I'm not a bear, I'm a realist. Let's get that out first.

Today's headlines from the folks at S&P/Case Shiller are not untrue, they're just not the whole picture. Yes, home prices, in most areas (and by no means everywhere) are no longer in freefall. Some local markets have hit bottom, others are falling less precipitously, and still others are showing some strength.

But if we're going to be forced to spew these national numbers, that the markets seem to crave (for some reason that I generally and specifically don't understand), then we have to take them with not a grain, but a shaker of salt. The top ten and top twenty market composites that the S&P/CS folks report are off their lows that we saw at the end of 2008 and beginning of 2009. Even the year over year numbers show it.

• Slideshow: 10 Most Affordable Metro Areas

But take a look at the market breakdowns, month to month, which all the bulls tend to push, seasonally adjusted vs. non-seasonally adjusted.

Source:Standard & Poor's and FiservData through July 2009

So here you can see that the gains are moderated quite a bit when seasonally adjusted.

Why?

Because whether we're in a housing boom or bust, home prices always rise in the spring/summer months, due to the type of buyer largely in the market.

Families, i.e. move-up home buyers, looking to close and move over the summer so as not to disrupt school, dominate the market in the spring and summer.

They are, for the most part, buying larger, more expensive homes, and they therefore skew the median home price in their market higher.

In the fall and winter, you tend to see more first-time buyers as well as more single buyers who want smaller, lower-priced homes.

That's just a fact.

Now, you can argue that this spring and summer we saw more first-time home buyers than usual (an estimated 350,000) because of the $8000 tax credit, so that would push prices lower because they're buying less expensive homes, according to the previous paragraph. BUT, remember that they've also got $8000 more in buying power, which, again, pushes prices higher.

So, the question going into the fall, as that tax credit nears expiration Nov. 30th, is can this price trend continue? I doubt it. The other issue of course is foreclosures, which fell in June and July due to a process delay by banks, as they ramped up the government's loan modification program. There were also some state moratoria in effect as well.

• Slideshow: Million Dollar Homes Across America

There is now an estimate out there that rising foreclosures will add 7 million homes to the for-sale inventory over the next two years. Inventories of new and existing construction have been falling, but that could U-turn this fall, as foreclosures rise, banks let go of the homes that didn't qualify for modifications, and job losses push good quality borrowers into default. Pile that on top of seasonality, and I'd watch for home prices to dip again as we get readings on the fall months.

Questions?  Comments?