More on REITs

An excerpt from a Wall Street Journal Online article addressing the positives of REIT investing in our current housing environment:


"TWST: Is this downturn in the single - family home market really going to benefit this space [Real Estate Investment Trusts]?

Mr. Goldfarb: Assuming that we continue to have jobs and GDP growth, we think it will. For example, let's take San Francisco. There people used to buy a place in Modesto and commute for two hours. That is no longer happening, one, because the ability to get the financing to buy the homes isn't there because standards are much stricter and also people are much more hesitant to make that jump to buy that home in this current environment. It favors the REITs because they tend to be located closer to the business districts and tend to be in more infill markets as opposed to out in the open expanses of where the homeowners were. So assuming that GDP continues to grow and we continue to get jobs, which is what UBS anticipates, then we think that it will be a net positive for the apartments.

http://biz.yahoo.com/twst/070919/zew804.html?.v=1