The Dow Jones REIT Index more than doubled in 6 months last year when it rocketed ahead from 85 to 181. After reaching an interim high in September, it has been struggling while most popular averages have been roaring ahead. The REIT index fell 5-10% off its high for 3 months. In the middle of December, REITs were hot, taking the index to 192 after which it pulled back pretty much hugging its former high level of 181. The inability to record new highs while other stocks were (especially high yielders) suggests that REIT investors are holding their breaths, waiting for the other shoe to drop.

REITs have 2 big advantages at this difficult time for financial companies. With their heavy mortgage loads, interest is generally their biggest expense. Low interest rates are bringing significant cost savings when they are needed. Secondly many of their mortgages and debt are held by banks at a time banks are under pressure to make loans and renew existing loans.