NEW YORK ( TheStreet --

Debra Borchardt:

Realogy ( RLGY) 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.

Jim Cramer:

Right.

Debra Borchardt:

Now, they're starting to get worried that now prices are recovering they've got to jump in and get them.

Jim Cramer:

Well, affordability is going to go away. The houses are the cheapest, the money's the cheapest. The down payments have to be big.

Debra Borchardt:

Because we have to get away from the financial crisis and problems.

Jim Cramer:

Right. Smith was saying the FICO scores are 750 now for some of these homes and for people who are buying. The Fannie Mae ( FNMA) market has to happen, the banks don't want to hold on to these loans and a lot of banks are looking for 40-50% if it's investment property. The rental price is now well in excess of when you buy a home and your mortgage payment, it's still very right. They're going to build a million homes, Richard thinks it could be double that, if they had the ability to. There's a lot of restrictions because of Dodd-Frank.

Debra Borchardt:

All right. So, there's a lot of positive, fundamental things to say about Realogy. The volume though on the stock is five times its average volume. It is up again, it's not at its 52 week high.

Jim Cramer:

Well, they did do a 35 million share secondary, the stock was at 45 and then people said, "Listen, they preannounced the downside and they did stock." When you look over the quarter, it wasn't really to the downside. It was a fine quarter. The main thing is, is that Apollo ( APO) wanted to get its money out and they made it so you made money when they got out. They're making fortunes obviously. It's just a good story if you believe like I do that housing's going to continue to go higher.

Debra Borchardt:

All right. Well, there you have it. If you are looking for a housing stock you might want to take a look at Realogy. It is still not near its 52 week high and there may still be some room in this real estate stock.

--Written by Debra Borchardt in New York.

>To contact the writer of this article, click here: Debra Borchardt.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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