A mea culpa may be in order, but not from Cramer.
Last summer there was a lot of talk about how the end of the first-time homebuyer tax credit would hurt existing-home sales and cause a big decline in prices. But on Thursday we got December existing-home sales numbers that showed a sharp rise in activity and an actual bump in the median full-year price for 2010—up 0.3 percent from the year before.
No, that’s not a significant increase, but keep in mind it’s also the first gain in four years. And that despite the fact that more than one-third of homes are distressed, meaning they’re foreclosed properties.
Cramer said this existing-home sales number, coupled with Wednesday decrease in housing starts, has created a “monumental shift” that explains the turn in housing. Fewer new homes are being built, which helps to shrink the overall housing inventory and boost prices. It also puts the emphasis on existing homes, and explains the good numbers we got today.
This has Cramer thinking the housing market’s “on the mend” and that “the bears who keep saying that the market would fall off a cliff after the tax credit, they were just plain wrong” and “owe us an apology.” After all, they kept lots of investors out of some big moves in companies like Lowe’s , Sears , Masco and Whirlpool .
Now there’s little doubt that these very same bears will soon try to discredit these existing-home sales, Cramer said, but he’ll chalk that up to the same kind of disinformation we got when they said the end of the tax credit would hurt the sector. Not true. If there really were a glut of houses, people wouldn’t be buying. But they are.
“These good numbers can’t be denied anymore,” Cramer said. “The decline in value of homes is over. It ended a year ago, as I told you it did. I await someone, anyone, to come out and admit that they were wrong this summer. But they never will. They have no accountability. It disgusts me. It should disgust you.”
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