The Case-Shiller data for January 2012 came out this morning and, based on this information and the February 2013 Zillow Home Value Index (released last week), we predict that next month’s Case-Shiller data (February 2013) will show that the 20-City Composite Home Price Index (non-seasonally adjusted [NSA]) increased 8.9 percent on a year-over-year basis, while the 10-City Composite Home Price Index (NSA) increased 8.0 percent on a year-over-year basis. The seasonally adjusted (SA) month-over-month change from January to February will be 0.7 percent for the 20-City Composite and 0.6 percent for 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 February will not be released until Tuesday, April 30.
The Case-Shiller numbers for the past few months have been much stronger than many economists had expected. February data is forecasted to stay true to the recent trend of strong monthly/annual appreciation. Going forward, many economists expect annual appreciation for the next 5 years to be somewhat muted, as the Zillow Home Price Expectations Survey shows. This survey of over 100 economists predicts the Zillow Home Value Index (ZHVI) 5 years into the future. While this forecast focuses on the ZHVI instead of the Case-Shiller Home Price Indices, it is useful to evaluate the overall trend. The Case-Shiller Index will tend to be more volatile, as it also includes foreclosure re-sales.
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 February 2013 up 5.8 percent from year-ago levels. We expect home value appreciation to moderate in 2013, rising only 3.2 percent from February 2013 to February 2014. Further details on our forecast can be found here and Zillow’s full January 2013 report can be found here.