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Wednesday, November 23, 2011

Zillow Forecast for Case-Shiller House Price Index

by Calculated Risk on 11/23/2011 11:32:00 PM

The Case-Shiller Home Price Indices for September will be released next Tuesday, November 29th. Zillow chief economist Stan Humphries put out a forecast for the Case-Shiller HPI yesterday: Zillow Forecast: September Case-Shiller Composite-20 Expected to Show 3.2% Decline from One Year Ago

Zillow predicts that the 20-City Composite Home Price Index (non-seasonally adjusted, NSA) will decline by 3.2% on a year-over-year basis, while the 10-City Composite Home Price Index (NSA) will show a year-over-year decline of 2.8%. The seasonally adjusted (SA) month-over-month change from August to September will be -0.2% and 0.0% for the 20 and 10-City Composite Home Price Index (SA), respectively.
"We expect to see continued home value depreciation as unemployment and negative equity remain high and as the pace of foreclosures, kept artificially low since the robo-signing controversy, increases again."
On an NSA basis, this would leave the 10-city composite about 3.9% above the post bubble low, and the 20-city composite about 3.5% above the post bubble low.

The CoreLogic (used by the Fed) index (NSA) for September was about 3.6% above the post bubble low.

However this would put the seasonally adjusted 20-City composite index at a new post-bubble low (and the 10-city would be just above a new low). Because the seasonal factor has been impacted by the high percentage of foreclosures, most people just report the NSA numbers - and the NSA numbers will probably not be at new lows until early next year.

But there is still a strong seasonal pattern to house prices, and it will be interesting if the SA numbers are at new lows ...