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.
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