Zillow Forecast: June Case-Shiller Composite-20 Expected to Show 0.3% Increase from One Year Ago

Posted by: Stan Humphries    Tags:      Posted date:  August 24, 2012  

On Tuesday, August 28th, the Case-Shiller Composite Home Price Indices for June will be released. Zillow predicts that the 20-City Composite Home Price Index (non-seasonally adjusted [NSA]) will be up by 0.3 percent on a year-over-year basis, while the 10-City Composite Home Price Index (NSA) will be flat on a year-over-year basis. The seasonally adjusted (SA) month-over-month change from May to June will be 0.9 percent for both the 20-City Composite and the 10-City Composite Home Price Index (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 June Zillow Home Value Index data, and national foreclosure re-sales.

This will be the first month with positive annual appreciation in the 20-City Index since September of 2010. In 2010, home prices showed increases due to the Federal home buyer credit, which artificially lifted the market. This time around the home price appreciation is organic and represents a recovering housing market. Zillow has called a home value bottom for the national real estate market with many regional markets experiencing inventory shortages and strong near-term price appreciation. While the Case-Shiller indices have been appreciating at a healthy clip for the past few months, we do expect them to moderate and likely report monthly declines towards the end of the year, largely as a function of declining overall monthly sales volume which will increase the percentage of foreclosure re-sales in the transactional mix being tracked by Case-Shiller.

The chart below shows the Case-Shiller 20-City Composite Index (NSA) forecasted five 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. Zillow anticipates the Case-Shiller National Index to be down by 1.1 percent in December of 2012 compared to December of 2011.

For those of you interested in more recent data on the housing market, Zillow’s July 2012 data was released this week, Tuesday, August 21st and can be found here. The Zillow Home Value Index does not include foreclosure re-sales, and we expect it to increase 1.2% between June 2012 and June 2013.

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