TBP has long complained about the spinmeisters at the National Association of Realtors (NAR) for their pollyannish views and their continual bottom calling.
It turns out that the spin from the NAR isn’t the only thing that is suspect. It seems their data collection and basic math skills are questionable, also.
Case in point: Q1 Housing Sales.
James Bednar is Editor of the NJ Real Estate Report — a blog about Garden State realty issues. James is also a realtor, and was rather surprised to learn back on May 13th, that first quarter sales in New Jersey
were up 4% year over year. At least, that’s what the National Association of Realtors claimed when they released their
first quarter 2008 sales data.
That didn’t jibe with what James was seeing, so he requested the data from the NAR. Five times — all to no avail. Despite what local realtors were experiencing, both the NAR and the NJAR
believed that NJ was improving. Good news and proof of the housing bottom at
last!
Only, it was not to be. As was reported in the Star-Ledger this morning, NJ home sales were not up 4% in the first quarter; they had (whoops!) plunged 30 percent!:
"On Friday, the Realtorsâ group issued a huge correction, saying that instead of a slight increase, New Jerseyâs housing market actually saw a 30 percent drop in home sales during the first quarter compared with the same period last year.
âIt happened in the crunching of the numbers,â said NAR spokesman Lucien Salvant. âIt was just a mistake and we owned up to it.â
As it turns out, only 114,100 homes were sold across the state during the first quarter – nearly a third less than the 163,000 sales recorded in the first three months of 2007."
Granted, anyone can make an error — but one would have thought that a positive Q in NJ compare to the rest of the Northeast and the nation would have caused SOMEONE to spot the anomaly, doublecheck the math, oir at least answer a Realtor’s emails.
NAR chose D) None of the above. Why am I not surprised by this?
Read the full details at the links below. . .
>
Sources:
VINDICATION – NJ Q1 Home Sales down 30%
NJ Report, Sat 14 Jun 2008
http://njrereport.com/index.php/2008/06/14/vindication-nj-q1-home-sales-down-30/
NJ home sales plunged 30 percent in first quarter
Sam Ali
The Star-Ledger, Saturday June 14, 2008, 6:53 AM
http://www.nj.com/news/index.ssf/2008/06/nj_home_sales_plunged_30_perce.html
Another example of our Liar Culture. In my parochial little mind I imagine that the folks who manufacture our government statistics travel in the same circles as the NAR folks. Perhaps their kids attend the same schools, they go to the same cocktail parties etc.
We need to shine some light on the BEA, BLS, etc. especially after the NASA press secretary was caught shilling for the Neocons by changing numbers and massaging headlines on Global Warming. (he also lied about having a college degree but that’s another story).
My guess is that we are living in the first “Weekend at Bernie’s” economy. It turns out that you actually need factories and cheap energy to prosper! Who’d a thunk it!
That’s it. I’m calling a bottom: In self-interested, book-talking economic statistics. Sorry, I meant a top.
I laughed when I saw that it was a realtor who called the NAR out on their BS. That stuff, in this day and age, is priceless. Even they aren’t buying the pollyanna nonsense anymore.
From the NJ Report:
“New Jersey’s housing market continually outperforms other areas of the country,” said Jarrod C. Grasso, RCE, NJAR executive vice president. “The Garden State’s proximity to New York City and Philadelphia, its extensive transportation infrastructure and many other positive market forces contribute to the state’s healthy real estate market.”
What Mr. Grasso says has been recognized since the 1700s, when Ben Franklin described New Jersey as a “barrel bunged at both ends” by New York and Philly. Arguably, Grasso’s a plagiarist for not citing his easily identifiable source.
If it were true that this remarkable geography had made N.J. “continually outperform” the rest of the country for the last 250 years, lucky Garden State residents would now be multi-trillionaires, thanks to the awesome power of compounding.
Up until three years ago, the same silly myth was used to “prove” that prices could never fall. “We’re near the city, demand will always be rising here.”
