The Bottom, According to Jim
CNBC’s colorful financial guru Jim Cramer, who has a pretty good track 
record when it comes to housing-market predictions, made another one this week: The housing market will bottom out in the third quarter of 2009.
One reason for his prediction: The stock price of the nation’s top home-building companies, such as Pulte and KB Home, peaked one year before housing did, in July 2006. The charts say that those stocks hit bottom last month — three years after they peaked — so he thinks the overall market will do the same.
Cramer’s got street cred when making calls on housing. Remember when he told you last year that anyone who bought a home then would lose money on the purchase? They did. (Remember how the National Association of Realtors freaked out when he said that?)
Cramer lists a bunch of reasons why he thinks the market is bottoming out: inventories are getting lower; mortgage rates will come down when Fannie Mae and Freddie Mac are taken over by the government; most teaser-rate loans will reset this year; and demand for housing will continue to increase.
It’s important to keep in mind that Cramer is talking about the national market. Here in California, the outlying areas, such as the Inland Empire and Central Valley, likely have already hit bottom. But the higher-end areas, particularly Orange County, may still need to fall more. Prices are still out of reach for a great many buyers.
Furthermore, hitting bottom doesn’t mean we’ll bounce right back up, like a 
SuperBall. More likely, we’ll land with a thud and sit there for awhile, like a sunken ship, until incomes increase and the economy settles down and people become more comfortable buying.
Hope you all have an enjoyable and safe Labor Day weekend.
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