Why I Wouldn't Play Golf Against The NAR Reporting Staff

The headline might make you wonder how the game of golf could in any fashion relate to NAR real estate reports. Sadly, the parallels are very evident these days.

Sandbaggers in golf are the most vile of creatures, artificially inflating their handicap in order to hustle the competition, usually with the intent of winning a bet.

In order to allow golfers of differing capabilities to compete with each other, a handicap system was established which relies on each golfer's recent scores to determine an index that for the most part, is very effective at leveling the playing field for all parties.

Until somebody cheats.

A golf sandbagger will change past scores to reflect poorer play, so that current competitions allow for a higher index and thus a better chance at winning bets.

NAR Real Estate Reports

A few months ago, our National Association of Realtors quietly announced that they were revising past NAR real estate reports due to incorrect methodologies of guessing how many homes were actually selling across the country.

This sandbagging method has allowed current NAR real estate reports to appear better than previous years, and I suspect they will be revised again later so that next year's reports show continued signs of improvement.

Recommendation: Do not play golf against Lawrence Yun (if it is a handicapped match).

Mining NAR Real Estate Reports

That is not to say that all portions of NAR real estate reports have no value.

In this month's Existing Home Sales report, NAR shared:

First-time buyers rose to 35 percent of purchasers in April from 33 percent in March; they were 36 percent in April 2011. All-cash sales fell to 29 percent of transactions in April from 32 percent in March; they were 31 percent in April 2011.

In other words, 64% of the market were comprised of people who were not encumbered with a home to sell in order to make a move, thus 36% of the buyers had a home to sell. This is lower than historical norms (in Tallahassee) and it represents the part of the housing market this is going to have the most difficulty in recovering.

What I Would Like To See NAR Address

Home values have dropped across the majority of US housing markets. In Tallahassee, home values have reverted back to levels last seen in 2003, and the lost equity is having a huge impact on people who want to move but are trapped in their homes.

Think of the number of homeowners who have purchased or refinanced since 2003. In Tallahassee, the dominant loan has always been FHA/low money down, therefore the majority of these purchases and refinances commenced with no equity in the homes.

We are continuing to see values drop, and each percentage point brings thousands of more "upside down homeowners," and the ones that want to move are trapped.

This is a growing segment of our "normal" buyer pool, thus the buyer pool is shrinking. I have yet to see NAR real estate reports address this, and I think it is important enough to warrant some of their time.

Joe Manausa, MBA
Century 21 Manausa & Associates
www.manausa.com

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