Some laypersons may not be sophisticated in economics. But if you’re going to capitalize and trademark your professional title (as in ‘Realtor ™’), you’d damned well better stop spewing self-serving nonsense. Prostitution is the world’s oldest profession; is the real estate the second-oldest?
Realtors ™ make used-car salesmen look like ethical, polished pros by comparison. Even sidewalk strip-club touts don’t urge you, “Step in now, gentlemen, now before prices go up!” LOL!
If the chart was flipped–after they “crunch the numbers” NJ comes out down 4% yoy during a raging bull market–would they still choose the do-nothing option?
From the Palm Beach Post:
“Some Realtors are grumbling about prices not falling. Guess who they’re blaming? Here’s what Thomas Lawler, former Fannie Mae economist and current president of Lawler Economic & Housing Consulting in Vienna, Va., has to say in his private newsletter:
“A growing number of Realtors in Florida are frustrated with the state and national Realtors groups’ efforts to ‘spin’ the market as one that is strengthening and where home prices are stabilizing.
“Many (though probably not yet most) Realtors are frustrated by customers who continue to list their homes at price levels that are ‘unrealistic,’ and as a result, sales volumes – and thus commissions – continue to remain depressed.
“While Realtors have noted to customers that many home builders in Florida have slashed new-home prices in order to move bloated inventories, many home sellers are still holding off, hoping – along with FAR and NAR – that prices will start moving back up soon.”
Realtors are frustrated by customers who continue to list their homes at price levels that are ‘unrealistic,'”
I have said for a long time: Eventually realtors are going to get hungry enough to coax prices down, because lack of sales causes a lack of food. Of course, lack of food also causes stupidity, which might explain the NAR’s recent behavior.
The NAR is just like any investment bank or anyone else with a stake in the game. They’ll push fraudulent numbers as far as absolutely possible until they get caught. Then kicking and screaming, within a culture of deceit and obfuscation they’ll be-grudgingly and only most conservatively re-state the figures…all the while ensuring the holes in their opaque shield that permitted their discovery are plugged for next time. The fact that they get a free-pass by the MSM when reporting figures also shows how disconnected from reality the MSM is.
JP,
And thinning of realtor ranks will result in higher sales for remaining realtors.
The level of deceit in the US financial markets has become quite troubling. I thought Enron, Worldcom, etc. were anomalies spurred by greed during the dot-com days and that stiff incarceration stopped it in its tracks.
As it turns out, it looks like they actually started a trend – bullshit now and worry about getting caught later.
The bigger question is why? Are people so hung up on wealth that they are willing to do just about anything to attain or protect it?
If so, why?
Are we now living in a society where material “show” trumps personal integrity? Are we so insecure that we’ll do anything to avoid looking financially average?
I’m as big a capitalist as anybody but my weekend with my family or buddies is just as fun with or without a German super car in my driveway.
I hope I didn’t stray too far off-topic here. I just think it’s important to understand why our financial fiduciaries are choosing deceit and spin vs forthright.
More than a philosophical conversation, lack of trust will either drive away the public – or teach them to become just as deceptive in their financial dealings.
Either way, bad for all of us.
George
Anybody who works with Real Estate Agents consistently knows they are 99% BS. The most unprofessional group I have had to work with. (Full disclosure…I am in the dreaded mortgage industry)
If you were to quiz most who work in any aspect the r/e industry, you would find that NOBODY really likes R/E Agents.They are the necessary evil that we need to deal with. Most of my clients come away saying “6% for what?”
To believe that an association comprised of Realtors would report the truth (or anything that would hurt their sale) may be the true definition of insanity…
As an aside…NJ just moved to #10 on the list of growing foreclosure states…
Interesting how NJ could move onto this list, yet report a quarterly gain…things that make you go hmmmmm.
