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Wednesday, November 26, 2014

Zillow: Case-Shiller House Price Index year-over-year change expected to slow further in October

by Calculated Risk on 11/26/2014 03:47:00 PM

The Case-Shiller house price indexes for September were released yesterday. Zillow has started forecasting Case-Shiller a month early - and I like to check the Zillow forecasts since they have been pretty close.

From Zillow: Oct. 2014 Case-Shiller Prediction: Expect the Slowdown to Continue

The September S&P/Case-Shiller (SPCS) data out [yesterday] showed more slowing in the housing market, with annual growth in the 20-city index falling 0.7 percentage points from August’s pace to 4.9 percent in September. This is the first time annual appreciation for the 20-city index has been below 5 percent since October 2012. The national index was up 4.8 percent on an annual basis in September.

Our current forecast for October SPCS data indicates further slowing, with the annual increase in the 20-City Composite Home Price Index falling to 4.3 percent.

The non-seasonally adjusted (NSA) 20-City index was flat from August to September, and we expect it to decrease 0.4 percent in October. We also expect a monthly decline for the 10-City Composite Index, which is projected to fall 0.4 percent from September to October (NSA).

All forecasts are shown in the table below. These forecasts are based on the September SPCS data release and the October 2014 Zillow Home Value Index (ZHVI), released Nov. 20. Officially, the SPCS Composite Home Price Indices for October will not be released until Tuesday, Dec. 30.
So the Case-Shiller index will probably show a lower year-over-year gain in October than in September (4.9% year-over-year for the Composite 20 in September, 4.8% year-over-year for the National Index).

Zillow October 2014 Forecast for Case-Shiller Index
  Case Shiller Composite 10Case Shiller Composite 20
Case Shiller
(year ago)
(last month)
Zillow ForecastYoY4.2%4.2%4.3%4.3%
Zillow Forecasts1  187.9185.4173.0170.8
Current Post Bubble Low  146.45149.87134.07137.05
Date of Post Bubble Low  Mar-12Jan-12Mar-12Jan-12
Above Post Bubble Low  28.3%23.7%29.1%24.6%
Bubble Peak  226.29226.87206.52206.61
Date of Bubble Peak  Jun-06Apr-06Jul-06Apr-06
Below Bubble Peak  17.0%18.3%16.2%17.3%
1Estimate based on Year-over-year and Month-over-month Zillow forecasts