by Calculated Risk on 3/22/2013 02:57:00 PM

From economist Tom Lawler:

The National Association of Realtors estimated that existing home sales ran at a seasonally adjusted annual rate of 4.98 million in February, up 0.8% from January’s upwardly-revised (to 4.94 million from 4.92 million, though unadjusted sales were not revised) pace. While the NAR’s estimate was slightly below consensus, it was above my estimate based on regional tracking – mainly, it appears, because of a “most strange” surge in condo/co-op sales in the South not reflected in local realtor reports.

The NAR estimated that existing SF home sales ran at a SAAR of 4.36 million in February, down 0.3% from January’s pace – an estimate that seems broadly consistent with regional realtor/MLS reports. In sharp contrast, the NAR estimated that existing condo/co-op sales ran at a SAAR of 620,000, up 8.8% from January’s pace – with condo/co-op sales on the South purportedly up 20.8% on a seasonally adjusted basis on the month, and up 29.4% on an unadjusted basis from last February’s pace. This gain seems especially suspect given that Florida Realtors (formerly the Florida Association of Realtors) reported that existing condo and townhome sales by realtors in Florida (the “condo capital” of the South) in February were up only 7.0% from last February’s pace! Quite frankly, the NAR’s estimates for existing condo/co-op sales don’t “smell” right.

Below is a table showing historical estimates of regional existing condo/co-op sales from the NAR, expressed as a seasonally adjusted annual rate. Note all the periods where seasonally adjusted sales in a region were exactly the same for at least three consecutive months.

As the table indicates, seasonally-adjusted sales show periods of remarkable stability in all four regions – partly, of course, because the NAR rounds seasonally adjusted sales to the nearest 10,000 (and unadjusted sales to the nearest thousand), which seems like “excessive” rounding. E.g., if “unrounded” condo/co-op sales on a seasonally adjusted annual rate basis in the Midwest went from 45,100 to 54,500 -- a 20.8% jump – sales rounded to the nearest 10,000 would show sales as being flat!). Conversely, if unrounded SAAR sales went from 54,500 to 55,100 – 1.1% increase – SAAR sales rounded to the nearest 10,000 would jump from 50,000 to 60,000, a 20% gain! According to the NAR, existing condo/co-op sales in the Midwest ran at a SAAR of 50,000 in ten of the 12 months of 2011.

When the NAR released its “rebenchmarking” of existing home last year, there were “astonishingly” big revisions in regional sales of existing condos and co-ops – suggesting either issues with the rebenchmarking, some serious issues with its previous methodology or both.

NAR estimates for existing condo/co-op sales only go back to 1999, and it first published monthly estimates in 2005.

Year	Month	Northeast	Midwest	South	West
2010	Jan	100,000	60,000	200,000	130,000
	Feb	110,000	70,000	210,000	140,000
	Mar	110,000	50,000	200,000	140,000
	Apr	130,000	60,000	210,000	140,000
	May	100,000	60,000	230,000	150,000
	Jun	100,000	60,000	210,000	130,000
	Jul	80,000	40,000	170,000	100,000
	Aug	90,000	40,000	190,000	110,000
	Sept	80,000	40,000	190,000	110,000
	Oct	90,000	50,000	180,000	110,000
	Nov	90,000	50,000	210,000	110,000
	Dec	100,000	50,000	220,000	130,000
2011	Jan	100,000	60,000	250,000	150,000
	Feb	100,000	50,000	210,000	130,000
	Mar	90,000	50,000	240,000	130,000
	Apr	80,000	50,000	220,000	130,000
	May	110,000	50,000	200,000	120,000
	Jun	100,000	50,000	190,000	120,000
	Jul	70,000	50,000	210,000	110,000
	Aug	120,000	50,000	200,000	130,000
	Sept	100,000	50,000	210,000	130,000
	Oct	80,000	50,000	210,000	130,000
	Nov	70,000	60,000	210,000	120,000
	Dec	100,000	50,000	200,000	130,000
2012	Jan	100,000	60,000	210,000	140,000
	Feb	100,000	60,000	220,000	130,000
	Mar	100,000	60,000	210,000	130,000
	Apr	110,000	60,000	210,000	130,000
	May	100,000	60,000	220,000	130,000
	Jun	90,000	60,000	220,000	110,000
	Jul	100,000	60,000	220,000	130,000
	Aug	110,000	70,000	240,000	130,000
	Sept	110,000	70,000	250,000	130,000
	Oct	110,000	70,000	250,000	130,000
	Nov	110,000	80,000	280,000	130,000
	Dec	110,000	70,000	250,000	140,000
2013	Jan	110,000	80,000	240,000	140,000
	Feb p	110,000	80,000	290,000	140,000