by Calculated Risk on 1/27/2011 10:00:00 AM

UPDATE:
• On February 23rd, the National Association of Realtors (NAR) will release revisions for the past three years (2008 through 2010) along with the January existing home sales report. This is the ordinary annual revision, and the revisions will probably be minor.

• The NAR is working on benchmarking existing home sales for previous years with other industry data. There is no planned release date for these possible revisions - if any are announced. The process is expected to be completed sometime after mid-year, and I expect this effort will lead to significant downward revisions to previously reported sales.

Original post:

Special Note: I've been discussing the National Association of Realtors (NAR) existing home sales data with several analysts. As an example, Keith Jurow has been sending me data from local areas, and also calculations based on data from Inside Mortgage Finance suggesting that the NAR existing home sales data is overstating sales. I've also looked at other sources, and I think the NAR started over estimating sales in 2006 or 2007 (perhaps by 5% or so in 2007), and the errors have increased since then (perhaps 10% or 15% or more in 2009 and 2010). I expect the NAR will revise down sales for these years in the not too distant future (I'm hearing whispers of coming revisions - but I haven't been able to confirm this with the NAR).

From the NAR: Pending Home Sales Continue Uptrend

The Pending Home Sales Index,* a forward-looking indicator, increased 2.0 percent to 93.7 based on contracts signed in December from a downwardly revised 91.9 in November [revised down from 92.2]. The index is 4.2 percent below the 97.8 mark in December 2009. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

This suggests existing home sales in January and February will be somewhat higher than in December, although - based on mortgage applications - I think we might see a slight decline in sales.