CNBC's Jim Cramer At It Again: "DO NOT BUY A HOME NOW!" Realtors & Associations PISSED.

[The Cleaner]

See the video at http://www.cnbc.com/id/15840232?video=533257614&play=1

[Tandalayo_Scheisskopf]

1. Every onc e in a while...

Amidst all the histrionics and babble, Cramer gets one right.

[Warpy]

3. Depends on the market, Cramer

Smaller cities didn't see the bubble, but they are seeing rising rents. It makes sense to buy a modest place there as a hedge against rising rents. Even if you lose initial down payment equity, you'll come out ahead in the long run as you watch rents outstrip your monthly mortgage payment.

Anybody who takes that screaming loon's advice without looking at their own situation deserves to be taken to the cleaners.

[BadgerLaw2010]

55. Cramer's mile-long disclaimer says to do exactly that.

All of his advice is very much not "one size fits all" and it isn't even necessarily what he does when he's managing for different time horizons.

I think anyone who watches "Fast Money" or "Mad Money" without understanding the underlying subject matter enough to tailor it to fit their own situation absolutely deserves to get smashed.

[LisaM]

2. Arrrrgh, it grates me when people say buy a HOME

You do not BUY a "home". You buy a house. You make a home. I can't tell you how that phrase grates on me.

[Warpy]

4. Yeah, it's right up there with "irregardless"

and "consensus of opinion."

Calling customers "consumers" is another long time pet peeve of mine.

[charlie]

8. And hourly workers "associates"

That enforced-under-duress newspeak galls the heck out of me.

[blondeatlast]

14. I was one of the early victims from my college days in an upscale retailer.

I HATE it.

[Warpy]

25. I remember the grubby "Associates Entrance"

at Jordan Marsh in Boston.

I'm just glad I was an office temp and was delighted when the job ended.

[OwnedByFerrets]

21. and "i could care less" nt

[AnneD]

36. My peeves....

(in Nursing) is calling a patient anything but a patient (client, resident,or customer) and having management give us a canned speech and requiring us to regurgitate this speech to the patients every day.....all in the name of 'customer' service. It denigrates Nurses and cheapens what we do (would you like fries with that enema).:nuke: :grr:

What has happened is that folks are being distracted by the trappings of customer service and being denied quality patient care. Thanks for letting me get that off my chest.

Just an FYI, when Grandpa would have a milk cow impregnated-he said she was being serviced. It took us kids a while to catch on to what he meant. Any time I hear someone talk about serving customers but especially when I hear a politician talk about serving the American Public-I sometimes start laughing like a fool-remembering Grandpa.:spray:

[Warpy]

43. Thanks for reminding me of another reason I left nursing

Management is trying to corporatize every facet of medicine. Newspeak is just one part of it. Staffing by time studies is killing the nursing profession. Human beings are not all alike and expecting them to react the same way metal parts on an assembly line do is just plain nuts. Nurses are left with short staffing and putting their licenses on the line every time they walk through the door.

I called them my patients even when prissy suits were around.

[AnneD]

49. Especially....

when the prissy suits are around! I remember once when the Nurses got togather and wore white and hats. All of a sudden the Nurse shortage was very visible. Management came out with a memo and squashed that 'customer service' idea to make the Nurses more visible.:rofl:

Those that have been Nurses for a long time and are STILL at the bedside are pretty tough cookies-screw with them at your own peril.

[Gormy Cuss]

5. Me too, especially when it's a reference to a townhouse.

That's townHOUSE, not effin' townhome.

Home by itself may be useful shorthand for primary residence since not everyone buys a house as one, but 'real estate' is better.

[pink-o]

7. Another marketing spin...

...but remember, you don't "buy" anything! You buy a loan and the bank buys your house/home while you spend years paying them for it.

