REITs - Real Estate Investment Trusts - Info & Discussion: Re: Re: For Experienced Investors Only!
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» Normxxx - Re: Re: For Experienced Investors Only!
In response to Re: For Experienced Investors Only! posted by bob90245:And as over-extended homeowners can no longer afford rising interest payments on their ARMs, they may be forced to sell their home and become renters again. Combine those two trends, and you have an increasing number of renters which will be beneficial for apartment REITs.
That very well may be true in the long run (but remember what Keynes said about that), but in the short run, dropping property values and rising interest rates will compress multiples. Figure out what will happen to one of those REITs if they go from around 20X now to a more 'reasonable' 10X, as they did in 1999.
-- posted by Normxxx
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