After watching the coziness that analysts had with corporate America during 2000 dot-com scandals, I look at Wall Street recommendations with a sharply critical eye.

For example, this morning a J.P. Morgan analyst upgraded Toll Brothers (TOL), and the entire home- builder sector to positive from negative.

Many analysts know the executives of the companies they cover. I don't know if this is the case with the J.P. Morgan analyst, and Toll Brother's, but this is what I know about the recent actions of the company's CEO Robert Toll.

Robert Toll, and a few more inside the company have been aggressively selling their Toll Brother's stock.

Here are some recent transactions;

Robert I. Toll

Richard J. Braemer

Bruce E. Toll

All Toll Transactions- dating back to December 2008.

Personally, I believe real estate is in a 10 year bear market. After so many people have been burned, it may take 5-10 years (like the NASDAQ) for wounds to heal, and courage to return.

While real estate prices have declined, the reduction from peak prices doesn't necessarily make it a bargain. Given the unfriendly nature of the state and local taxing authorities, combined with the higher cost of insurance, many investors will realize that real estate is still not a bargain even at current prices. Like the NASDAQ, I believe real estate will remain in a bear market for 5-10 years.

The last bubble to severely punished investors was the "NASDAQ, dot-com Bubble". Nine years after the bubble burst, the Over-the Counter (NASDAQ) index is still 50% below it's 2000 peak.

Demographic trends will hurt real estate as well. In particular, luxury home-builders like Toll.

Here is my rational;

I think the mindset of homeowners will change- if they haven't already.

-The collapse in real estate, and the con-job of our nations lenders, have shattered the dreams, an illusions of many homeowners. Seeing that real estate (for them anyway) was not the path to new found riches, homeowners going forward will live in more modest quarters.

a) Baby boomers will be dumping big houses on the market to downsize. This adjusted way of living is many due to the number of tragic hits to their net-worth since 2000.

b) Americans will still buy houses, but going forward they will be smaller, and less expensive. They may buy smaller existing homes and remodel them, or buy new homes that are smaller and less expensive to own.

c) Younger families, may start out in apartments, and eventually move to cost effective housing as they have children, and the children reach pre-teen years.

d) Families with children going off to college will look to downsize, and cut costs now that their immediate families are no longer at home.

Given this information, I can see why the insiders at the luxury home-builder (Toll Brother's-TOL) are selling. While the rich will still buy luxury homes, the wannabee rich will seek another path. IMO.