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

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.