Residential home prices are in downward spiral, Fanny Mae and Freddie are already at there max 15% cash reserve from 30%? until Residential properties start to rise the secondary market will only loan 60% of value, there not going to fall for the AAA paper rating BS anymore. BKs, Forclosures, all we need now are major job losses to add to the mix and there are going to be major problems with oil headed higher as well, we are going to be recipients of a Major Sh-t Storm. There is no way out of this, nothing in the short term is going to pull the economy up. As soon as SRS hits 150 I will transfer all my money to UYG at around 20 or below, for another run when these Financials recover slowly. UYG could hit 50+ in a matter of a year or so.
I disagree with you because SRS has little to do with residential RE. Why do you think that SRS is affected by the residential RE market?
BTW, anyone shorting residential RE is likely too late to the party. I'm not saying the that residential is about to rebound. Not for a long time. It's just that everyone already knows about the weakness in the residential market, so a lot of fear is already priced into the market.
I just dont think the economy will begin to recover without Recovery in Residential RE. If it continues to tank, whats going to make the economy grow? 70% of economy is Consumer spending? Well the biggest investment consumbers have(there Personal ATM is there home) without that growth will slow. conforming loans are available, but if you refi, I was told that you can only pull out 100,000 cash, and if you want to go to the secondary or privite loan market they will only refi 60% ltv. without money being pumped into the economy how will these Malls and Apartments and Office Buildings flourish? or continue to grow? There will be some foreign idiots that buy this over priced Sh-t, because it seems cheap to them, but thats not going to save it. Jobs are barely keeping this economy alive, stimilous checks will help a bit, but its over Most REITS are going to lose value, I see nothing but Commercial Properties that need tenants here in Souther California. Some upper end REITS will be ok, but there overal Values will still fall with the property value loss, I am no genious, but the Fed seemed to postpone this collapse that I think will happen within a few months.
I'm surprised that residential house prices and sales are such a poor indicator of commercial real estate stock prices. I suppose I need to look more carefully at the companies that define the IYR. (It's a sign of my shoddy investing that I bought SRS already, without knowing more; I presumed builders and others who work in both markets were included.)