Zillow wants to forecast how much individual homes would cost a year from now

A suburban tract home for sale in the predominantly Latino middle class enclave of north Downey, Calif., September 2010. The National Association of Realtors Monday says its seasonally adjusted index for pending home sales dropped 4.3 percent to 101.7 in December. That's still 6.9 percent higher than it was a year ago. The decline signals that sales of previously occupied homes may drop in the coming months. There's generally a one- to two-month lag between a signed contract and a completed sale.

Zillow, the real estate database, launched a new service last week predicting how much a home will be worth a year from now. The Zestimate Forecast focuses on 50 million homes, and forecasts are calculated three times a week.

Zillow, the real estate database, launched a new service last week predicting how much a home will be worth a year from now. The Zestimate Forecast focuses on 50 million homes, and forecasts are calculated three times a week.

The company uses a variety of variables to come up with the forecast, including the supply of homes, projected local unemployment rate, income growth, foreclosure data and so forth.

How accurate are the forecasts? Would a service like Zestimate Forecast help you make a decision on selling or buying a home?

Guests:

Svenja Gudell, Director of Economic Research, Zillow, an online real estate database, who is working on the new Zestimate Forecast

Mark Schniepp, Director, California Economic Forecast, an economic consulting firm that forecasts real estate prices in Southern California based out of Santa Barbara; former Senior Economist for the California State Controller's Office, and consulting economist to the California Department of Transportation