I have a SLIGHTLY irrational fear of drowning. I like to swim, kayak, jet ski, and fish. Yet the idea of suffocating under water terrifies me. I know a lot of people who also have irrational fears—of driving on highways, of spiders crawling out of pipes, of sleeping near windows without blinds. (No, really, I know people with all of these fears. I run with a strange crowd.)

A certain degree of fear has also been present for the past year in the real estate sector as developers and asset managers shied away from new groundbreakings and nervously evaluated potential distress acquisitions—opting not to strike in many cases simply to avoid catching the falling knife. Yes, the credit markets were tight and lending was at a standstill. But there was also a strong sense of timidity prevalent all year.

Take Trammell Crow Residential, which was the No. 1 builder of multifamily units in the country for three years running (from 2006 to 2008). Yet in 2009, the Dallas-based developer did not break ground on a single unit. And they were not alone. Several public REITs—from Houston-based Camden Property Trust to Chicago-based Equity Residential—also ceased new construction in the past year.

In January, at the National Multi Housing Council’s annual meeting, the sentiments were decidedly more optimistic. Owner/operators were vocal about their desire to deploy large equity funds. Meanwhile, developers armed with idle land and FHA financing were seeking to break ground in order to get ahead of demographic data and prepare for a rental resurgence in 2012 and 2013. [Check out our feature this month looking at development in 2010, “Groundbreaking Ideas,” which starts on page 36.] And forecasts suggest that $2 billion in assets will trade hands thanks to the public apartment REITs—Essex Property Trust already bought the first REO asset of the year, while Equity Residential acquired three New York towers.

The fear seems to be subsiding. Well, all except one particularly frightening question: What if the fears of the past year-and-a-half weren’t irrational in the first place? In fact, what if the current “cautious optimism” that seems to be pervading the real estate industry is simply wishful thinking disguising itself as strategy?

After all, the economy is still unwell. Unemployment remains a problem in every major metro in the country. Job growth predictions for this year are negligible. The FHA recently announced new rules that would tighten its underwriting requirements. The Treasury has lifted the cap on Fannie Mae’s and Freddie Mac’s holdings, opening the agencies to increased scrutiny and apprehension about the security of their futures. And ultimately, there seems to be an appalling lack of organizational and operational strategy as to where, when, and how apartment firms deploy their resources.

The only real comfort (if it can be called that) in all of this is that everyone seems to be in the same boat. Collectively, as an industry, we all seem more than eager to swig the Kool-Aid, then cross our fingers, toes, and eyes and hope for a speedy recovery from the Great Recession—whether or not the underlying economic fundamentals exist to support those hopes.

It’s a nerve-racking thought. Kind of like scuba diving.