Realtors lower tally of home resales

Group cuts the total since 1989 by 7 million

February 26, 2005|By BLOOMBERG NEWS

Seven million fewer previously owned single-family houses were sold during the past 16 years than the National Association of Realtors initially estimated, according to the group's revised figures released yesterday.

Resales since 1989 were 10 percent lower per year on average than previously estimated, the association said in Washington. It issued the revisions after comparing its estimates with results from the 2000 Census.

Single-family home resales last year totaled a record 5.96 million, compared with a previous estimate of 6.68 million, the group said. Since 1989, a total of 65.1 million have been sold, compared with a prior estimate of 72.4 million.

Sales last month fell 0.5 percent to a 5.94 million annual rate.

"It does make me worry about how closely we should look at these numbers given the magnitude of the change," said Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, N.C. "Usually, when you make changes it's because you have better information, and it looks like that's the case here."

The group added condominiums and co-ops to its monthly figures for the first time. Including those housing units, resales fell to 6.80 million in January from 6.81 million.

The real estate group uses a formula based on figures from the Multiple Listing Service, a computerized system used by agents to track properties for sale and to estimate purchases in the years between each census. Those figures proved too high when compared with results from the most recent census, said Lawrence Yun, an economist at the Realtors association.

"Our estimate is just an estimate, not a universal count," Yun said. The census figures are more accurate in tracking actual sales, he said.

In addition, private research has found that people who said they had moved in the year of the census hadn't necessarily bought their homes that year, Yun said. Some sales occurred in previous years, further lowering the total, he said.

The association also tried to adjust for entries in the Multiple Listing Service, which don't differentiate between sales of previously owned homes and new homes, Yun said.

"There was some leaking of new-home sales into the existing-home sales data," he said, which accounted for the rest of the declines.

Economists and executives were as optimistic after the revisions as they were before.

"Last year was a heck of a year, and to look at these numbers it still looks great," said Thomas Kunz, chief executive at Cendant Corp.'s Century 21 real estate unit. "We have a great economy working for us."

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