Tuesday, May 21, 2013

Zillow: House Prices up over 5% year-over-year in March, Case-Shiller expected to show 9.8% YoY increase

by Calculated Risk on 5/21/2013 08:58:00 AM

From Zillow: Annual U.S. Home Value Appreciation Exceeds 5 Percent for Sixth Straight Month in April

U.S. home values continued to climb in April, increasing 0.5 percent from March to $158,300, according to the April Zillow Real Estate Market Reports. Home values were up 5.2 percent year-over-year, marking the sixth consecutive month of annual home value appreciation at or above 5 percent. The last time national home values were at this level was in June 2004.

A majority (55 percent) of the 365 metros covered saw home values climb in April from March. Of the 30 largest metro areas covered, Sacramento experienced the largest monthly increase, with home values rising 3.4 percent. Other large metro areas with notable monthly increases include Las Vegas (3 percent) and San Francisco (2.8 percent).

“April marks the sixth straight month of annual home value appreciation of 5 percent or above, the longest such streak since the height of the bubble in 2006. In the short term, this has been welcome news for homeowners. But in the long term, this cannot be sustained, and consumers entering the market today should not expect this kind of appreciation to last,” said Zillow Chief Economist Dr. Stan Humphries. “Overall, we expect home value appreciation to moderate as more supply comes on line over the next year, but in some areas, runaway home value appreciation, combined with expected interest rate hikes in coming years, runs a real risk of pricing out many potential buyers. Home values in these areas will have to flatten or even fall to come back in line.”

The Zillow Home Value Forecast calls for 4 percent appreciation nationally from April 2013 to April 2014.
The Case-Shiller house price indexes for March will be released Tuesday, May 28th. Zillow has started forecasting the Case-Shiller a month early - and I like to check the Zillow forecasts since they have been pretty close.

Zillow: March Case-Shiller Composites To Show Annual Appreciation Above 9%
[W]e predict that ... Case-Shiller data (March 2013) will show that the 20-City Composite Home Price Index (non-seasonally adjusted [NSA]) increased 9.8 percent on a year-over-year basis, while the 10-City Composite Home Price Index (NSA) increased 9.3 percent on a year-over-year basis. The seasonally adjusted (SA) month-over-month change from February to March will be 0.9 percent for both the 20-City Composite and the 10-City Composite Home Price Indices (SA). All forecasts are shown in the table below. Officially, the Case-Shiller Composite Home Price Indices for March will not be released until Tuesday, May 28.
...
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 resale numbers, which we also have available more than a month prior to Case-Shiller numbers. ...

The ZHVI does not include foreclosure resales and shows home values for March 2013 up 5.1 percent from year-ago levels. ... Further details on our forecast can be found here ...
The following table shows the Zillow forecast for March.

Zillow March Forecast for Case-Shiller Index
 Case Shiller Composite 10Case Shiller Composite 20
NSASANSASA
Case Shiller
(year ago)
Mar 2012146.46150.36134.07140.12
Case-Shiller
(last month)
Feb 2013159.24162.37146.57149.80
Zillow ForecastYoY9.3%9.3%9.8%9.8%
MoM0.5%0.9%0.5%0.9%
Zillow Forecasts1 160.1164.1147.3151.0
Current Post Bubble Low 146.46149.45134.07136.86
Date of Post Bubble Low Mar-12Feb-12Mar-12Jan-12
Above Post Bubble Low 9.3%9.8%9.8%10.3%
1Estimate based on Year-over-year and Month-over-month Zillow forecasts