Last summer, Cramer of CNBC fame, told his viewers (In spite of all of his terrible predictions, I do still think he still has two viewers left: his mother and his dog, but I'm not so sure about his dog) that housing had "officially bottomed."

I wonder if he believes that his simple proclamation makes it "official?"

My unofficial proclamation is that the housing market, while it has slowed considerably in its rate of deterioration, continues to worsen, not improve.

That quasi opinion-forecast is based upon many, many sources in the housing industry as well as detailed examination of supply and demand.

Traditional economists refer to "pent up demand" as being one of the driving forces to a housing recovery. In times past, the Fed has had to raise interest rates in order to "cool the economy" and to "prevent inflation" from becoming a big problem. Their primary tool to do so has been to raise interest rates. 

Of course, when interest rates have been raised, many people who otherwise could have qualified for a home mortgage loan no longer could do under the higher rates.

These people had the desire to purchase a new home, but did not have the ability to do so with higher interest rates.

The longer that interest rates were held at high levels, the more "pent up demand" increased.

Later, after the economy slowed somewhat and inflation fears had subsided, the Fed would again lower rates. That allowed the group of people who wanted to purchase a new home but couldn't afford to do so when interest rates were prohibitive to once again enter the real estate market and purchase a home.

It should be noted that there is always "pent up demand." Every year there are millions of high school boys who desire a brand new exotic sports car. That's a giant pool of demand, but it doesn't translate into mammoth sales of exotic sports cars.

Demand is a given. It is the ability to afford that is key.

This real estate downturn was not caused by the Fed raising interest rates to "cool" off the economy. It was caused because the Fed created a real estate bubble, in spite of their denials to the contrary. We are on the downward side of a real estate bubble.

While pent up demand may indeed be increasing, again, the key is the ability to afford. Interest rates are at historical lows, yet many would-be buyers simply can't afford to make a purchase, even with the historically low rates.

During the real estate bubble lending standards became way too lenient. The opposite is now occurring: lending standards are tightening dramatically compared to the leniency of the housing boom.

This is having the predictable effect of very low levels of sales for homes, both new and used.

The low sales level is not caused by a lack of desire/demand, but by a lack of ability to afford. And that lack of ability to afford is occurring with interest rates at historic, multi-decade lows.

Combine that fact with a massive supply increase due to record numbers of foreclosures. Distressed properties are putting downward pressure on real estate prices in addition to the downward pressure exerted by the dwindling number of buyers who can afford to buy under the stricter lending rules.

The Fannie Mae delinquency rate continues to skyrocket. As a result, the foreclosure inventory is projected to increase for the next two years as those delinquencies make their way through the foreclosure process and eventually end up as additional distressed inventory.

A rational look at the housing market provides a clear picture for further price declines. If you are thinking of buying a home now solely because prices seem attractive, wait another 12 to 18 months and they are likely to be much more attractive than they are today.