I'm addicted--I mean SERIOUSLY ADDICTED as in guiltiest pleasure of all--to HGTV's real estate shows, TLC's Property Ladder and House Flippers. It stuns me to no end how easy they make selling, buying and remodeling look. Also, showing McMansions in Arkansas hardly reflects what the rest of us pay for our abodes. No matter how easy and exciting it looks, I think "buyer beware" is the best doctrine you can have when it comes to real estate.

[Mr. Ected]

6. Rates Are Low, Prices Are Falling

Yeah, dipwad, it's a REAL bad time to buy a house.

[The Cleaner]

9. Problem is, rates will go LOWER, prices will fall FARTHER during this bubble pop.

So don't you think he's got a point?
:shrug:

[Selatius]

12. Investing 101 really. You don't buy until the market hits rock bottom. It hasn't hit rock bottom.

Wait some more. Of course, if you want to risk ending up with a mortgage that is bigger than the value of your home because your home is still depreciating, be my guest and buy now.

[edhopper]

10. Yeah,

"prices are falling!" That means whatever you buy now will be worth less in six months and less than that in a year. Some places may go down as much as 50% before this bust is over.
It is a bad time to buy a house dipwad.

[Mr. Ected]

19. As If There's Such A Thing As An American Real Estate Market

Sorry, but there are pockets in the country where property values were inflated beyond reason; there are other parts of the country where the values have fairly much kept pace.

To issue a blanket statement to all Americans that now is a bad time to buy a house is simply an exaggeration.

Where I live, for instance, in North Georgia, where the supply of new construction was very close to the demand, there is not and will not be a startling reduction in market value.

[Ikonoklast]

13. Don't catch a falling knife

If the price of housing is falling, there is no rush to commit until the market bottom is reached, or at least close. If you buy too early, you may be negative in equity for a few years until the market catches up.

Why buy something today when next month, the property will still be on the market, but at a reduced price? Realtors will always try to stampede buyers with "If you don't buy right now, it will just cost you more tomorrow".

Not in a falling market with more sellers than buyers.

[renie408]

16. Fuck your logic. My husband works in new home construction...GO BUY A GODDAM HOUSE!! n/t

[LisaM]

20. Oh, right. I live in the most overpriced city in the country

(Seattle) - where the housing market has not bottomed out and yet, real wages are not keeping in line at all. Housing prices were forced up for a variety of reasons (Microsoft, California transplants), and no one can afford to buy in the city unless they make over 100K or want to go into serious debt.

[The Cleaner]

24. Same w/D.C.

Same as a lot of places actually. It makes little sense. Who are able to afford these homes?

[grasswire]

22. respectfully....

...he might want to add a sideline. I can't see how new home construction is going to be a safe job.

[renie408]

31. Thanks for the advice. n/t

[Ikonoklast]

29. I *never* buy on emotion

Too much money involved to do anything BUT use logic when it comes to buying and selling real estate.

I have my eye on a an un-improved 4.25 acre commercially zoned property on a state route that has been on the market for over a year. It is currently owned by a church, and they have been dropping the price just about every three months.

They laughed at my first offer, which was one-third of the asking price.

Their real estate agent called back last week to see if I was still interested. I told not him really, as they wanted way too much in a declining market, I'd just wait and see.

I'll make another offer when the snow flies. It won't be as much as my first one.

[renie408]

34. Gee, you mean you aren't actually going to buy a house because I want you to??

No offense, but I didn't actually expect anybody to buy a house just to keep my husband in work. It was a bit of a joke. Well, not to us, but I didn't really mean it.

[Ikonoklast]

40. I knew you were being facetious

No offense taken on my part, believe me.

I was reading that it is possible that close to 40% of all potential foreclosures in California, Arizona, Texas and Florida may be due to speculators and 'flippers' getting caught in a declining market. Why should we, as taxpayers, bail them or their lenders out of a bad business decision?

Maybe someone else may profit from their mistakes, and pick up a nice property at a good price.

[alcibiades_mystery]

32. I should take an economic hit for your husband?

The industry must shake out. If that's your family, well, too bad for you.

Doncha love capitalism?

