NAR's Yun Blames Inflated Sales Figures on Duplicate Counting of Closed Sales

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Real Estate Broker/Owner with Madeline Island Realty 50317-90
https://activerain.com/droplet/pVT

 

NAR's Lawrence Yun Blames Inflated Sales Figures on Duplicate Counting of Closed Sales

 

The National Association of Realtors revealed this week that estimates of previously-owned home sales have been inflated, due in part to "double counting".

The practice of double counting can be attributed to multiple MLSs reporting the same closed sale.  NAR Chief Economist Lawrence Yun mentioned the Denver, Colorado area real estate market as an example of duplicate reporting of home sales.

We see the same situation in northwest Wisconsin, where some properties appear on multiple MLS systems.  In an area like ours, it isn't uncommon for agents and brokers to list a property on more than one MLS.  For example, SAAR (the Superior Area Association of Realtors) came onto the scene several years ago and a considerable number of brokerages in Douglas, Ashland and Bayfield County decided to join.  But many northwest Wisconsin agents continue to belong to the Northwest Wisconsin MLS (in Eau Claire) and still others belong to NorthstarMLS in the Twin Cities and western Wisconsin greater metropolitan area, which includes the Minneapolis - Saint Paul metro and border counties in western Wisconsin.

The practice of double counting (or duplicate counting) reveals one of the most glaring areas where multiple listing systems need to be reformed on a nationwide basis.  I'm not saying that an agent or brokerage should not be able to put listings on more than one MLS, only that a single listing number and entry for any listing should appear on Realtor.com and in any national database of listings or sales. Dwelling addresses should be cross-checked in order to ensure that a sold property is not showing up twice in MLS statistical data reporting. 

Evidence of the duplicate counting problem also shows up in places like Trulia and Zillow, where it is not uncommon to see multiple entries for the same listing address in a search for area properties.

 

 

 

 

 

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Randal Jenkins 12/19/2011 02:38 AM
Topic:
Mortgage / Finance
Tags:
nar
national association of realtors
minneapolis
bayfield county
northstar mls
northwest wisconsin
duplicate reporting of home sales

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Rainer
379,095
Kate Akerly
Kaminsky Group - Manhattan Beach, CA
Manhattan Beach Residential Sales

If the NAR is relying on such data, it shows that it's systems are serverely flawed.  First of all, MLS's do not come close to accounting for a complete and accurate picture of the national market.  For example, in NYC - the largest market in the country - MLS's account for a relatively small percentage of the total available listings.

Secondly, in many markets open listings are listing repeatedly on multiple advertising platforms.  For example, some builder or investor listings are made available to multiple brokers.  Each tries to list it on the major listing platforms, though they are all for the same property.

Dec 19, 2011 03:20 PM #91
Rainmaker
424,950
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

Jeremy, you're probably right that there may always be sources of counting error.  But there must be a way to tighten things up to the extent that the margin of error should be reduced to, say 1% or less.

Kerissa - Your point is well taken.  That is why I've been asking (above) where the AEs are to respond about the idea of MLS reform.  If Association Executives are not planning on addressing this problem during the 2012 Midyear Meetings, they should be.

Yvonne, your comment is excellent.  In northern Wisconsin, I've seen all the situations you described, including misspelled street names or transposed numbers, and "back pocket" listings that never find their way onto MLS.  I agree that "pinched local budgets" (as well as more lax standards of practice in low population density counties and regions) are a contributing factor.  Now that NAR has discovered the relative unreliability of these statistics, they should consider adding a host of disclaimers to any published information, at least until they figure out how to improve accuracy.

 

 

Dec 19, 2011 04:16 PM #92
Rainmaker
424,950
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

Marcy, any margin of error over 2-3% is inexcusable.  They should at least strive to match the reliability percentage of a typical public opinion poll.

Danny - Mr. Yun's choice of words in the statement you quoted is certainly puzzling..

John, I wonder if anyone in the NAR economist role would be very well-liked in a housing climate like the one we're experiencing.

