The Case-Shiller data for November 2012 came out this morning and, based on this information and the December 2012 Zillow Home Value Index (released last week), we 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. The December 2012 edition of the Zillow Home Price Expectations Survey, administered by Pulsenomics, which surveys more than 100 professional forecasters quarterly to forecast the Case-Shiller National Home Price Index for the next five years, shows that the consensus forecast for December 2012 was 4.6 percent. For this result and longer term insights on where the Case-Shiller National Index will be headed, see the December release of the Zillow Home Price Expectations Survey here.
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. The ZHVI does not include foreclosure re-sales and shows home values for December 2012 up 5.9% from year-ago levels. We expect home value appreciation to moderate in 2013, rising only 3.3 percent from December 2012 to December 2013. Further details on our forecast can be found here and Zillow’s full December 2012 report can be found here.