However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector of the economy in search of companies with rising CAPS ratings.          

There are 177 stocks listed under real estate in the CAPS' screener, but more than a handful of them carry well-respected four- and five-star ratings. Those accolades mean our 170,000 CAPS members are confident that these stocks will beat the market in the months ahead, but let's see what members are saying about the ones below:

Company

CAPS Rating Today (out of 5)

Recent Price

52-Week Price Change

Est. 5-Year Growth Rate

Chimera Investment (NYSE: CIM)

****

$4.05

10%

8%

Hatteras Financial (NYSE: HTS)

****

$29.95

5%

NA

RAIT Financial Trust (NYSE: RAS)

*****

$1.87

13%

14%

Source: Motley Fool CAPS; Yahoo! Finance. NA = not available.

The markets may be feeling better about the economy after a few reports have offset much of the drumbeat of negativism we've seen, and with the S&P 500 up 15% over last year, CAPS real estate stocks have done surprisingly better. The average stock is up 26% from the year ago period. Of course, helping those returns were performances like those by Allied Irish Bank (NYSE: AIB), which is down more than 81% year over year, and Lloyds Banking Group (NYSE: LYG), which is down almost 22% in the same period.

So let's take a closer look at why investors think that some of these other companies won't be jumping from the frying pan into the fire now that the markets are roiled again.

Some spring in its step
Chasing the high yields offered by real estate investment trusts like Anworth Mortgage Asset (NYSE: ANH)Annaly Capital (NYSE: NLY), and Hatteras Financial -- all of which invest primarily in agency-backed securities underwritten by Fannie Mae, Freddie Mac, and Ginnie Mae -- has so far proven to be a lucrative endeavor for investors. The risk is significantly minimized when the taxpayer has your back, even when those agencies need more backstopping (or perhaps because of it). The party will end one day, just not anytime soon.

Chimera Investment, on the other hand, also invests in non-agency-backed securities, which accounts for nearly three quarters of its investments. That means there's a lot more risk associated with the stock, and while the potential for a double-dip recession is looking more remote, housing industry researchers at RealtyTrac say 65% of the 206 metropolitan areas surveyed recorded year-on-year increases in foreclosure activity for the third quarter.

CAPS member iversonj88 says that trends are finally pointing in real estate's favor and Chimera should benefit as a result.

Everyone loves this stock. It's brave, but smart, and has excellent support as a spin-off of longtime, successful player Annaly. The dividend is monstrous on this, and as long as the rates hold where they are, all statistics are pointing toward increasing stability and profits in this sector. REITs are the best thing out there right now, and this one offers exceptional rewards and their business represents perfect timing in a down market.

Driving a bargain
Instead of residential real estate, RAIT Financial focuses on the corporate real estate side and the hit its stock took recently was as a result of a worse-than-expected earnings report. The CRE market has had a more uneven recovery than residential, and even industry executives aren't hopeful that a turnaround is on the horizon just yet, according to The Real Estate Roundtable. Uncertainty is the watchword for the future.

Despite RAIT's own uneven performance, the CAPS community remains solidly behind the REIT, with 93% of the 520 members rating it believing market-beating results are still in the cards.

While a lot of the real estate market has acted like a house of cards, if you're of the mind that we've finally hit bottom, then now could be the time to double down on a recovery. But only you can determine if RAIT is right for your portfolio, so add it to your My Watchlist page and have all the Foolish news and analysis about it aggregated for you in one place. Then let us know on the RAIT Financial CAPS page (or in the comments section below) whether the CRE market can rebuild itself.

The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other investor analysts on whether you think these stocks are ready to bound higher.

The Fool owns shares of Annaly Capital Management. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Rich Duprey currently does not own any stocks as you can see here. The Motley Fool has a disclosure policy.