Alt-A. Endless bank foreclosures. Commercial real estate. These are the big three worries that will not be killed by data, rigor or common sense, no matter what happens.
Doesn't it occur to anyone that there already should have been a big spike in commercial real estate losses by now? That the decline in the economy has lasted long enough that it should have manifested itself? Doesn't anyone think that there should have been a big commercial real estate bad-debt bump at a Citigroup (NYSE: C) (Cramer's Take) or a JPMorgan Chase (NYSE: JPM) (Cramer's Take) or a Wells Fargo (NYSE: WFC) (Cramer's Take)?
And bank foreclosures hitting real estate markets? California's median home price has gone up for three straight months. The fact that 50% of the homes are foreclosed homes doesn't matter if the price has gone up. The supply's also been cut drastically year over year.
Remember, there are two numbers to watch: the year-over-year and the linked month. Only the linked month matters because prices have fallen huge in the last year. All year-over-year comparisons, therefore, are going to look deadly.
But month to month?
Up.
That, again, is the bottom.
These woes will prove bogus. And if this economy starts ACTUALLY CREATING JOBS then you will see an actual turn up here instead of the modest flat-lining we are getting in real estate and the real economy.
Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long JPMorgan Chase and Wells Fargo.
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Reader Comments (Page 1 of 1)
6-26-2009 @ 9:53AM
bobby knight said...
Is this dude still blabbing? Who ever listens to him?
6-26-2009 @ 10:19AM
Dan Barnett said...
But most of the REITs are still in the tank. NCT is less than a buck.
If this is the bottom, I'd like to see some more positives in the sector.
6-26-2009 @ 11:57AM
Iridium said...
The losses are being hidden from the balance sheets you moron. I thought you were smart enough to see that.
All over Ohio we have sprawling retail complexes with empty buildings. In Cleveland a major investor just pulled out of a billion dollar residential/commercial complex. The shells for the stores are all standing with nothing going inside.
Someone has to pay for the real estate.
6-26-2009 @ 2:00PM
beachpaul said...
"These woes will prove bogus." You went out on a limb, Jim. Place your bets folks. August and September puts are going to be fun this year.
6-26-2009 @ 2:47PM
Sharon said...
Good old Cramer...behind the 8 ball again. Wishful thinking on his part. He thinks the foreclosures of the Alt A, and commercial is gone? Think again, they are on the backburner in government imposed moratorium...BING that word. You won't have to wait much longer Cramer, maybe a few years.
6-26-2009 @ 2:52PM
Frank Stayduhar said...
He is loud and abrasive but when I saw him wave a John Galbraith book and pretend it was economic wisdom, I realized he is also dumb!
6-27-2009 @ 11:16AM
Steve said...
A house on my street that is identical to mine just sold for $20,000 less than I paid... 11 years ago.
Sure, median prices have gone up for three straight months. That still doesn't bring them to the levels they were in 1998.
Jim, you only read the "statistics" about real estate. You need to get into the trenches to understand what's really going on.
And until you do that, your advice regarding real estate is pointless.
6-28-2009 @ 9:51PM
Ynot said...
Jim Cramer is the pom-pom girl for the government. There is as much a chance of the government telling the truth about what is happening as there is of Jimbo growing a full head of hair. You lying bald A$$.
6-29-2009 @ 6:13PM
George said...
Cramer nailed this call on Hudson City Bancorp (NASDAQ: HCBK) - time will prove him right. as for real-estate he has called a drop in the decline not the total end, but this is the start, stop looking back - you make money going forward.