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Cramer: 'Realogy Is For Real'

NEW YORK ( TheStreet --

Debra Borchardt:

Realogy (RLGY - Get Report) is going to be reporting their earnings on May 1, but ahead of that we're going to talk about this hot real estate stock. Jim, we all know that the real estate market has been definitely on a path to recovery.

Jim Cramer:

Right.

Debra Borchardt:

It seems to really be heating up, just lately. This company, also they just redeemed many of their notes with their IPO proceeds.

Jim Cramer:

Right.

Debra Borchardt:

Company went public, now they've been up 33% since they went public.

Jim Cramer:

Right. This is a classic case of a deleverage situation. They do issue stock, they pay down debt, the earnings per share goes up. That's kind of what Ben Bernanke wanted when he decided to lower rates, you can refinance everything. The important thing is that Mr. Smith, who's the CEO, said there's a housing shortage. It's not a developing housing shortage, there's just a housing shortage and that's how prices are going up 20-30%.

We were discussing before we did the video that we both know people...where there's multiple bidders now for most, because there's not been any homes...if you look at the number of homes that were created and you look at the number of households that are created and you look at the number of homes that are destroyed by a fire or flood every single year. You realize that we're just not putting up anywhere near the homes...and it's been seven years. Seven years of a downturn is a very long time. When you look at Realogy's numbers, you recognize that this is still trough. As amazing as that sounds, it is still trough, particularly for this company, which had so much debt on.

Debra Borchardt:

Now, you and I were just talking before this taping about how, like we said, neighbors that we know that have put their house up for sale - had multiple bidders. The one I knew, every bidder had a 20 or 30% down payment they were willing to do. So, it sounded like there was a lot of pent up demand, people were saving their money and waiting.

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