Friday, February 22, 2013

Zillow forecasts Case-Shiller House Price index to increase 6.7% Year-over-year for December, Strong Price increases in January

by Bill McBride on 2/22/2013 01:58:00 PM

The Case-Shiller house price indexes will be released next week. I like to check the Zillow forecasts; they have been pretty close.

Zillow Forecast: December Case-Shiller Composite-20 Expected to Show 6.7% Increase from One Year Ago

[W]e predict that next month’s Case-Shiller data (December 2012) will show that the 20-City Composite Home Price Index (non-seasonally adjusted [NSA]) increased 6.7 percent on a year-over-year basis, while the 10-City Composite Home Price Index (NSA) increased 5.7 percent on a year-over-year basis. The seasonally adjusted (SA) month-over-month change from November to December will be 0.7 percent for the 20-City Composite and 0.6 percent for the 10-City Composite Home Price Index (SA). All forecasts are shown in the table below. Officially, the Case-Shiller Composite Home Price Indices for December will not be released until Tuesday, February 26th, almost two months after the end of 2012.

The December Case-Shiller numbers are forecast to come in stronger than many economists expect. The last few months have hinted at a strong close to 2012, but part of this strength is due to the weak December 2011 numbers to which December’s numbers are compared. ... To forecast the Case-Shiller indices we use past data from Case-Shiller, as well as the Zillow Home Value Index (ZHVI), which is available more than a month in advance of Case-Shiller numbers, paired with foreclosure re-sale numbers, which we also have available more than a month prior to Case-Shiller numbers. Together, these data points enable us to reliably forecast the Case-Shiller 10-City and 20-City Composite indices.
Right now it looks like Case-Shiller will be up over 6% in 2012 (through the December / Q4 reports to be released in February).

Note: Zillow also released their January index yesterday: January Annual Home Value Increase Is Largest Since Summer 2006
Zillow’s January Real Estate Market Reports, released today, show that national home values rose 0.7% from December to January to $158,100. January 2013 marks the 15th consecutive month of home value appreciation. On a year-over-year basis, home values were up 6.2% from January 2012 – a rate of annual appreciation [for Zillow index] we haven’t seen since July 2006 (when the rate was 7.5%), before the peak of the housing bubble.
Case Shiller Composite 10Case Shiller Composite 20
NSASANSASA
Case Shiller
(year ago)
Dec 2011149.59149.77136.60136.84
Case-Shiller
(last month)
Nov 2012158.28157.33145.82144.99
Zillow December ForecastYoY5.7%5.7%6.7%6.7%
MoM-0.1%0.6%0.0%0.7%
Zillow Forecasts1158.1158.3145.8146.0
Current Post Bubble Low146.46149.44134.07136.74
Date of Post Bubble LowMar-12Jan-12Mar-12Jan-12
Above Post Bubble Low8.0%5.9%8.7%6.8%
1Estimate based on Year-over-year and Month-over-month Zillow forecasts

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