Cramer on BloggingStocks: Don't believe the latest doomsayer's housing hype

I fully understand that this is anecdotal, but I have a house listed in the Phoenix/Scottsdale market that my realtor requested be cut by (an additional) 20% in order to get ahead of the next wave of foreclosed properties that will be hitting the market.

Basically, he seconded this (Amherst) narrative, that banks are holding back on foreclosure on $500,000+ properties everywhere. There are tenants still living in many of these properties, making no payments, but their banks will not "bite the bullet" and take a 30%-40% write-off on half-a-mil.

I know you want to be right, Cramer (on the housing bottom) ... but you're not. The big picture question is whether banks can make enough money in their other business lines to offset the mortgage loses that are still concealed. Considering that the Fed is committed to 0% interest for the next 3 quarters, they (the banks) might just get away with it.

i'm going to go out on a limb here and compare your report from the NAR (not exactly an unbiased party) to the US Official Unemployment Numbers:

Both are useful for comparision from period to period and probably get the overall direction mostly right, but both are known to be inaccurate due to the info they leave out.


The NAR underreporting the number of houses for sale due to what some call a shadow-inventory of vacant homes held by banks and being released slowly so as to control the housing crash, and aided by crappy changes in accounting rules and by free fed money thrown on the table for first timers is not what many would quite call a recovery.

yes... and banks want to commit foreclosure suicide,you write nice but you are a moron....to even think that all the banks are going to dump all these homes on the market at once so that they can really take a beating,,,i'm sure that your one of the special ed people that got a mortage with no money down and no job that the dems set up for you through fannie and freddie and then blamed the republicans for all your troubles

Jim,

As much as you want to believe that the board of realtors numbers do not lie and you have good handle on the banks. you are missing a little known fact. People who have jumbo loans are not inconsideration for foreclosure because there is nobody there to underwrite the loan. there are many people in this catagory. I am one of them. they will not refi or negotiate or foreclose. Houses stuck in limbo. the banks are saving the worse for last. I know in palm beach county alone 1 in every 3 people you speak to is in a similar situation.. there houses are not on the MLS either.. HMMMM

One thing that bothers me and I would like an answer on is:

The number of housing contracts has increased over the last few months. People have been saying this is a sign of a housing bottom and that things are getting better.

I look in the paper every week at the housing contracts that have been executed in order to get an idea of the value of my house. Over 50% of the contracts are homes being transferred from one bank to another bank, bank to city, or city to another bank or community investment corporation.

Aren't all of these transfers counted in the numbers??? If so doesn't that distort the numbers by quite a bit. I mean a bank contract is a bank contract and would count as a sold home, right?

But if all of these contracts are being executed and counted, but not actually bought by real people for a primary residence. Wouldn't that show that the housing market is actually far weaker but using distorted numbers to show that the picture is improving in order for the banks to game the market.

Jim, it's not just the Amherst report that is calling for a flood of foreclosures being dumped on the market.

This is from Wednesday's WSJ:

Ivy Zelman, chief executive of Zelman & Associates, a research firm based in Cleveland, believes three million to four million foreclosed homes will be put up for sale in the next few years. The question is whether the flow of these homes onto the market will resemble "a fire hose or a garden hose or a drip," she says.

Granted, 3-4 million is less than the 7 million predicted by Amherst. But it does increase the validity of the "doomsayer's housing hype" as Cramer so eloquently put it.

Jim, all your analyses and data studies cannot replace getting out on the street (no, not Wall Street) and observing what's going on. There are many more stories like ebrandler34's that need to be told. There are three foreclosure homes within one block of my house in the same type of limbo that's described by Laurie Goodman -- bank-owned homes which banks refuse to put on the market at these depressed prices.

Shooting the messenger (Amherst) is not the answer.

It's not the glut of foreclosed houses we need to worry about folks! It's the lack of available, ready buyers we will be facing as high unemployment and low paid jobs continue to be a factor. Minimum wage jobs and unemployed workers doth not homebuyers make!

i would pick door number 4. I have a friend that owns 4 condos, hasn't made a payment in 2 years no foreclosure letter. hmmmmmmmmmm