Really, I have no axe to grind against the National Association of Realtors. I suspect that I would like most of the individuals who work there, and I admire them for many things. The Center for Realtor Technology is a good example of things I admire about NAR.
But they make it so easy to beat up on them sometimes (HT: InstaPundit):
The National Association of Realtors falls into this latter category [of trade groups that massage their data and spin it]. They have been calling the bottom in Housing, well, ever since the top 2 1/2 years ago; Their consistent claims of stabilization and price improvements later in the the year — as prices have continued to slide — have earned them the title of Worst. Forecasters. Ever. What is more damning, IMHO, is that they are not just wrong, but purposefully misleading for commercial purposes. I believe that is defined as Fraud.
Those are some harsh words. I don’t know that NAR was intentionally defrauding or misleading journalists and people, but… they do deserve a beating. Evidence?
In a front page, 3rd paragraph snafu, the Journal writes: “On Monday, new data suggested that pressures like these are starting to drive prices low enough to attract some buyers back into the market. Sales of previously occupied homes jumped 2.9% in February from the month before, the National Association of Realtors said, the first increase since July.”
As we noted yesterday, that was not what the data stated at all: “Changes from January to February are measuring seasonal differences, not actual improvements in house sales.” Can you imagine what it would be like if we reported retail sales from December to January this way? Headlines would misleadingly state: “Retail sales plummet 65%!” That is why with highly seasonal data series, the preferred methodology is to report year-over-year data — not month-to-month variations.
And what were those numbers? The year-over-year data for existing home sales were DOWN 23.8% below February 2007 levels. That datapoint never found its way into the WSJ article at all. I cannot recall a more blatant misreporting of fact, or a larger or more embarrassing error in a front page WSJ article, ever.
While the NAR might be high-fiving each other over their successful deception at the Journal, they may wish to reconsider. As we noted over a year ago, many realtors in the field are finding the NAR tactics frustratingly counter-productive.
The author has a point.
Now, to be fair, perhaps WSJ simply took the NAR quote out of context. Maybe the NAR spokesperson did say, “BUT!!!11!one!111! you have to remember that Feb 2008 is 24% below Feb 2007 levels, so we’re nowhere near out of the woods yet.” Who knows?
Fact is, avoiding getting misquoted in newspapers is why you have public relations professionals. At a minimum, the PR folks over at NAR bungled this article. But if they intentionally sought to create rah-rah optimism, they have failed and just embarrassed themselves in the process.
Like Big Picture wrote, this has also been counterproductive, because it encourages sellers to continue to engage in fantasy pricing.
I think it’s high time that NAR join the ranks of the industry organizations that just put the raw data out there, and refrain from comment. No spin, no explanation — just data. Let the commentariat do the yapping and just put the data out there in raw form.
It can’t possibly be worse than engaging in spin, then being caught.
-rsh
