The Case-Shiller data for December 2012 came out this morning and, based on this information and the January 2013 Zillow Home Value Index (released last week), we predict that next month’s Case-Shiller data (January 2013) will show that the 20-City Composite Home Price Index (non-seasonally adjusted [NSA]) increased 8.0 percent on a year-over-year basis, while the 10-City Composite Home Price Index (NSA) increased 7.2 percent on a year-over-year basis. The seasonally adjusted (SA) month-over-month change from December to January will be 0.8 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 January will not be released until Tuesday, March 26th.
The December Case-Shiller numbers showed the year ending much stronger than many economists had expected. 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. TheCase-Shiller National Index showed year-over-year appreciation of 7.3 percent for December. For more details on where the Case-Shiller National Index will be headed and the December release of the Zillow Home Price Expectations Survey, see 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 resale 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 resales and shows home values for January 2013 up 6.2 percent from year-ago levels. We expect home value appreciation to moderate in 2013, rising only 3.3 percent from January 2013 to January 2014. Further details on our forecast can be found here and Zillow’s full January 2013 report can be found here.