Real Estate Crunch: It's all over

Real Estate Crunch: It’s all over

Today's Financial News - Posted February 12, 2008

"The latest plan from the nation's leaders will do little to spur mortgage lender profits, but it will help to get the nation's housing market back on track. Most importantly, it will help get the industry off of TV and out of headlines. " – Andrew Snyder

By Andrew Snyder

Baltimore (TFN) — You can tell it is an election year. Everywhere you turn, the government is tossing economic life preservers. Not only is nearly every American citizen getting a sizeable check in May, now the Feds are looking once again to help folks that got themselves into mortgages they couldn't afford.

Later today, the Treasury Department and the Department of Housing and Urban Development will unveil what they have dubbed Project Lifeline. It is a deal with six of the nation's leading mortgage lenders that helps any homeowner at risk of default. This latest project goes a step above President Bush's plan, Hope Now, introduced late last year.

The bailout from the nation's leaders will do little to spur mortgage lender profits, but it will help to get the nation's housing market back on track. Most importantly, it will help get the industry off of TV and out of headlines. Remember, this so-called housing "crash" is partially due to media hype.

The end is near

With interest rates falling and the equities market beginning to level out, the folks that specialize in Real Estate Investment Trusts (REITs) are starting to get excited again. For them, the end of the negativity is near. The worst is over and they are poised to make forward progress.

On player in the REIT industry worthy of your investment dollars is the iShares Cohen and Steers Realty Majors (ICF:NYSE) fund. The ETF tracks the index with the same name. It is designed to measure and gauge the performance of the nation's major REITs.

Needless to say, the index has been slammed over the past few months. As it dropped from a value of over $114 to its 52-week low of $61, thousands of investors bailed out. Now that the markets are leveling off, they are starting to sniff their way back into the fund. It is a good idea.

During the past two real-estate recessions, the index dropped by 23.79% and 23.9% respectively. In 2008, it dropped by 24.03%, proving that if the past is any indicator, the index is done with its downward slide. Even better, REITS are traditionally the first to make positive moves as the real estate industry moves ahead. This play will be the first to profit.

Now is the time to be investing in this index. It is the perfect opportunity to buy low and sell high. After we hear of today's latest bailout program, the nation will begin to realize, the worst is behind us. Do not miss your opportunity to get in first.