Dennis - This issue will test the resolve of folks at state and local associations.  And the public is watching.  If Realtors are serious about the need to provide accurate and reliable data, they need to saddle up and make some changes.

David - I'm tempted to attribute the longevity of this problem to just plain laziness.

Kimo - GREAT comment.  When this issue first surfaced, most of the discussion was about blaming Lawrence Yun for everything.  Now I believe most agents realize that the answer isn't as simple as blaming one person.  2012 NAR President Moe Veissi has twelve years experience on the NAR Board and he understands both the NAR hierarchy and the need for accurate statistical reporting from that organization.  My guess is that he'll make a genuine effort to solve this problem.

Dec 19, 2011 04:31 PM #93
Rainmaker
424,950
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

Jeff - I'm skeptical about any suggestion that NAR is in the back pocket of the Obama administration.  If you take a look at where RPAC money is going, it sure doesn't look like our trade association is bending over backwards to make the administration look good.

Local boards are Boards of Realtors.  MLS organizations and their staff are drawn from the Realtor community and governed/staffed/trained by Realtor AEs.  I'm puzzled by the argument that Realtors should know better than to trust other Realtors..

Dec 19, 2011 04:38 PM #94
Rainmaker
424,950
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

Jennifer - I'm a believer that the gatekeepers gathering this data have been inattentive and lacking in the will to fix the problem.

Lehel - Let's hope Southern California will become a model for change in the way that MLS data is handled!

Marte - Our National Association has placed its reliance entirely upon data generated by our state and local area Associations.  A chain is no stronger than its weakest link..

Debbie, I'm hopeful they'll be resetting that benchmark!

 

Dec 19, 2011 04:44 PM #95
Rainmaker
424,950
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

Hillary - There's an element of wishful thinking behind all the purported "good news", isn't there?

Denise - Auditing those numbers would cost money.  There's been too much reliance on these unproven statistics.

Susan & Charlie - And that is exactly why agents and brokers are so upset about all this.  The buck stops with us, as far as the public is concerned.  They don't want to hear about NAR.  They will be more likely to shoot the messenger, since we are the ones who deliver the news.

Dec 19, 2011 04:48 PM #96
Rainmaker
424,950
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

Bob - NAR is a very slow-moving juggernaut.  They've been so concerned about fighting the loss of the mortgage interest deduction that other concerns have apparently gone unnoticed.  I wouldn't expect any quick fixes or draconian measures.  Besides, who'd get fired?  If the data coming from MLSs all over the country is flawed, how's NAR going to clean that many houses at the same time??

Peter - Ditto to what I wrote Bob above..

Dec 19, 2011 04:52 PM #97
Rainmaker
424,950
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

Ken - Whether it's 20% or 13% or even 5%, it's too high a percentage of error.

Ardell, I hope someone at NAR is reading your suggestion.  I know that Stacy Moncrieff at Realtor Magazine follows a number of ActiveRain blogs. 

Harrison, I hope NAR starts paying attention to what's going on in Orange County!

 

Dec 19, 2011 04:57 PM #98
Rainmaker
424,950
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

Cheryl, it sounds like you've got a great topic for a blog post there! 

Chris - This is a mess which has splattered all over everyone in the industry, including our NAR Chief Economist.

Evelyn, somehow that is not surprising to me.

Michael, I'm a fan of the idea of replacing overlapping local area associations with state associations.  But I'm betting there are control issues involved which will interfere with that idea.

Dec 19, 2011 05:03 PM #99
Rainmaker
424,950
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

Barbara, those are classic examples of duplication that should be the subject of an investigation by NAR.

Margaret, apparently it never occurred to lots of other folks too.

Brian, I agree it's not the end of the world.  I believe agents are mostly worried that they public will blame them for the mess.  As a result, you'll notice lots of anger directed at Lawrence Yun and the leadership at NAR.  I think the MLS system is fixable.  We'll just have to see if local and state associations have the desire to roll up their sleeves and do what's necessary.

Dec 19, 2011 05:09 PM #100
Rainmaker
424,950
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

Gene - As I said much earlier today, it's a problem not only from the top down, but from the bottom up.

