As Predicted, Case-Shiller Shows Annual Depreciation, Falls Slightly Farther Than Expected

This morning, the S&P/Case-Shiller Home Price Indices showed that the not-seasonally adjusted September 10- and 20-City Composite declined 3.3% and 3.6% on a year-over-year basis, a sharper decline than what was anticipated in Zillow’s forecast, which we released last week. On a seasonally adjusted monthly basis, the 20-City Composite fell 0.6% from August to September while the 10-City Composite fell 0.4%. The table below shows how our forecast compared with the actual numbers.
“Nobody should be surprised by further home value losses in the remaining balance of this year and into next year,” said Zillow Chief Economist Stan Humphries. “Despite record high affordability of real estate, the psychology of home buyers is still being weighted down by economic uncertainty, keeping them on the fence when it comes to buying homes. Moreover, we do expect foreclosure liquidation rates to increase in the coming months as banks try to unload their backlog of foreclosures accumulated in the post robo-signing period. This will also put downward pressure on home values. The good news is that we expect these remaining home value losses to be relatively minor in comparison to the declines from the market peak to current levels”
To see how Zillow’s forecast of the August Case-Shiller indices compared, see our blog post from last month.