?REITs, or real estate investment trusts, and their related ETFs have long been eyed as the shoe to drop. So far, though, that shoe is still up in the air. Is it still primed for a fall?
As early as 2008, stories were warning that the commercial real estate market would fall through the floor and that hundreds of billions of dollars of commercial mortgages would default, says Michael Kahn for Barron Recently, just the opposite has occurred. Commercial real estate investment trusts (REITs) have been soaring over the past few weeks, and the technical indicators have looked prime.
Kahn says that commercial REITs not only rose, but also outperformed the market during the current summer rally. The sector halted its decline around November 2008, although it did hit a lower low in March, but not by much.
Commercial property tied to consumer spending patterns such as hotels and shopping malls do remain weak, says Ron DeLegge for ETF Guide, and the rental market has a way to go before stabilizing. If a REIT ETF or investment is appealing, mind the trendlines and be sure to enter and exit with a strategy.
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