Today, the S&P/Case-Shiller Home Price Indices showed that the non-seasonally adjusted August 10- and 20-City Composite rose 1.3% and 2.0% on a year-over-year basis, in line with Zillow’s forecast released last week. On a seasonally adjusted monthly basis, the 10- and 20-City Composites rose 0.4% and 0.5% from July to August. The table below shows how our forecast compared with the actual numbers.
“Case-Shiller is tracking what other housing indicators have been showing: we are at a bottom in home values and we’re now seeing some modest gains again. However, the reality is the annual comparison for Case-Shiller is a bit of a mirage since home values were down so sharply in the back half of 2011,” said Zillow Chief Economist Dr. Stan Humphries. “On a monthly basis, Case-Shiller will likely to be flat or even slightly down from now until year end. Be prepared that Case-Shiller will likely report some negative monthly trends by year’s end, but this doesn’t mean the housing recovery has been derailed. This is exactly what bouncing along bottom looks like.”
Our forecasting model incorporates previous data points of the Case-Shiller series, as well as Zillow Home Value Index data and national foreclosure re-sales. To see how Zillow’s forecast of the July Case-Shiller indices compared, see our blog post from last month.