Shame on NBC’s “Today” Show

I watch NBC’s “Today” Show for 15 minutes each morning while I stretch for my morning workout. When my schedule allows, I often watch CNBC’s “Mad Money” with Jim Cramer during my early evening walk on my treadmill. So it was especially disappointing to hear Jim Cramer’s inappropriate comments on home buying on “Today” not once, but twice this week.

Jim’s comments, “Don’t you dare buy a home now! You’ll lose money!” followed yesterday by “Anyone who buys a home now is crazy!” did a great disservice to millions of U.S. home sellers and home buyers. Unlike most of us, Jim made millions in the stock market as a hedge fund manager. For most of us, our home is our largest financial asset.

If you’ve watched Jim’s show and read his books as I have, it isn’t hard to understand why Jim made these comments.

First, Jim made a fortune in the stock market with a short term investing strategy. Jim makes it very clear that he doesn’t believe in “buy and hold”. He typically doesn’t stay full vested in a stock for more than 18 months. Real estate investing is long term. I certainly wouldn’t advise home buyers to purchase a home, if they plan to sell it within 18 months.

Second, Jim is an unapologetic self-promoter. He’s a master at getting attention. That’s part of why I watch his show. He will do anything for a laugh. Recently Jim got a lot of attention by ranting in reference to the Federal Reserve, “They know nothing! They know nothing!” Jim will even play up negative coverage (read Barron’s August 20th cover story, “Shorting Cramer“) to his advantage. I’m sure the notoriety of his comments this week will help his show’s ratings, the sale of his books and newsletter subscriptions.

However, there are numerous differences between investing in stocks and buying a home. Here are three.

First, if you think stock prices are going down, you can stay on the sidelines and hold on to your cash. If you think housing prices are going down, you can’t just keep your money in cash. You have to pay rent. Each year you rent, you lose thousands of dollars in addition to missing out on a tax deduction and building equity.

Second, Jim says, “Never fall in love with stocks. They’re just pieces of paper.” Buying a home isn’t just a financial investment for people, it’s an emotional investment. People want a place to call their own, to make their own.

Third, there is no one U.S. housing market. The U.S. housing market is made up of thousands of local markets. As a Realtor^® who serves a large part of the Chicago metro area, I see the market differences between the city and the suburbs, between suburbs and neighborhoods, and even between housing types. According to Jim, “There’s always a bull market somewhere.” This applies to real estate as well.

While I am very disappointed with Jim Cramer for putting self-promotion over the public interest, I am more disappointed with “Today” for airing real estate “advice” that didn’t come from a real estate expert. Knowing a lot about home builder stocks doesn’t make Jim an authority on real estate any more than knowing a lot about health care stocks qualifies him to give medical advice. I encourage everyone to email “Today” at today@nbc.com demanding higher journalistic standards.