Hope the Fed Sees Housing's Cooled

Stuff's not moving. Especially second-home stuff. It's like the spigot just shut off. And prices are now coming down, maybe dramatically.

There, that's my take on what's happening right now in the housing market, a market that has suddenly gone from great to just plain awful, particularly on the high end. The combination of raw materials costs vaulting dramatically higher and the expense of the longer commute or the drive to the second home has simply taken the wind out of the sails -- or sales -- of one of the great engines of the last five years.

Will the Federal Reserve see it? Does the Fed have the contacts to see it? Is the Fed too focused on its agenda of raising rates to realize that it doesn't need to raise rates?

That's what makes this such an important week.

First, how good is my information? Pretty good, given that I am not allowed to own individual stocks, except for my charitable trust, ActionAlertsPLUS. That has, over the last few years, forced me to move into real estate in a major way. I look at numbers across a wide series of portfolios and I can tell you that, without a doubt, this market peaked in January and has had a real notch down this summer. In fact, the only place where it is still rising is in Mexico, and the negative piece in Barron's this weekend quoting Doug Kass -- which you could have read about in his musings on our sister site, Street Insight, well in advance -- might even kibosh those investments.

Of course, if you own one home and you commute to work, you aren't going to sell your home to get closer to your job. Nothing that drastic. But the second-home market is truly frozen right now, frozen to the point that speculative properties, particularly the ones I monitor, have become "untalked about," meaning that people who have put money up for them are trying to figure out how to walk away from them.

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James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for ActionAlertsPLUS by clicking here. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." Cramer appreciates your feedback and invites you to send him an email by clicking here.