Zillow Forecast: April Case-Shiller Composite-20 Expected to Show 1.9% Decline from One Year Ago

Posted by: Stan Humphries    Tags:      Posted date:  June 22, 2012  

On Tuesday, June 26th, the Case-Shiller Composite Home Price Indices for April will be released. Zillow predicts that the 20-City Composite Home Price Index (non-seasonally adjusted [NSA]) will decline by 1.9 percent on a year-over-year basis, while the 10-City Composite Home Price Index (NSA) will decline by 2.4 percent on a year-over-year basis. The seasonally adjusted (SA) month-over-month change from March to April will be 0.5 percent for both the 20 and 10-City Composite Home Price Indices (SA). All forecasts are shown in the table below and are based on a model incorporating the previous data points of the Case-Shiller series and the April Zillow Home Value Index data, and national foreclosure re-sales.

April is the third consecutive month with monthly appreciation for the Case-Shiller indices, with April projected to be particularly strong. Buyers are experiencing many markets with extremely low inventory, which is propping up prices in the near term, paired with a decreasing share of foreclosure re-sales. The decreasing share of foreclosure re-sales, especially, will impact the Case-Shiller indices positively this month.

Despite the recent uptick in home prices, we do believe that 2012 will end on a lower level than 2011. The chart below shows the Case-Shiller 20-City Composite Index (NSA) forecasted 5 years into the future. We’ve extended the 20-City Index with the Zillow forecast for year-over-year growth in the national Case-Shiller Home Price Index (since the 20-City and national indices track each other very closely). Our Case-Shiller National forecast is based on the June 2012 Zillow Home Price Expectations Survey, administered by Pulsenomics, which surveys over 100 economists quarterly to forecast the Case-Shiller National Home Price Index for the next five years, which will be released next Monday. Zillow anticipates the Case-Shiller National Index to be down by 1.2 percent in December of 2012 compared to December of 2011.

Note, Zillow’s May 2012 data was released this week, Wednesday, June 20th.


About the author
Stan Humphries
Stan is Zillow's Chief Economist. To learn more about Stan, click here