The Numbers Game
March 8, 2012 - 4:46pm
By Laura Van Zeyl

Some recent reports from my friends at point to the fact that potentially inaccurate figures may be sending the wrong signals about the severity of the housing crisis.

A Feb. 22 article in The Wall Street Journal indicated that the National Assn. of Realtors (NAR) may have over-counted home sales dating as far back as 2007. How much could the variance be? Well, NAR reported 4.9 million homes sold in 2010, down from 5.2 million in 2009, while real estate analytics firm CoreLogic estimated 3.6 million home sales in 2010 compared to 4.1 million in 2009. To paraphrase the late U.S. Senator Everett Dirksen, a million here and a million there and pretty soon you’re talking about a real discrepancy.

Just last week, a CNBC interview with renowned housing analyst Ivy Zelman reported that U.S. Census Bureau data on new construction sales could be called into question. Zelman’s data showed a 12 percent decline in seasonally adjusted new home sales for December, but the Census indicated an 18 percent increase. New home orders were up 11 percent compared to a year ago, according to Zelman’s data, but the Census showed a 13 percent decline.

“We believe the new home sales pace is materially above what the Census has reported in recent months, suggesting there is not as much ‘doom and gloom’ on the new home side as what is being widely reported,” Zelman said.

Now, Zelman has earned the nickname “Poison Ivy” for her bearish outlook. And she was famously spot-on in her prediction of the sub-prime mortgage crash. So for her to spread the “good news” gospel regarding the builder market is definitely encouraging. What remains unsettling to me is how widely variable the “facts” and figures can be, and yet their ups and downs continue to impact consumer confidence as they make headlines. Go figure.

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