Investment homes and second home purchases grabbed a 41% share of all closed home sales in Arizona for the month of August. This is great news for one of the hardest hit markets in the U.S.

It makes sense though if you take a close look at the numbers. The Case Schiller Index hit a level of 102 for the month of July, 2009. The CS index peaked in the mid 200's in May of 2006 and we haven't seen the index at 102 since July of 2000. Yes, that's right, 2000, not a typo.

In short and in English, prices have came down from an average sales price of 260K a few years ago to below 130k today, a 50% decline.

With the median home price value at 2000 levels and interest rates at or near an all time low, it's no surprise that the ingredients are already mixed in for a housing recovery in Arizona.

One other thing to keep in mind for all of you that are trying to time the bottom and are sitting on the sidelines.........for every 10% decrease in home prices, it only takes a 1% increase in mortgage rates to increase your monthly payments.

So, for example, you wait to buy and home prices drop another 10% from the 50% that they already have and rates tick up 1%. You will actually be paying more for your monthly payment than if you bought today at today's home prices with the current low rates that are available. DON'T FORGET that the $8,000 first time home buyer tax credit expires next month in November. You are also able to amend your 2008 taxes and get your money in a couple of weeks instead of waiting to do your 2009 returns if you pull the trigger to buy now.

One final thought on the bottom for Arizona real estate. Arizona has seen the third consecutive monthly increase in the CS index after 37 straight monthly declines, so in my opinion the floor has been set and affordable housing has returned. Just don't expect your home to double in value in a few short years again because lending standards have changed forever........or at least until the next couple of generations forget about the crisis we are in today, just as we forgot about what our grandparents and great grandparents went through in The Great Depression.