Multiple reports of monthly home sales were released in April, though some came from more reputable sources than others.
The California Association of Real Estate (CAR), a real estate trade organization, reported a “seasonally adjusted annualized rate” of 505,360 closed sales of existing, single-family detached units sold in March of 2012 (or approximately 42,000 total homes). In contrast, data supplier DataQuick reported 37,481 new and resale for all SFR homes sold in March, attached or detached, new and used, at an estimated annual rate of 420,000 total closings by end of the year.
If CAR’s annualized rate proves correct, home sales are in for a shocking recovery over the course of the year. 505,360 homes is over 100,000 more than were sold in 2011 (413,479 recorded closings, according to DataQuick), and is 24% higher than first tuesday’s forecast for 2012 (407,000).
The accuracy of the trade union’s data has been called into question in the past: CAR’s parent organization, the National Association of Realtors (NAR) admitted to using inflated home sales data in late 2011 when confronted by CoreLogic data on actual recordings, similar to the data used by DataQuick.
first tuesday take:
Of course, CAR’s miraculous housing forecasts are not going to come true. We anticipate the second half of 2012 will show only modest growth in home sales, as consumer spending falls back to the pace of income growth and global economic conditions remain shaky.
A trade union has a vested interest in increasing its membership – in CAR’s case, by increasing the number of licensed real estate brokers and agents.
Real estate professionals looking for data on the state of the housing market would do well to remember that some data suppliers have much to gain in presenting the optimistic image of a recovering market.
It is due to this conflict of interest, as well as historical inaccuracies in data, that first tuesday has always declined to use any economic data gathered by trade union groups. For alternative, reliable and time-proven data on well researched economic activity, take a look at first tuesday’s Market Charts.
Re. “March Home Sales and Price Report” from the California Association of Realtors