Reits

[Paws]

I have noticed Reit stocks dropped quite a bit. The three I own GGP went from 67 to 41, KIM went from 53 to 35 and WRE went from 43 to 30. Are these stocks entering a buy zone? Why or why not?

[Want2retire]

I don't know. Wish I had a working crystal ball!

I do plan to buy a small amount of REIT funds sometime in the next couple of years. I am not convinced that they aren't going to drop some more before they hit bottom. I will probably wait a while.

[twaddle]

REITs are all about yield. The yield is still low by recent historical standards. And commerical real estate is just about ready to tank (typically follows residential by 4-6 quarters).

I think now would be a good time to wait.

[clifp]

I bought REITs in 2000 and 2001 sold them in 2003/4. I bought O last year (with the intention of keeping it forever this will change), and couple this last month as prices started to drop. I think most have been overvalued the last few years and are starting to come back to a fair value. I really do think for REIT price should be based a lot on current yield vs T bill risk free yield or possibly cash flow "yield". In general with the turmoil in real estate I would want a fairly large premium. That said I think investors who do their homework can find good ones.

FWIW Moningstar has the fair value of GGP at 41 3 star, KIM at 31, 2 star, and sounded mildly positive about both.