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Friday, June 22, 2012

Zillow's forecast for Case-Shiller House Price index in April

by Calculated Risk on 6/22/2012 05:31:00 PM

Note: The Case-Shiller report is for April (really an average of prices in February, March and April). This data is released with a significant lag, see: House Prices and Lagged Data

Zillow Forecast: Zillow Forecast: April Case-Shiller Composite-20 Expected to Show 1.9% Decline from One Year Ago

On Tuesday, June 26th, the Case-Shiller Composite Home Price Indices for April will be released. Zillow predicts that the 20-City Composite Home Price Index (non-seasonally adjusted [NSA]) will decline by 1.9 percent on a year-over-year basis, while the 10-City Composite Home Price Index (NSA) will decline by 2.4 percent on a year-over-year basis. The seasonally adjusted (SA) month-over-month change from March to April will be 0.5 percent for both the 20 and 10-City Composite Home Price Indices (SA). All forecasts are shown in the table below and are based on a model incorporating the previous data points of the Case-Shiller series and the April Zillow Home Value Index data, and national foreclosure re-sales.

April is the third consecutive month with monthly appreciation for the Case-Shiller indices, with April projected to be particularly strong. Buyers are experiencing many markets with extremely low inventory, which is propping up prices in the near term, paired with a decreasing share of foreclosure re-sales. The decreasing share of foreclosure re-sales, especially, will impact the Case-Shiller indices positively this month.

Despite the recent uptick in home prices, we do believe that 2012 will end on a lower level than 2011.
Zillow's forecasts for Case-Shiller have been pretty close.

One of the keys this year is to watch the year-over-year change in the various house price indexes. The composite 10 and 20 indexes declined 2.8% and 2.6% YoY respectively in March, after declining 3.6% and 3.5% in February. Zillow is forecasting a smaller year-over-year decline in April.

Case Shiller Composite 10Case Shiller Composite 20
Case Shiller
(year ago)
April 2011151.78154.81138.43141.27
(last month)
March 2012146.61149.55134.10136.90
Zillow March ForecastYoY-2.4%-2.4%-1.9%-1.9%
Zillow Forecasts1148.2150.7135.8138.6
Current Post Bubble Low146.61149.29134.10136.57
Date of Post Bubble LowMarch 2012January 2012March 2012January 2012
1Estimate based on Year-over-year and Month-over-month Zillow forecasts