By Jim Cramer, TheStreet

Where the heck is the shadow inventory? Where are the roughly 10 million bank-owned homes that everyone tells us are lurking?

Darn it all, it's hard to grasp this stuff when every single homebuilder says it hasn't seen any of this spooky inventory and that houses are moving well, cancelations are down and inventory is down to six months.

• Check out mortgages under 5%
  

KB Home's (KBH) call Tuesday was typical. It acknowledges, like all of the homebuilders, that there is a shadow inventory for certain. It recognizes that it is "out there." But it isn't in any of its zones and the company is all over the place.

Now, the tax credit matters. The low interest rates matter. But the housing bears insist on one thing and one thing only: When these two selling instigators go away, the market will collapse.

What happens, though, if rates stay low, the credit keeps getting extended and the inventory gets down to three or four months? Do people feel that pricing will keep going down? How about if there is no inventory to speak of in many areas, if not most areas, of the country? Will that matter?

I think that the shadow inventory is chimerical. I know there are tons of "bad" mortgages out there. But I also know that nobody is in a hurry to unload homes or kick people out of homes. The perception by the bears is that this game has to give out at a certain point. I keep saying, "NO, IT DOESN'T."

Find a new broker for 2010

As long as there is capital from the equity markets, as long as there is some forbearance from the regulators, as long as there are attempts to keep people in their homes, the shadow inventory stays in the shadows, and it doesn't ever come out because when employment turns -- and it will turn -- people will figure out how to get current or will be liquid enough to take the hit.

My view is not a Pollyanna view. It is simply being pragmatic. For months now the housing markets have been very strong. We keep hearing that it is artificial. I don't know. I heard the same thing about "Cash for Clunkers." But when that program ended, car sales roared. Seems odd, yet that's what happened.

KB Home made me feel like I felt after all of the other homebuilding calls. I don't want to buy the homebuilders. They will not be able to make money until they work through all of their bad land holdings and prices go up.

But again, I feel strongly that you have to believe that every homebuilder is lying or the shadow inventory is located in some tar pit somewhere in the country that no one knows about.

I don't buy it. I remain positive on the banks that own the so-called shadow inventory, like Wells Fargo (WFC) and Bank of America (BAC), and I will brave the president's wrath to see this one through.

At the time of publication, Cramer was long Bank of America.

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO.

Related Articles

Buffett knows when to break his rules

The government can't create jobs

Google won't ditch China plans: Firing Line