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On Tuesday, S&P/Case-Shiller released their data for February sales and resales of the same homes. Bloomberg News spins the new numbers as a positive sign (Oil rises as Case-Shiller report shows improvement). Their story begins:

Oil rose in New York after home prices in 20 U.S. cities dropped at a slower pace in February, bolstering optimism that economic expansion will accelerate in the world's biggest crude-consuming country.

Futures climbed as much as 1 percent after the S&P/Case-Shiller index of property values fell 3.5 percent from a year earlier, the smallest 12-month drop since February 2011. Crude also climbed as equities rose on better-than-estimated earnings. An Energy Department report tomorrow may show that supplies rose 2.65 million barrels, according to a Bloomberg survey.

"The housing numbers aren't great but they have improved," said Bill O'Grady, chief market strategist at Confluence Investment Management in St. Louis.

The actual numbers are graphed below (after dividing by the CPI to subtract inflation):

About 1 year ago, my father, son and I wrote a commentary for the American Thinker called House Prices in Free Fall. We predicted that house prices would continue to fall. Specifically:

If current trends continue, real house prices (house prices after subtracting inflation) will likely lose about a quarter of their real value over the next 4 years. If inflation continues at about 2%, this would produce a four year fall in actual house prices of about 4% per year.

At that time, the latest real Case-Shiller house prices index (seasonally adjusted) was from January 2011. That value was 137.10. In February 2012 it was 127.34. That's a fall off of 7.1% over 13 months, a 6.6% rate of fall per year. We are precisely on-track with our prediction that houses will lose about a quarter of their real value over 4 years.

Bloomberg's numbers are essentially the same as ours. The main difference is that they ignore inflation which was 2.87% from February 2011 to February 2012.

Bloomberg sees the curve as flattening out because the fall in house prices from January to February 2011 was slightly greater then the fall from January to February 2012. But when I look at the curve, I see a relatively straight line. What do you see?

Source: Bloomberg Spins Case Shiller Numbers As Positive Trend