As the bloodletting on Wall Street continues, some of the only investors not queasy at the sight of their portfolio's performance may be those who have sunk their dollars into real estate.

Performance for real estate investment trusts (REITs) continues to hold steady for the quarter, even as the major indices take nosedives. The composite index compiled by the National Association of Real Estate Investment Trusts (NAREIT) is down only two-tenths of a percent since the new year.

NAREIT's Public Equity 100 index is down just over 1.6 percent, while its equity REIT index is down just shy of 1 percent.

On the flip side, the NAREIT mortgage REIT index has risen sharply -- more than 21 percent -- since the beginning of the year, while its hybrid REIT components are up more than 25 percent.

Contrast that to broader market performance. Since January 1, the Dow Jones Industrial Average has fallen nearly 8 percent. The Nasdaq has plunged more than 17 percent. And the Russell 2000 -- which most closely mirrors the performance of REIT stocks -- has dropped 4.5 percent.

Commercial real estate performance is expected to hold steady through this troubled time, while residential-oriented shares continue to grow slightly. Dropping home mortgage rates have spurred lagging sales over the last couple of months, while home prices in many areas continue their steady rise.

According to a Standard & Poor's (S&P) report released this week, the U.S. conventional housing market should remain relatively healthy in the coming year.

With current backlogs continuing to look very healthy, most large homebuilders appear poised to deliver another solid year of financial performance, the S&P report noted. Beyond 2001, the picture gets cloudier, although not yet alarmingly so. In fact, future conventional housing may well prove less volatile than in cycles past.

Things look a little uglier in the manufactured housing segment. S&P reports a rapid and sharp contraction in demand for new units.

Over the next few years, manufactured housing may well give back its recent market share gains, said Lisa Sarajian, managing director of Real Estate Companies at S& P. But the industry should eventually emerge as a healthier and more viable component of the overall housing industry.

The real pain for real estate is being felt in technology-oriented firms, which are following the trends affecting the Nasdaq rather than those in the NAREIT indices.

A case in point, Homes.com last week sacked approximately 40 percent of its work force. The company, which develops marketing and productivity tools for real estate and home services professionals, canned 150 employees in sales, product development and administration to preserve much-needed cash. The company will continue to offer its existing product line.

In the meantime, traditional real estate firms continue to announce new investors and ventures, evidence that interest remains in traditional businesses with both income and potential.