Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
OMB APPROVAL
OMB Number: 3235-0287
Expires: January 31, 2005
Estimated average burden hours per response... 0.5

(Print or Type Responses)
1. Name and Address of Reporting Person *
JASTROW KENNETH M II
   2. Issuer Name and Ticker or Trading Symbol
Forestar Real Estate Group Inc. [FOR] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
__X__ Director _____ 10% Owner
_____ Officer (give title below) _____ Other (specify below)
(Last)
(First)
(Middle)
1300 SOUTH MOPAC EXPRESSWAY 3-SOUTH		 3. Date of Earliest Transaction (Month/Day/Year)
07/01/2008
(Street)

AUSTIN, TX 78746		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 07/01/2008   M   14,557 (1) A (1) 144,791 (2) D  
Common Stock 07/01/2008   D   3,583 (1) D $ 18.11 141,208 D  
Common Stock 07/01/2008   M   17,500 (3) A (3) 158,708 D  
Common Stock 07/01/2008   D   17,500 (3) D $ 18.11 141,208 (4) D  
Common Stock               3,796 (5) I By Trustee 401(k) Plan

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 1474 (9-02)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Option (right to buy) (6) (7) $ 20.69             05/07/2000 05/07/2009 Common Stock 32,000   32,000 D  
Option (right to buy) (6) (8) $ 13.24             02/04/2001 02/04/2010 Common Stock 66,666   66,666 D  
Option (right to buy) (6) (9) $ 11.76             02/02/2002 02/02/2011 Common Stock 66,666   66,666 D  
Option (right to buy) (6) (10) $ 13.26             02/01/2003 02/01/2012 Common Stock 33,333   33,333 D  
Option (right to buy) (6) (11) $ 8.68             02/07/2004 02/07/2013 Common Stock 36,666   36,666 D  
Option (right to buy) (6) (12) $ 15.02             02/06/2005 02/06/2014 Common Stock 33,333   33,333 D  
Option (right to buy) (6) (13) $ 20.26             02/04/2006 02/04/2015 Common Stock 33,333   33,333 D  
Option (right to buy) (6) (14) $ 27.06             02/03/2007 02/03/2016 Common Stock 34,166   34,166 D  
Option (right to buy) (15) $ 28.85             02/12/2009 02/12/2018 Common Stock 20,000   20,000 D  
Restricted (6) (16) 07/01/2008   M     17,500 (3)   (16)   (16) