IHT: US economy - Dueling reports tell different stories about the U.S. market - the real story is bleak - public being fooled by positive spin

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Dueling reports tell different stories about the U.S. market - the real story is bleak - public being fooled by positive spin

Data released Tuesday from the Standard & Poor’s/Case-Shiller index paints a much darker picture of the market in the United States than numbers released last week by the National Association of Realtors. Case-Shiller reported its index of house prices in 20 cities dropped by 15.8 percent in May from the same month a year ago, a record drop since the index was formed in 2000. Nine cities posted record declines, led by Las Vegas with a 28.4 percent drop. The tone and interpretation of the monthly data is an increasingly frequent topic of discussion these days, with the focus on NAR’s dual role as a researcher and industry booster. While the NAR’s numbers are widely reported, it’s hard to miss its attempts to spin the results. For example, NAR’s release on its May numbers was headlined, “May Existing-Home Sales Show Modest Gain.” In fact, sales were up a slight 2 percent from April. But the far more newsworthy number was the 15.9 percent drop from a year earlier, the more commonly used measuring stick of the market trends. In June, NAR President Richard F. Gaylord proclaimed in NAR’s monthly statistics press release, “Home buyers are starting to get off the fence and into the market.” A month later, when the month-to-month numbers showed another drop in activity, he said, “A recent online survey of Realtors shows nearly a quarter of potential home buyers are waiting on the sidelines”—suggesting June’s upbeat analysis was, at best, a tad premature. In the same July 24 press release, NAR chief economist Dr. Lawrence Yun tried to downplay the declines, noting that there is “downward distortion” of the price data due to short sales and foreclosures.

In similar fashion, the Florida Association of Realtors works hard to put a happy face on its data, which is not always easy. The group’s latest release proclaims, “Florida’s Existing Housing Market Shows Improving Conditions in June 2008.” The median price for homes increased by 1 percent from May to June, the press release boasts in the lead. It’s not until the fourth paragraph that readers learn Florida’s median sales price is down a depressing 16 percent from the same point a year ago.