Coldwell CEO: There’s No Housing Bubble
Coldwell Banker CEO Jim Gillespie says there was no bubble and the ‘correction’ should run its course without a big decline in prices.

“A bubble is defined by a stretch in valuation of remarkable proportions,” he explained. People have to understand that there’s not going to be a bubble with stocks that are selling at eight, nine or 10 times earnings, because these companies are the ones that can buy back a lot of stock and can increase the dividend.

To argue against his thesis, Cramer said someone could point out that Toll Brothers (TOL - Cramer’s Take - Stockpickr - Rating), Lennar (LEN - Cramer’s Take - Stockpickr - Rating) and KB Home (KBH - Cramer’s Take - Stockpickr - Rating) are all selling at eight times earnings. However, those companies cannot buy back stock, he said, because they are running out of money, and they can’t raise their dividends because they would be violating covenants.