Statistics highlight the fall in the real estate market | Top Stories
A recent alleged discrepancy in the statistics provided by the US Census Bureau (CB) on the number of vacant homes in Puerto Rico had apparently generated a conflict with the Office of the Commissioner of Financial Institutions (OCIF, for its Spanish acronym).
BC reported in its 2020 Post Census Survey (PES) that it underestimated the number of vacant housing units on the island by 5.8%, meaning there are more than unoccupied houses than originally counted in the 2020 census.
Compared to the national net coverage estimates for vacant dwellings (2.6%), the coverage error for Puerto Rico was more than double the national average.
“Understanding the devastation caused by Hurricane Maria, we adapted our operational design to count Puerto Rico as we prepared for the 2020 census,” Census Bureau Director Robert L. Santos said last week. attempting to explain the statistical difference.
“The release of coverage estimates for Puerto Rico represents a final piece in completing our comprehensive assessments of the 2020 post-census survey…This is one of many self-assessments that allow us to think critically about how we transform our operations and plan for the 2030 Census,” he explained.
It should be noted that the number of housing units in Puerto Rico cannot be found anywhere on the CB website, hampering the ability to determine how far – numerically – the agency was from its original determination. . In “Quick Facts About Puerto Rico,” the federal agency put an “X” on the line for “Housing Units, July 1, 2021, (V2021)” The only reference to a possible updated total number of Housing Units in Puerto Rico on the Web can be found in a publication of the American Bar Association (ABA), dated May 21, 2021. This publication, titled “The Lack of Proof of Ownership in Puerto Rico Is Crippling Repairs in the Aftermath of Hurricane Maria” states “there are approximately 1,237,180 million households” in Puerto Rico.
If we take the figure as correct, it would mean that BC underestimated 71,756 homes island-wide.
Mortgage bankers react
For her part, Luzmarie Vélez-Miró, president of the Puerto Rico Mortgage Bankers Association (PRMBA), called these statistics “different from local statistics, if we compare them to the data included in the report on the activity of the OCIF housing market”. She had been quoted in a local newspaper as saying “there are over 10,000 homes currently available for sale” and that “many” homes have been sold in 2021.
In an interview with The Weekly Journal, however, Vélez-Miró clarified that although the two statistics are related, “they are not the same” because they measure two different things. “Vacant homes are absolutely not the same as homes for sale,” she said, “and that can’t be interpreted as market acceleration.”
“What can be said about mortgage transactions today is that home sales are more common than refinances. We have seen a decline in sales in the market so far this year. Fewer homes were sold in 2022. Based on the information we have, I can say that the market has gone down, compared to last year’s sales,” explained Vélez-Miró.
In 2021, according to Vélez-Miró, the total number of pre-existing homes sold in Puerto Rico was 12,270, for a total of $2.1 billion. Meanwhile, the number of newly built homes sold that year was 1,019, for a total of $250 million. The PRMBA president also said that the number of homes sold in 2021 was higher than those sold in 2020, by some 3,000 units.
“Still, 13,000 units sold, given the population of Puerto Rico, it’s not really significant,” Vélez-Miró said. “There has been an increase in second homes, properties bought for investment and larger homes, all driven by the pandemic.”
She felt that there are several reasons for the market trend, among them the fact that you could get 2.5 to 3.0 mortgage percentages for your loans. In addition, there were government incentives like the Home Buyer’s Assistance Program, which allowed low- and middle-income families to buy their homes.
On the other hand, Vélez-Miró pointed out that the market’s deceleration this year could be attributed to interest rate hikes ordered by the Federal Reserve (FED), higher selling prices and low inventories in specific high-demand segments.
Where is the conflict?
Even though some news reports have highlighted a conflict between the data collected and published by the CB and the data published by the OCIF, the fact is that they both appear to be correct insofar as they measure different elements of the social and economic scenario of Porto Rico.
It should also be noted that this “statistical undercount” was not exclusive to Puerto Rico. In its PES report, the CB also admitted to underestimating housing units in the states of South Carolina (2.5%) and Vermont (4.1%). In contrast, the CB overestimated homes in Alabama (2.7%), Massachusetts (1.4%), New Jersey (2.5%), New York (3.7%), Ohio (1.2% ), Rhode Island (1.6%) and Utah (0.8%).
In an interview with The Associated Press last week, Santos said these assessments of the quality of the 2020 tally can’t “find out ‘why it happened’ – all we can do is estimate what happened”.
“We will continue to work closely with key stakeholders in Puerto Rico to work toward an accurate count for future censuses,” he said.
Puerto Rico is the largest and most populous US territory and has been treated as a separate governmental entity. As such, the sample was originally designed to allow estimates of coverage by subpopulation.