10% of all US homes are in foreclosure!  That is simply staggering!

US foreclosure filings will hit 3.9M in 2009, bringing the 3-year total to 10% of all US homes.

Foreclosure heat map

via Foreclosure Thursday – The Stealth Stimulus | Phil’s Stock World.

This deal flies in the face of my continued rant that commercial real estate is in trouble… or does it?  Simon could be one of the solid players in commercial real estate.  Having the ability to issue shares for a part of this transaction is a big deal.  They only need cover costs until the economy rebounds.  If they paid pricing based upon current metrics, they can make this work.

Ahh… to be a buyer when everyone else NEEDS to sell.  Speaking of that, did you see that the “W” Hotel went for $2 million plus assumption of liabilities?  Dubai’s trouble is another’s gain.

Simon Property Group Inc. said Tuesday it will buy the outlet shopping centers owned by Prime Outlets Acquisition Co., solidifying its position as the nation’s largest public real estate company.

via Simon Property to buy Prime Outlets for $700M : 24 Hour Business : The Buffalo News.

We might be turning the corner in our recovery (at least that is what the talking heads are saying).  I am not convinced.  I have been wrong quite a bit lately.  I moved to about 35% cash last week and missed this last bump.  I placed a bet against AIG holding above $34 (I think it is headed back to the teens soon) and am losing that one.

We are not out of the woods here, but the tail might just wag the dog as it did on the way down.  This economy is not great.

I am not positive what the next catalyst will be to move us up or down, but it appears it is going to take a lot.  Wall Street players (GS) are moving money by the billions and practically printing profits.  According to Meredith Whitney, the banks and real estate are far from out of the woods.  She predicts many more bank failures along with a potential 20% decline in housing prices.

Any strong indication of that being the case could cause a short term panic.

I am going to be patient with my position here.  I might make a longer range play with AIG.  I can’t stomach the fact that this company is worth less than $0, yet trades above $35 per share.  Bad.  The parts do not equal the whole!!

More about the commercial real estate troubles by following the link below.

Hotels, Retail Properties Make Up More Than 63% of Largest Problem Loans – CoStar Group.

How should you play the real estate market.  I was wrong on the consumer side (wrong about the market view at least).  I dumped my shares in Beazer (BZH), it dipped significantly after that and then went on a tear which continues.

The noise in the commercial real estate market has been loud.  and can be summed up in the paragraph below.  The amount of chatter that I am hearing about this market is similar (not quite as loud) to the residential mortgage market prior to the break down.

The rising tide of the market is bringing up all ships. The funny thing about that is that the rising stock prices should help those companies that might otherwise have a difficult time raising capital.

…the Commercial Real Estate market faces a double-whammy of falling prices and reduced availability of debt, but the use of numbers in this short one sentence elegantly and succinctly captures the essence of the problem. A simple example will help explain.

via Commercial Real Estate – Make Up Your Own Mind — Seeking Alpha.

Bob and Scott do a short podcast discussing Westfield NY and the potential that the cottage community (Barcelona, NY) on Lake Erie to be a bargain today.  Looking for a vacation cottage?  Take a look at Westfield/Barcelona New York.