Today, Pulsenomics released the Zillow Home Price Expectations quarterly survey of >100 economists and real estate fans (including me), of home price forecasts for the next few years. Click here for link to survey results. This survey represents a break from prior ones in that the reference index for forecasts has switched from the Case Shiller National index to the US Zillow Home Value Index (ZHVI).
The change might result in small adjustments to forecasts. While the ZHVI and Case Shiller CUS10 index have “generally” moved in the same direction over the last few years, they diverged in the runup and fall in home prices during the 2005-2008 period. The CUS10 index also has seemed to show more variability over the last few years. ( I welcome someone to write a guest column highlighting the differences and possible implications for forward pricing.)
(Note that rather than contrast the Case Shiller National Index (which is released quarterly) with the ZHVI index (which is released monthly), the graph to the right shows the monthly ZHVI index versus the monthly CUS10 index. While this introduces yet another index, the CUS index is the reference for the CME-CUS futures contract so it may be more familiar to readers of this column.)
Net – the Zillow survey remains the most comprehensive survey of home price expectations that I am aware of. Anyone looking to trade housing derivatives should be aware of the results (headline +3% for 2013, but read the entire release for details and color), and as importantly, the dispersion in the forecasts.
I leave readers to click on the pulsenomics link to see the charts and tables. I’m going to do my quarterly badgering of the survey outliers to see if I can guilt them into a trade.
As always, please feel free to contact me firstname.lastname@example.org if you’d like to discuss the survey or any aspect of housing derivatives.