[trekbiker]

33. tell your husband its time for new career...

at least for the next 3-5 years, maybe longer. This bubble dwarfs the late '80's bubble and it took 6 years from '91 to '97 for that one to work itself out.

I sold my OVERPRICED Calif home at the beginning of this year and plan to rent for at least another two to three years till this crazy Calif market comes back to reality. I figure in two or three years a house in the nieghborhoods I'm scouting will reduce from around $800K to $500K. could take 5 or 6 years even things are so bad.

[alarimer]

39. No thanks

I am not buying a house in a falling market just to keep someone in a job.

Well I'm not actually buying a house at all.

[StrongBad]

41. So because your husband works in construction...

...we should encourage people to make a bad investment decision when all real financial reasoning says otherwise?

On Edit: I see you're being faceitious. 'Sall good...

[Javaman]

30. We have a good solid year and a half before they bottom out...

now is so not the time to buy.

next month the rates reset for the APR's. Then again and again and again...

There is still so much more fun to come...

[Selatius]

11. It's simple. Wait until the housing market is completely at the bottom of the ocean before buying.

That way, you get the best deal possible and the greatest possibility of expanding your equity through a simple rise in housing prices.

[LSK]

15. how do you know when that happens?

[renie408]

17. When prices start going back up and you missed it because you were waiting for rock bottom. n/t

[Selatius]

26. 5 percent rule.

If housing prices switch direction and move 5 percent or more in the opposite direction upward, consider buying. At the current rate, housing prices have already shaved off 50 percent in some markets. Even if it reversed now, you'd still make a killing of 45% savings compared to the guy who bought when the market was at the top.

Edited to add: Apparently your advice to other DUers is biased in favor of buying before the market hits bottom. Mine is biased in the opposite direction, trying to save buyers money.

[trekbiker]

35. 50%???????

where???

[charlie]

38. Detroit

Where houses can be cheaper than cars:

http://www.reuters.com/article/domesticNews/idUSN1927997820070319?src=031907_16_TOPSTORY_houses_cheaper_than_cars_in_detroit&sp=true

[BadgerLaw2010]

53. 5%? Maybe if you live in a market that wasn't massively overinflated.

In markets where the price is divorced from what people actually earn in reality, there is no floor short of prices slightly below what would be reasonably affordable to the average buyer in those markets.

House price is a function of income, it's that simple. Discrepencies will be corrected, and they will not be corrected by employers increasing wages.

[BadgerLaw2010]

52. Missing by 2% on the way up is better than overpaying by 30% on the way down.

Drops as severe as this in housing will not suddenly arrest and snap back in the same month. Housing cycles are too slow and the market is waaaaay too varied and inefficant for that. Compare what is involved in trading stocks to what is involved in buying a house.

Housing normally appreciates very slowly.

Errors in pricing on the way down are absolutely disasterous, because guess what your mortgage is for. It ain't the value once the house finally bottoms. And guess what you're doing with the extra money you paid. You're paying interest.

Absolutely better to err on the side of slightly missing the bottom than buying in to a freefall.

[Bentcorner]

18. I noticed during the last two housing bubbles, it took the same amount of time

for the houses to drop as it did for them to rise.

[DemocratSinceBirth]

23. Without Getting Into This Pissing Match...

Homes aren't stocks... They are tangible...

[alcibiades_mystery]

27. He's right

Prices will come down another 5-10% over the next eight months.

Fuck the realtors association. They can eat a dick as far as I'm concerned. These fuckers were aiding and abetting the corrupt sub-prime nuts for commission checks, and they encouraged risky and stupid house flipping nonsense on a large scale.

[Mr. Ected]

42. Why Don't You Blast the Ignorant Consumers As Well?

Sorry, pal, but no one forced anyone to make deals. Realtors and lenders were selling dangerous wares. But last time I checked, only adults were able to sign the documents.

[alcibiades_mystery]

48. Consumers were idiots, too

It doesn't change the fact that professional realtors were turning a dollar selling houses they knew people couldn't afford. Fuck 'em with a stick, I say. You don't get out of ethical breaches by braying caveat emptor like a fucking donkey, ya know?