Reading the article again is just further supports the notion that we have severe credibility gaps across the broad spectrum of reporting, whether trade association, government or corporate. Confidence and trust in our regulatory, political and corporate leadership seems to suffered the most significant damage during the past year. Question is, is this because a true shift in their behavior or have they have always warranted this skepticism and we are now just wising up to it. Don’t know.
Barry,
When, oh when, is the SEC going to investigate NAR and put a stop to the fraud. NAR actually hurt a lot of people last year with their constant barrage of misinformation claiming there to be no bubble. And now they’ve called about 18 false bottoms, twisting information and snookering even more suckers into bad investments. Aren’t they knowingly giving false investment advice?
Or perhaps it will have to come to citizens filing a class action against them.
Perhaps you’d want to post a blog so that people might know what government agency to complain to regarding their tactics. The sooner the BS stops, the sooner a market can truly bottom and things can start rebounding.
Paul Jones,
“My guess is that we are living in the first ‘Weekend at Bernie’s’ economy.”
It’s merely a reprise, albeit an amplified one, of the 1980s flim-flam. Then, it was “Morning in America“; notwithstanding the fact that the Standard of Living of the vast majority of Americans went backwards by about 20%.
.
Paul Jones – I just about fell out of my seat laughing when I read your comment about our “Weekend at Bernie’s” economy because it’s so dead-on (pun intended).
Our economy is Bernie, dead as a door nail, and we have all of these idiots propping up the dead corpse economy, putting sunglasses and a Hawaiin shirt on it and prancing around town as if everything is just fine.
Trouble is it’s now began to stink and people are starting to smell it.
Peace – JB
I’ve gone long on mason jars and sharp shovels.
When credibility goes, capital eventually goes with it.
If we had mainstream journalists who actually gave the tiniest crap about ferreting out accurate information and highlighting the spin, drivel, and bullshit regularly spewed by such organizations as the NAR, the situation wouldn’t be so ludicrous. The fact is that with a few notable exceptions, the vast majority of so-called “journalists” — especially those in the broadcast media — are nothing more than loyal stenographers, eagerly copying down what the charlatans in government and business tell them. The notion of “fact-checking” is as foreign to most reporters as is the idea that the internet tubes can be used for something other than ordering airline tickets and surfing porn sites. If the internet did not exist, BP, CR, Mish, Bonddad, and all the other econ and business bloggers who actually have an interest in covering reality would not have a forum.
Maybe they were expecting a 34% drop, and since it was only a 30% drop, that is equivilent to a 4% gain.
Sort of the way government officials measure budget ‘cuts’…
All good posts here.
I had never really thought about it but we ARE living in a “Weekend at Bernie” economy. It fits exactly, dragging him around propping him up and putting sun-glasses on him appearing in various places just long enough to make an appearance…it fits, I tell ya, it DOES FIT perfectly!
George Tsiolis, I agree with everything you said. I ask how in the heck can anyone make an informed decision about ANYTHING if everything is chocked full of bogus data? That’s before you even get to the spin cycle. I also noticed another relic of a word in your post; which is now nothing more than an oxymoron – FIDUCIARY. Now, that’s an oxymoron if I ever saw one.
The whole economy and financial industry is a house of cards. You are absolutely correct, an economy and financial industry built on lies and deceit will eventually fall…quickly once it starts (I might add).
There are millions in attendance at Bernie’s party. You might want to stay close to the door.
Hi, All…..we are facing the same numbers fog out here in the West. our sales are off 40%, but realtors, the media & rest avoid the true data. of course, don’t forget that foreclosures count as a sale. so, the true sales are even lower. the only answer I can see is to reset all the loans at the original teaser rates. Then, outlaw compounding of mortgage interest rates. Homes should be paid for in 10 years. They make too much on the loans.
Viva Revolution!
The FBI should be arresting the top people at National Association of Realtors (NAR), they are more responsible for some of this real estate mess than even the greedy speculators.People on wall street are being rounded up right now,yet I never hear of top NAR people being picked up but its coming:)James is one the the few honest ones in the barrow and I bet he wants out.good work