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A reader writes in with some troubling observations on what could potentially be a pretty substantial scheme to artificially “boost” existing home prices by up to 40%, putting all the NAR data, and all other relevant public housing data materially into question. Since trick is painfully simplistic, and all too easy to spot, we wish to open it up to our readers for verification, as this could be a huge hit to the credibility of all existing home price metrics, and put into question all transitory upticks in home prices, such as the backward looking Case-Shiller index indicated yesterday.
From the email:
Realtor are not reporting the true sold prices on homes. Here are 2 examples. If a home is listed on the MLS and then sells at a auction like Hudson & Marshal or RealtyBid, you can see the sold price online or if you attend the live auctions, see the house sell at open outcry auction. The next day the houses are reported sold on the MLS but always at full price.
The example below sold for $115,000 at Realtybid but is listed as sold for $159,500 on the MLS.
Also, homes are listed on the MLS and sold on the HUD site. You can see the sold area on HUD and the Bid Stats. The house listed below sold on the Hud site for $90,061 but again was listed as sold for full price on the MLS $113,400.
These are only 2 examples, I have seen over 100 and assume it is occurring everywhere. I understand that foreclosures are not included in the sales stats from the Realtor Assoc. but the stats they use are taken from the sold prices listed on the MLS. They are all false.
Simply said, this means that any pricing data coming off Multiple Listing Services is fatally flawed, and if this observation is verified, could potentially be a simplistic means to misrepresent the true home price by up to 40% higher.
As for the examples, here is property 1 as represented by the MLS: note the price of $159,500
Originally posted by mnemeth1
reply to post by General.Lee
I always cringe when I see "greed" used to describe private industry.
That's what they are supposed to do.
It is vitally important that we keep in mind the system that allows this fraud to be perpetrated.
The federal reserve system is ultimately at the root of this corruption.
People will always act in their own self-interest. Thus, the system must be constructed in such a way as to automatically punish those who commit fraud. This means a free market. The SEC and all the rest can't protect us. Only a free market that is allowed to punish fraudsters can protect us.
Originally posted by TXRabbit
so let me get this straight.
I bought my house for $206k and others on the street/neighborhood were going for up to $250k. If my next door neighbor puts his up for sale at $210, wind's up foreclosing and HUD dumps it for $170, then our entire street is now overvalued?