With shares trading around $13,
is a stock people should consider buying here, Jim Cramer said Tuesday on TheStreet.com TV's
Wall Street Confidential Web video
CEO Mitch Caplan survived, said Cramer, by moving his company into mortgages. "He's an incredibly honest man; he's a got a great franchise," Cramer said. "His mortgage business did what everybody else's mortgage business did, it got hurt." However, Caplan has addressed it head on, he said. "Your money's safe at E*Trade."
The financial institution's covenants are in order, unlike those of the homebuilders, Cramer continued. "I don't know if I'm a buyer of the homebuilders because they might be in violation of their covenants as they mark down their properties, but E*Trade is not in violation," he said.
Switching the topic to New York real estate, he pointed to private player Manhattan Mortgage, which he described as the one mortgage company in New York for almost anyone who needs a mortgage of more than $1 million. What's amazing, Cramer explained, is that business is up big.
"August was a huge month in New York and the spreads are still very tight," Cramer said. "That's how I know the market's really healthy. I don't care where the price is, but the spreads are tight."
If people want to buy a property that's listed for $1.8 million, they'll purchase it for $1.8 million and be able to sell it for $1.79 million, he explained. "The health of a market is the bid and the ask."
In addition, 10% of the mortgages that were taken in August were in non-dollar denominated financing, Cramer continued. Plus, inventory is down 23% year-over-year in New York and there's no new construction going on in the city right now, he added.
"So you have the exact opposite than the rest of the country," Cramer said. "You have a tight bid-ask, you have foreign buyers who are the marginal buyers, and you have no new construction."
Meanwhile, the rest of the country is being flooded with construction, there are no new buyers and there is this "incredible situation" where people are paying $200,000 for homes that are initially being offered for $400,000.
"It's unfathomable how much different Manhattan is from the rest of the country," Cramer said. "It's a tale of two cities. It's New York City and then it's the rest of the country."
At the time of publication, Cramer had no positions in stocks mentioned.
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