town houses

Realtor Association Says It Overcounted Existing-Home Sales

In a rather drastic statistical error, the National Association of Realtors said that sales of previously occupied homes from 2007 to 2010 were a little more than 14 percent lower than it previously reported.

The group also said that sales of single-family houses, town houses, condos and co-ops in November rose to 4.42 million, their highest level in 10 months (after the revisions). The association noted, though, that a third of all contracts signed in the month did not lead to closed sales, a sign that buyers were still nervous and lenders were still being extremely cautious about approving loans.

Lawrence Yun, chief economist of the Realtors, said the organization had been noticing that its data showed higher volumes of sales than other indicators like records of property deeds and mortgage applications. It revised its data once the 2010 Census confirmed that the group had been overcounting home sales.

Data collection is a tricky business, and even government agencies can miss. In August, for example, the Labor Department reported that employers created no net new jobs, causing anxiety in Washington. The department later said that the number was actually 104,000 jobs.

In the case of home sales, the Realtors association collects its numbers from local multiple listing services, databases in which real estate agents share information about property sales. Generally, this data track sales only where the seller is represented by a real estate agent. The group has historically supplemented this data with projections about how many homes were sold directly by owners.

But Mr. Yun said that during the housing collapse, owners who might have tried to sell a home without help in better times had turned to real estate agents.

Another factor skewing the numbers is that the association typically assumes that virtually no new home sales come through real estate agents, because in good times, home builders generally cut out the middleman. But during the downturn, even homebuilders turned to agents. So some multiple listing services included sales of new homes, and the association effectively counted them twice.

Mr. Yun said that the revisions did not change the fact that the housing market appears to be slowly recovering and compared it to a car. “During the housing market bubble years, it was speeding at more than 72 miles per hour,” he said. “During the downturn, we thought the market was speeding at 50 miles per hour. However, now we’re finding that it was actually speeding at 40 miles per hour.” The promising news, he said, is that in November, the market sped up to “44 miles per hour.”

Economists seemed to accept the association’s explanation and said that at any rate, it did not alter history. “We know that we had a really disastrous housing market,” said Michael Shaoul, chairman of Marketfield Asset Management. “The least important number is how bad the decline actually was. The most important number is, are we getting better or are we getting worse?”

Diane Swonk, an economist at Mesirow Financial in Chicago, agreed that the market was improving. She said that the high rate of canceled contracts suggested that people wanted to buy homes but were just having trouble getting approved. “People are renting at a premium to what they would pay to buy, but they can’t qualify for mortgages,” she said. “So once you get real meaningful employment growth, it suggests that we could get a snapback.”

Ms. Swonk said that notwithstanding rampant revisions of government data, the public sector would be a more accountable and reliable housing statistician than an industry group. “I’ve known these statistical people for decades,” she said. “They’re bureaucrats. They don’t make up the numbers.”

This article has been revised to reflect the following correction:

Correction: December 21, 2011

An earlier version of this article misstated the revision in home-sales figures for 2007 to 2010. They were revised downward 14 percent, from more than 20.6 million to nearly 17.7 million, not 16.7 percent, from nearly 17.7 million to 14.7 million.

Article source: http://feeds.nytimes.com/click.phdo?i=763dc3725260f346e834c3553c96620d

Leveraged Moveouts in New York

Now, with property values under pressure and the rental market on fire, they are trying a new move to pull value out of their homes without selling: they are renting out their roomy apartments and stately town houses for high prices and moving into cheaper, more modest quarters.

The owners of these places have set aside anxieties about leaving their homes and the potential for property damage, preferring to focus on the upside: sizable profits.

“People are willing to pay astronomical rents, especially for elegant New York City properties,” said Gary Malin, the president of Citi Habitats. “There’s a huge demand for luxury rentals, but also a lack of inventory, especially because there’s so little new construction.”

One businessman has moved his family from a grand SoHo loft to a cramped two-bedroom in the West Village so that he can afford to spend a couple of years starting a business. In Brooklyn, owners of elegant brownstones and graceful Victorians are turning their houses into bed-and-breakfasts.

“These places allow people to rent the dream of New York City living,” Mr. Malin said. “Compared to living in a white box in a glass tower, these places feel much more like home. There’s more charm and character, more intimacy. A town house that’s been renovated and furnished is a unique home, with lots of character. Many of these places are offered fully furnished, so it’s like walking into a lifestyle. It’s like living in a movie set.”

Seven years ago, Michael and Christine Belotz bought a 3,000-square-foot loft on Grand Street in SoHo, a three-bedroom space with a library and a sunken master bedroom, and accented by soaring ceilings, oversized windows, freestanding columns and maple floors. A rainbow assortment of mosaic tiles decorates the bilevel great room; painted Mexican tiles brighten the artist’s studio; and brilliant blue Turkish tiles form the backsplash in the kitchen, which has a breakfast bar.

“We thought we’d live there forever,” said Mr. Belotz, who is 49 and used to work as a research director for a hedge fund. But a few weeks ago, the couple put the loft on the market as a furnished rental for $12,500 a month, and moved with their two young sons to a 1,000-square-foot two-bedroom in the West Village, for which the rent is $4,200.

“It’s a much tighter squeeze,” Mr. Belotz said, “especially with two little boys. But the financial upsides are considerable. The rent we’ll get from the loft equals the mortgage and maintenance on the old apartment, which is about $8,000 a month, plus the rent on the new one.”

If they get what they are asking, Mr. Belotz, who was laid off from his job two years ago, will be able to pursue a professional dream — helping start an investment management firm.

“I needed to make sure money wouldn’t be a problem down the line,” said Mr. Belotz, who plans to stay in his new place a few years. “The pieces all came together. Our place is by far our biggest asset, and we wanted to find a way to monetize it. It’s a little crazy here right now, and I definitely miss the loft. But I feel good about the decision.”

This kind of rental phenomenon is still somewhat under the radar, especially in Brooklyn, where some owners are renting out their brownstones for a year or two, and others are converting their homes to bed-and-breakfasts.

The presence of a high-profile tenant can make an owner tight-lipped. Sometimes the owner has moved into a sublet that isn’t exactly legal, or worries that the decision to rent out all or part of a house will be perceived as a last-ditch effort to avoid the sheriff. Still, when an owner turns landlord, the news spreads fast over stoops and backyard fences.

“I know a few people who have done this,” said Sharon Barnes, a former board member of the Society for Clinton Hill, a Brooklyn community group. “People bought when prices were very high, and didn’t realize they were in the midst of a bubble. They sometimes stretched as much as they could to buy the properties, and when the market started to soften, the mortgage and tax payments became extremely challenging.

Article source: http://feeds.nytimes.com/click.phdo?i=bd549a163bf8a1aeb05f3f15c64cc497

Realtor Association Says It Overcounted Existing-Home Sales

Leveraged Moveouts in New York

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