Posted on 09/02/2010 7:11:59 AM PDT by blam
Housing Numbers - Are They Being Cooked?
September 1,2010
The Market Ticker
Karl Denninger
I have a very disturbing email that came in this evening.
It alleges out-and-out fraudulent reporting of home sales in one of the regional MLS systems.
That is, prices paid that are in fact much lower than the "sold" prices reported in the MLS.
The person in question claims to have seen over 100 of these in his area. I have copies of two, and it appears, from the evidence that I have, that at least for those two the claim is accurate.
One in particular I was able to pull the auction data on. It "sold" under reserve, is listed as sold in the MLS at ~25% higher than the "sold" bid, and the premium is disclosed as 5%. This property also has a 90-day "anti-flip" provision on it, implying that the paper may be held by one of the GSEs. (It's a nice-looking place, incidentally.)
Here's the problem, obviously - Case-Schiller and other "home statistics" numbers related to price paid are all computed off these numbers provided by the local Realty boards (via NAR.) If the data in the MLS is bogus then so is the so-called "median sales price" and so are Case-Schiller's numbers!
These are not small discrepancies either - in both cases the "over-reporting" is by approximately 25%!
Both subject properties sent to me were auctions.
I am going to dig into this - if this can be verified and is happening nationally the claims of recent price stabilization are utter crap, and the first obvious question that arises is "how far back does this go?"
It also raises a key question when it comes to BPOs, not only from a standpoint of bank valuations (e.g. "drive-bys") but additionally if you're buying a house and your agent is showing you comparable sales predicated on faulty MLS data you are going to be induced to RADICALLY overpay.
For the time being I would verify any claimed "sold" prices with the county recorder before believing any alleged "sold" prices you're being fed as comparables.
This might be an anomaly, an "isolated incident", or it may not be what it appears to be, but with a 25% disparity we're not talking small potatoes if this is accurate.
I'll post follow-up Tickers on this as I learn more.....
Any chance that with all the numbers being cooked, that housing is not cooked?
From unemployment numbers, "saved" jobs, stock manipulation, gold prices, we can surmise that ALL the numbers have been and are being "cooked". By hook or crook, they are cooked.
Sorry for triple post. Have not got the hang of posting from my phone.
Sorry for triple post. Have not got the hang of posting from my phone.
Sorry for triple post. Have not got the hang of posting from my phone.
You are right about the R.E. market being controlled though. It is being done by the banks in how quickly they foreclose on homes to restrict the number on the market at any one time. If they processed them all at a consistent rate things would be worse than they are.
Cooked?
Deep fried and barbecued!................
Tripple sorry post too........
IMO, you need to relax a bit.
Information on individual sales in input by the LISTING BROKER....not the Board of Directors of the local MLS system.
Furthermore, when a seller or bank contributes a percentage of the Sales Contract price back to the buyer for buyer closing costs, that reduces the actual “net proceeds” to the Seller. But transfer taxes, etc., are paid on the Gross Sales Price.
New FHA guidelines establish that sellers which are NOT chartered banks must wait a minimum number of days BEFORE they can re-sell (flip) the property.
Pending Home Sales Beat Expectations
" Pending home sales rose 5.2% in July, vs. 0.0% expected, according to the National Association of Realtors.
This one will prrobably do it too. I’m cluelessas to the reason.
This one will prrobably do it too. I’m cluelessas to the reason.
If I relaxed any more, I'd be taking another nap, lol.
are the guys who own the MLS software- democrat donors?
Clueless or not, you are improving.
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