Stay Ahead of the Lagging Housing Index

Terrific! The Case-Shiller index says home prices bottomed in June! That's right, June figures showed that all 20 metropolitan areas increased since the previous month, ending the long slide, and the keepers of the index declared that a bottom in housing had occurred June 30.

There's a problem, though, a problem I knew that would cause an issue when I made my prediction that prices would bottom June 30. The index doesn't give you a June reading until the end of August. At that point it will be so painfully obvious it won't matter.

Yep, it will take two months for this silly index to register June readings, and if you're an investor, by then it will be too late. It will be obvious that foreclosed property held by banks will be worth more than it was when the institutions repossessed them, and that the Other Real Estate Owned category will begin to go down in value from sales or actually be viewed as a positive because there will be so little inventory left, a combination of low price, low rates -- remember that 5.5% rate that freaked people out? we've round-tripped that back -- and little new home construction.

The hazards of waiting for an all-clear have never been more deadly for those debating buying Bank of America (BAC - commentary - Trade Now) or U.S. Bancorp (USB - commentary - Trade Now) or Wells Fargo (WFC - commentary - Trade Now), which are so levered to Case-Shiller. I own BAC and WFC, and I have to tell you that by the time you get the all-clear, I expect to be cutting these positions in half to take the gains I expect when everyone recognizes the housing bottom.

As usual, I do not expect this to be good news for the homebuilders. The homes being sold are foreclosed homes that must be sold, and they are driving down the cost of a new home to the point where it is not economical for many builders to build, something that should have happened a year ago. I see people buying Lennar (LEN - commentary - Trade Now) and KB Home (KBH - commentary - Trade Now) and that's fine, but don't do it on my account.

Oh, and despite the endless attempts by editors to somehow imply that a foreclosed home sale isn't any good vis-a-vis a non-foreclosure sale, I come back and say, so what? A home sale is a home sale. Anything that removes inventory gives you equilibrium, and equilibrium means an end to house price depreciation, which was the root cause of the recession and was the genesis of the short-lived garden-variety depression bracketed by the fall of Lehman and the announcement by a few key banks in early March that they were profitable.

Random musings: Dell (DELL - commentary - Trade Now) device is all about mobile Internet. So is the Comcast (CMCSA - commentary - Trade Now) / Clearwire (CLWR - commentary - Trade Now) announcement. These are the biggest thing to hit tech since the Internet itself. Best play: Qualcomm (QCOM - commentary - Trade Now), the brains behind 4G and a stock that has been stuck at $45 for a very long time.

At the time of publication, Cramer was long Qualcomm, Bank of America and Wells Fargo.

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Jim Cramer is co-founder and chairman 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.

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