
Arkansas Association of Realtors	2,567	2,425	5.9%
Delaware (Local Realtor Reports, all counties)	884	809	9.3%
D.C. (MRIS)	711	635	12.0%
Florida (FloridaRealtors)	36,849	32,151	14.6%
Georgia (thru GAMLS)	8,104	6,975	16.2%
Kentucky (Louisville, Lexington-Bluegrass areas)	2,287	2,074	10.3%
Louisiana (Baton Rouge)	778	808	-3.7%
Maryland Association of Realtors	5,990	4,985	20.2%
Mississippi (Jackson, Gulf Coast)	755	788	-4.2%
North Carolina Association of Realtors*	10,549	9,565	10.3%
Oklahoma Association of Realtors	3,664	3,753	-2.4%
South Carolina Association of Realtors	6,112	5,498	11.2%
Tennessee (Knoxville, Memphis, Nashville areas)	5,137	4,718	8.9%
Texas (statewide compiled by Texas Real Estate Center)	25,907	24,585	5.4%
Virginia Association of Realtors	8,886	8,467	4.9%
West Virginia (none)
Total of Above	123,469	111,832	10.4%
NAR, South Region	180,000	175,000	2.9%
*excludes Brunswick and Washington/Beaufort, for which the NCAR shows “N/A” for April 2014

¹ Many of these reports are not easily found, but they are available if one knows were to look.