Existing-home sales rose again last month, according to data released Wednesday by the National Association of Realtors(NAR).
That assessment, however, is coming off of lower sales numbers than previously thought, reflecting revisions to NAR’s data going back to 2007. The trade group has adjusted sales and inventory figures for the last four years downward by 14.3 percent, signaling the housing crisis has run even deeper that earlier assumptions.
NAR’s latest monthly report shows sales of previously owned homes increased 4.0 percent to an annual rate of 4.42 million in November from 4.25 million in October, and are 12.2 percent above the 3.94 million-unit pace in November 2010.
Total housing inventory at the end of November fell 5.8 percent to 2.58 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace, down from a 7.7-month supply in October.
The national median existing-home price was $164,200 in November, down 3.5 percent from a year ago.
Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 29 percent of November’s sales (19 percent were foreclosures and 10 percent were short sales), compared with 28 percent in October and 33 percent in November 2010.
Although re-benchmarking resulted in lower adjustments to several years of home sales data, NAR says the month-to-month characterization of market conditions did not change.
Lawrence Yun, NAR’s chief economist, says November’s report indicates more people are taking advantage of the buyer’s market.
“Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010,” Yun said. “We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans.”
NAR also stressed that there were no revisions to home prices or month’s supply.
“From a consumer’s perspective, only the local market information matters and there are no changes to local multiple listing service (MLS) data or local supply-and-demand balance, or to local home prices,” Yun said.
A divergence developed over time between sales reported by MLSs and sales determined by a U.S. Census benchmark, with the variance beginning in 2007, NAR explained. The trade group cited growth in MLS coverage areas from which sales data is collected and geographic population shifts as reasons for the divergence.
“It appears that about half of the revisions result solely from a decline in for-sale-by-owners (FSBOs), with more sellers turning to Realtors to market their homes when the market softened,” according to Yun. “The FSBO market was overwhelmed during the housing downturn, and since most FSBOs are not reported in MLSs, national estimates of existing-home sales began to diverge based on previous assumptions.”
NAR’s says its 2010 benchmark shows there were 4,190,000 existing-home sales last year, rather than the 4,908,000 sales previously projected.
Revisions covering 2007 through 2010 are expected to have a “minor impact” on future revisions to Gross Domestic Product (GDP), according to NAR.