Looking For The Housing Bottom? These Stats Say It Was Back In February 2009.

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For the 7th consecutive month, the Case-Shiller Index showed a reduction in annual home price declines.  That's more than two seasons, folks. Surely, by now, we can say housing is in recovery.

And, even more impressive than the annual Case-Shiller figures are the monthly ones. 

According to the data, 17 of the 20 Case-Shiller markets improved between July and August 2009.  It's one fewer than last month's 18-of-20, but impressive nonetheless.

Market-by-market, the funk is ending. Home values are rising.

Lest we get carried away, let's remember that the Case-Shiller methodology is flawed:

1. It measures home values in just 20 U.S. cities.  Those 20 cities account for a paltry 9% of the U.S. population.
2. Its data is on a 60-day delay.  Case-Shiller doesn't reflect the "right now" of housing. It reflects the "just was".
3. It ignores the "all real estate is local" adage.  Case-Shiller lumps large metropolitan areas into one data reading.

Despite its flaws, however, the Case-Shiller Index remains relevant to housing.

See, as the economy progressively worsened throughout 2007 and 2008, Wall Street put the blame on housing, citing the Case-Shiller Index in support of the argument.  Analysts seemed to revel in the 33 percent drop in home values nationwide.

But now, as the Case-Shiller Index shows improvement, it's making a case that the economy is coming back from the brink.

An improving economy will harm home affordability.

Soon, government stimulus will fade, mortgage rates will rise, and sellers will regain the upper-hand in negotiations. Based on the Case-Shiller home value data, the "right time" to buy a home may have been in 7 months ago -- while the status of the recovery was still in doubt.

For a pre-approval letter for your next home, justand I'll get you started. You may have missed the market bottom, but this is definitely not the market top.  You may want to buy before the Case-Shiller runs its streak to a dozen.