The Nazz May Help in Forecasting Housing

Are the California and Nevada and Florida and Arizona and Michigan and Indiana and Ohio housing markets the Nasdaq, and is the rest of the country the S&P 500 in 2000?

That's what it feels like. The "all real estate is local" nonsense that we endlessly hear from the real estate people is like saying that all stocks are local. Actually, real estate and stocks are regional in nature, and the region that is Nasdaq took a horrible beating in 2000-2002, while the region that was S&P 500 barely got hit.

That's how the housing market is shaking out. It seems like the housing markets in the terrible states won't settle until you have 50% declines in value at least, while the rest of the country seems poised for no more than 15-20% -- if that.

Cramer: Watch the Nasdaq to Predict Housing

The problem is that the Nasdaq-range of houses were all like dot-coms and tech: They had little or no value, or they were like Intel (INTC - commentary - Cramer's Take) and Cisco (CSCO - commentary - Cramer's Take) and Microsoft (MSFT - commentary - Cramer's Take) and were going to take a beating.

The owners of the Nasdaq got crushed, margined out and lost billions of dollars. That's what is happening to homeowners in those homes bought during that time. The people who bought on margin are already gone. Those who are still living in their homes need to have help to keep them in the NASDAQ-HOUSING market or they need house price appreciation.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim 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 Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.