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Rival Indexes Imply Declines for Tomorrow’s Case-Shiller

by Chicago Agent

Results from a number of competing indexes seem to suggest a lackluster Case-Shiller on Tuesday.

Standard & Poor’s will release its much-followed Case-Shiller Home Price Indices tomorrow, and if any rival indices are an indication, it will most likely post year and monthly declines in home prices.

Riding high on a summer buying mini-boom, the last two Case-Shillers had posted national increases of 3.6 percent and 0.9 percent, representing data through July. Other indices, though, from Radar Logic, CoreLogic and FNC, all that have been released in the last week, have posted declines for August.

According to FNC, the firm’s latest Residential Price Index showed a 0.8 percent decline of prices in August. Radar Logic’s composite price index, which follows 25 metropolitan areas, also posted a 0.8 percent decline, and as Bill McBride of Calculated Risk noted, the company’s press release directly linked its findings to that of tomorrow’s Case-Shiller.

“Last month, we predicted that the S&P/Case-Shiller 10-City composite for July 2011 would be about 156 and the 20-City composite would be roughly 143. In fact, the 10-City composite was 156.23 and the 20-City composite was 142.77,” the release read. “The August 2011 10-City composite index will be about 156, and the 20-City index will be roughly 142.”

CoreLogic’s data, which was released last week, showed a decline of 0.4 percent. Of all the complementary home price indices, CoreLogic’s is perhaps the most authoritative, considering the Federal Reserve uses the data in its market studies.

Rounding out the projections was Zillow, which predicted a 0.3 percent decline for the Case-Shiller. Stan Humphries, the chief economist at Zillow, predicted that as the summer buying trend has slowed, a new trend of lower prices will commence.

“After showing monthly appreciation earlier this year and building some momentum, recent weak economic data is starting to be reflected in home values,” Humphries said in a Housing Wire article. “We expect to see continued home value depreciation as unemployment and negative equity remain high … The large foreclosure pipeline will produce relatively low priced REOs in the market, putting downward pressure on prices going forward, and we do expect the pace at which homes exit this pipeline to pick up in the near-term.”

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