NAR Numbers Still Don’t Add Up!

The revised existing-home sales have now been reported by the NAR. As reported, for the total period between 2007 thru 2010, the benchmark revision decreases existing-home sales by 14.3%. NAR states, “It appears that half of the revisions result solely from a decline in for-sale-by-owners with more sellers turning to Realtors(r) to market their homes when the market softened.


The FSBO market was overwhelmed during the housing downturn, and since most FSBOs are not reported in MLSs, national estimates of existing-home sales began to diverge based on previous assumptions.” Now here’s where the shell game begins, so pay close attention to the facts given by NAR and then you can decide what’s going on. NAR quotes the decline in FSBOs from the year 2000, not 2007, the base year of the revision! As reported by NAR, in 2000, FSBOs were 16% of all existing-home sales, declining to 9% in 2010. Seems like a huge decline in FSBO sales.

So, why do you suppose they selected the year 2000 for reported FSBO sales when the benchmark revision is from 2007. Based on the annual NAR research study of home buyers and sellers, the facts are as follows. In 2007, FSBO sales accounted for 12% of existing-home sales, in 2008 (13%), 2009 (11%) and 2010 (9%). So, during the period of the benchmark revision, the percentage of FSBO sales varied little more than a few percentage points, hardly what I would call “FSBOs being overwhelmed during the housing downturn.” More importantly, NAR failed to communicate that the percentage of FSBO sales actually increased again in 2011 to 10%! In light of this, it is hard to comprehend how FSBOs could account for ‘half of the revisions’ during the period from 2007 to 2010. If indeed FSBOs are the cause of the decline, why then did the benchmark revision only adjust the data from 2007 and not all the way back to 2000.

Moreover, to the extent NAR identifies FSBOs to be the cause, and to the extent NAR studies FSBO sales annually, why did NAR wait 10 years to adjust the data! It just doesn’t add up. It seems to me that FSBOs are unfairly being singled out as the primary reason for the benchmark revision and that NAR once again is trying to minimize the importance of the FSBO seller. NAR appears to have an agenda to paint a picture that FSBOs are becoming less and less important in the real estate landscape. Nothing could be further from the truth. NAR conveniently limits FSBO sales to only those sales that don’t involve a Realtor(r) in any way and omits the fact that there is an equally large portion of home sales that are in fact a FSBO sale that use a hybrid selling model…flat-fee MLS. These hybrid FSBOs understand the value of being listed on the MLS for agents to see.


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