I just saw this Jim Cramer video now from a few days ago on CNBC.  Cramer, clearly in the bold prediction game (sometimes overly so but you have to have to give credit to a guy who's willing to put his opinions on the line no holds barred every time - plus he's wildly entertaining), has declared that the "bottom" of the national real estate market will occur in the 3rd quarter of 2009 - in his words, exactly 309 days away!

Why?  Cramer gives 10 reasons (plus my comments following each):

1. We’re building fewer homes, so inventories have the chance to come down.  (Agreed - we seen inventories coming down recently.)
2. The recent housing-rescue bill authorized the Federal Housing Authority to put $300 billion toward getting homeowners out of difficult floating rate loans to the low fixed-rate kind.  (Agreed - this bill should have at least a moderate effect on reducing foreclosures although we are certainly not through them yet.)
3. Prices have come down enough to lure out the bargain shoppers, about an average of 7% year-over-year. Today’s S&P housing numbers showed declines of over 25% in some areas. That trend could continue.  (Agreed - there is, at least anecdotally from talking to a lot of brokers and their clients recently, a large portion of buyers who are fence-sitters right now are really getting ready to pounce as more and more economists are predicting the bottom is near.  Plus a lot of the hardest hit areas, like the areas with a lot of foreclosures, are seeing a lot of activity already as "bottom feeders" - in a nice way! - are picking up bargains.)
   
4. At last the holdout markets have rolled over – think New York. When that happens, a recovery can happen.  (Not sure of any impact here - New York has been seeing some decline after holding very strong for a large portion of the decline, although I don't really see why a few strong local markets need to decline for a recovery to happen - local markets vary wildly in good and bad markets) 
5. If – and Cramer thinks this is a when – Fannie Mae [FNM  6.50    -0.34  (-4.97%)   ] and Freddie Mac [FRE  4.80    0.29  (+6.43%)   ] are taken over by the government, mortgage rates will come down. They’ve been going up month to month recently. (Agreed - Fannie and Freddie are in trouble and the government has not choice but to rescue them if they fail, but we have also seen most recent mortgage rates slightly declining anyway.  Either way, there is still too much "risk" factored into the rates from most banks, unnecessarily in my mind, with stricter underwriting standards in place now.  This "risk premium" should come out of the rates eventually.)
6. The bulk of those teaser-rate loans – those that offer low rates for the first two years and then reset to much higher rates – will reset in the third quarter of this year because they peaked in the third quarter of 2006. That means there will be fewer foreclosures as a result because there will be few loans changing to those higher rates.  (Agreed - we are nearing the end of the run for "reset" caused foreclosures which will reduce the flood of foreclosures.)
7. There’s a tremendous amount of household formation, 800,000 every year, Cramer said. Four million babies born each year, divorces, 2.5 million new citizen – they all create demand.  (Partially agree - this is the reason why real estate is a good long term bet.  Growing population and new jobs creates long term growth.  Although this is no net difference from 2006 & 2007 so I don't see the "change" in impact from this that will lead out of the downturn.)
   
8. Immigration had been bringing in 1 million people a year, but that’s been cut back a bit. But both McCain and Obama are pro-naturalization, so that number could return to previous levels after November.  (Partially agree - same reasons as above, but maybe there is a marginal impact from a potential increase in immigrations, although not many of the immigrants are "immediate buyers".)
   
9. The horror shows that are the California, Florida and Arizona real estate markets are no longer bleeding into other areas. These heavy losses are being cordoned off, Cramer said, and different markets are evening out.  (I don't see any impact here - same as the NY market situation above, I don't see the impact local markets have upon one another, so it should not matter.)
10. Lastly, even these horrible areas – Bradenton in Florida and the Central Valley in California – are bottoming. The first to fall is usually the first to return, Cramer said. He’s predicting that Miami and the Inland Empire are next. (Agreed - similar to the Boston, we are seeing signs that the first to fall are near bottom already.  Although Boston didn't really fall much in the grand scheme, it was one of the first areas, and we are seeing more and more signs of a quickly approaching bottom.)

Once that happens it will be the third quarter of 2009, and Cramer thinks he thesis will be apparent to everyone by then. So here’s the countdown: 309 days until June 30, 2009 – the deadline for a much-needed housing bottom.

Overall - I agree with Cramer's prognostication on its face BUT the information is relatively useless for individual markets in separate areas.  Real estate is a very local "game" and the fundamentals of different markets vary greatly.  Sometimes, it looks like different markets play with entirely different rules.  So, to me, the national picture is nice to have a glimpse at, but much more important to you, as a buyer or seller, is what is going on at the local level, town to town and street to street.

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