[alstephenson]

28. He was on the Today show this morning...

debating a representative of the Realtor Association. Now while I don't necessary agree with Cramer, especially because he is generalizing by looking at the national scene rather than individual markets, the Realtor guy didn't do a very good job of supporting his position (DO BUY A HOME NOW!). Cramer makes the point that buying a home now would not be a good investment and the Realtor guy came out with a calculation of return on investment assuming appreciation of 5% per year. Now, we all know most markets are flat at best, and declining in some areas, so that dog just doesn't hunt anymore.

[BlooInBloo]

37. ROFL! He might be right, but only because the market hasn't bottomed out *yet*...

... I.e., from the homeowner's perspective, it's gonna get worse before it gets better.

[EnviroBat]

44. Aww damn! I just bought my first house...

Well, I should just go choke down the barrel of a 12 gage right now! I bought less house than I could afford at a FIXED INTEREST RATE through a REPUTABLE LENDER. I will make my modest mortgage payments for the next two years while the interest rates continue to drop, then I will re-finance the place at a lower FIXED rate. I paid $3000 less that the house was appraised for, so overall, this has been a great time to buy a house because I did it the smart way. I no longer flush hundreds of dollars a month down the toilet to an apartment complex, and I will finally realize some tax breaks.

Cramer can suck it. Does anyone take this asshat seriously?

[Vinca]

45. Thanks Cramer. My husband's business is real estate based

and we're in the worst slump in 25 years. A few more months and I might be panhandling to buy the cats their Fancy Feast.

[edhopper]

46. Cramer is only

the messenger. You might reserve your anger for Bush and Greenspan, who allowed this mess to happen.

[Egnever]

47. Yea its his fault.

:eyes:

[AnneD]

50. Or maybe it gets so bad.....

Your cat's become a fancy feast.:spray:

[Vinca]

51. No, no, no, no, no. No kitty pot pie allowed.

By the way, I'm not blaming Cramer, but he is rubbing salt in the wound.

[AnneD]

61. I keep getting these...

funny images of you pimping your cats for catnip and fancy feast. I can see them rubbing up against some sugar daddy's legs, rolling on their backs-they are not too subtle at times:spray:

[BadgerLaw2010]

54. So Cramer should encourage people to get massacred for your sake?

Avoid falling knives. Especially when you have to pay interest on them.

[noel711]

56. Did you hear his rant...

the other night about 'breaking the union,' in regard to the Auto workers strike? Idiot. Screaming idiot. Why do all the screaming idiots in the world get all the talk shows..? Count them: Cramer, Limbaugh,
Matthews, O'Reilley? Is that all it takes to 'make it' in media?

[OnceUponTimeOnTheNet]

57. I tried the link, but it kicked me clear off the internets.

Is it available anywhere else? I always enjoy a good Cramer rant.

[Politicub]

58. With the falling dollar

prices are going to go higher and higher, pricing more and more people out of the market.

Just look at hotel room prices in NY and Chicago. It's nuts! I'm traveling to Chicago for a conf. in Oct., and the Marriott is $450/night. INSANE!! The W Hotel, nearly $700/night. Those prices used to get a room in the nicest of nice hotels.

[edhopper]

62. Since we already have an historically high inventory,

who is going to buy the higher and higher priced home. Prices are now at 10x median income in some places, instead of the usual 3x. Supply and demand my friends, supply and demand.

[KillCapitalism]

59. Cramer is awesome, he gives great advice.

I follow his advice religiously and it's always helped me. The man is a genious, and I love to see him throw tantrums on TV like a 3-year old who just had their kitten snatched from them.:rofl:

[hatrack]

60. FWIW, there was a hilarious NAR ad a few months ago, to wit:

"It's a great time to buy or sell a home!"

Which is rather like saying "It's a great time to buy or sell GM stock!"

Utterly nonsensical.