Jack, maybe there's some way to reconcile MLS statistics with data provided by counties.  In the meantime, this is a very imperfect system of generating useful data that has meaning for the consumer.

Olga - I'm guessing that NAR and its sub-organizations will find there's nothing easy about fixing this problem.

Victoria, the problem of reporting (or the lack of it) in low population density areas is another factor.

Judi, they may have been aware that the data was imperfect, but that didn't generate enough interest to do anything about the problem, did it?

Bob - I'm not sure there's anything to be gained by automatically assuming NAR has evil motives behind this statistical goof-up.

Winston - Relying upon statistics can be pretty risky, yes?

Michael, let's see what NAR has to say about that as this unfolds..should be interesting!

Dec 19, 2011 05:19 PM #101
Rainmaker
424,950
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

Steven - Sounds to me like a recipe for confusion!

Mike - It would be interesting to be a fly on the wall at a NAR meeting about this matter.  We may never know who finally gets the blame for this problem.

Dec 19, 2011 05:22 PM #102
Rainmaker
508,351
Sylvie Stuart
Realty One Group Mountain Desert 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagsta

It is interesting they can't filter out by address, since there is only one address by sale. Trulia and Zillow are so far behind in many aspects of accuracy. I have 2 sold listings that I keep changing to sold that pop up as active again every week. No wonder consumers are confused!

Dec 20, 2011 12:04 AM #103
Rainer
11,557
Dan Krell
RE/MAX All Pro - Bethesda, MD
Get the Facts Without the Pressure!

Hi Eric, yes double listings is only one issue, however it's not the double listings per se but the increased frequency of double listings among other things that account for Data Drift. The problem that has been encountered is one of a statistical methodology in compiling and analysis of data. Here is a rudimentary explanation of data drift and implications to housing stats: http://dankrell.com/blog/2011/12/20/understanding-the-revision-of-home-sale-statistics/

The best guide to home sales is staying hyper-local.

 

Dec 20, 2011 01:22 AM #104
Rainer
24,615
Brenda Van Fossen
Dawson Ford Garbee & Co., Realtors, Lynchburg VA - Lynchburg, VA

Eric,

I read a post this morning from my Virginia Association of Realtors that contributed the inflated numbers not to double counting but to use of mathematical models that are out-dated.  The VAR article said that the incorrect NAR numbers were not due to accumulation of numbers in the various MLS's. 

Dec 20, 2011 03:36 AM #105
Rainmaker
100,921
Risa Liebster
Ramsey-Shilling Associates - Los Angeles, CA
Toluca Lake Real Estate

Verrrry interesting... The integrity of data must be ensured and this must be a priority for NAR.

Dec 20, 2011 05:13 AM #106
Rainer
69,613
Danny Dietl
www.dannyrealestate.com - Minneapolis, MN
Buy, Sell, Lease - iMetroProperty.com

Just curious, but has Yun been fired yet? He should be. 

Dec 20, 2011 03:51 PM #107
Rainmaker
565,890
Eric Kodner
Madeline Island Realty - La Pointe, WI
CRS, Madeline Island Realty, LaPointe, WI 54850 -

UPDATE - NAR Posts "re-benchmarking" data on National Association of Realtors website -  http://www.realtor.org/research/research/ehs_benchmarking

Dec 21, 2011 10:11 AM #108
Rainer
286,059
Derrick Guevremont
Counselor Realty of Rochester - Rochester, MN
Rochester MN Homes for Sale

Doesn't sound like the NAR spent much time checking the data on this.

Dec 21, 2011 10:38 PM #109
Rainer
34,993
Dan Pinson
International Realty Partners - Phoenix, AZ
Broker,ABR,GRI,RSPS,SFR,TRC

Why would MLS data even be used? Tax records would be the better measure. NAR needs to go as our union.

Dec 29, 2011 04:05 AM #110
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Rainmaker
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Eric Kodner

CRS, Madeline Island Realty, LaPointe, WI 54850 -
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