I’ve always taken the data reported by the National Association of Realtors (NAR) with a grain of salt, especially during the downturn in housing. They’ve always seemed to have a Pollyanna view on things, routinely telling us that the worst was behind us and better days were ahead, only to see sales and prices of homes continue to plummet.

Now, has come out and said their sales figures for the past four years need to be revised downward… by a lot. Click here to check out the actual report from NAR.

If you don’t feel like getting into the details of the report, the graph to the left (courtesy of NAR and CNN Money) should do a good job illustrating just how far off NAR was with their original sale estimates.

Here’s a quick blurb from Les Christie’s article on CNN Money:

Existing home sales during the housing bust were actually 14.3% worse than previously reported, a revision to Realtors’ group numbers shows. On Wednesday, the National Association of Realtors (NAR) revised home sale counts back to 2007 due to flaws in their original data analysis. Print CommentIn 2007, there were actually just 5.04 million existing home sales, 11% less than the 5.65 million originally reported. Even worse were 2008 and 2009, when there were 16% fewer sales than originally reported. Sales in 2010 were 15% lower. “The errors started in 2007 and continued to accumulate over time,” said Lawrence Yun, NAR’s chief economist.

I guess the silver lining in all of this is the fact that their estimates on home prices weren’t revised downward. But, that is a much more localized concern, and is much easier to check by simply looking at recent sales in your neighborhood or community. That’s not to say sales volume isn’t somewhat localized, but considering we’re in a national housing funk, I think volume is a much better national metric than price.

Here’s a video, which is also posted on NAR’s website, of NAR’s Chief Economist, Lawrence Yun, discussing the revising – or “rebenchmarking,” as they call it – of the housing data.

Editorial note – Yun is the biggest Pollyanna of them all.

Moral of the story – we thought housing was bad, turns out it was worse.

What are your thoughts? Leave your comments below and let me know what you think!