REITs: Duke Realty, Equity Residential

"I bet in six months, 15 to 20 cities will have falling prices," said IHS Global Insight economist Patrick Newport, who expects home prices to fall between 6% and 8% before rebounding in 2011.

The rate of vacant homes up for sale was 2.5% last quarter, the Commerce Department reported recently, flat year-over-year but historically very high.

With home ownership no longer carrying the prestige -- or even the assurance of an investment that will gain, rather than lose, value -- more and more people look to rent their homes rather than own. That could prove to be a windfall for a REIT like Equity Residential which focuses on apartment rentals.

CEO David J. Neithercut said strong occupancy, little new supply of residential apartments and favorable demographics should drive top-line growth "for years to come," but that "the rate of that growth is highly dependent on employment growth."

The Chicago-based REIT posted quarterly earnings of $6.3 million, or 2 cents per share, on revenue of $510.9 million. Sales beat expectations, but profits came in far short of the expected $34 million, or 12 cents per share.

Indianapolis-based Duke Realty widened its quarterly losses to $42.4 million, or 19 cents loss per share, from a year-earlier loss of $32.4 million, or 16 cents loss per share. Analysts expected a loss of just $18.1 million, or 4 cents per share. Top-line fundamentals came in better than expected at $383.9 million, from $348.3 million in the second quarter last year.

-- Reported by Miriam Marcus Reimer from New York.

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