Two headlines from this weekend's

Newark Star Ledger

tell more about housing than



Federal Reserve

might say:

"Bear goes the neighborhood in Colonia"


"A closed fort holds acres of possibility."

At the heart of the current and continual housing boom is a tremendous land shortage. This land shortage will


be cured by higher rates, short or long. Sure, you can cool any market with superhigh rates, but remember, the market sets those mortgage rates and I don't see that level of demand out there.

But what I do see is an unbelievable land shortage just at the time when we have Third-World-like population growth.

The combination of incredibly robust population growth -- we're not Germany, France or Italy -- and the land shortage is not just a California problem. In New Jersey, where I live, things have gotten to extremes, as these two headlines show.

First, you know you have pretty much built everywhere that is left when you are building houses where the bears roam, and that's the case with the homebuilding in Colonia, N.J. Put simply, we've eaten up all the vacant land and then some. These bears aren't off course; we are just building where they live.

It's the second story, though, that really tells how short of land we are. One of the targeted base closings, Fort Monmouth, sits on 1,126 acres of land in Monmouth county, which is one of the highest-growth counties around. I suspect this land will capture the same level of attention that the El Toro base recently saw when the feds sold that land in Orange County.


(LEN) - Get Report

paid $650 million for that 3,719 acre parcel.

The reason I

won't recommend shorting the homebuilders here is that Lennar,

Toll Brothers

(TOL) - Get Report

and a handful of other companies have the land. They are

land banks, they are the ones with the repository of undeveloped land. They bought it shrewdly, before values really took off. When you short a homebuilder, you are shorting raw land in an environment where land simply is in such short supply that you have to bid on closed military bases and you can't avoid bear habitats anymore.

I know that it is fashionable to short these stocks. I have worried about them myself because they are very much in the Fed's crosshairs. But we have to realize that you aren't so much shorting a builder of something sensitive to rates when you are shorting Toll; you are shorting a very smart company that has oodles of land where it can be used.

Very few others have that.

And they sure as heck aren't making more of it.

Random musings:

Mike Price was just speaking positively on

Bloomberg Television

about his largest position,

Sears Holdings


. Man, he's the best!

At the time of publication, Cramer was long Sears Holdings.

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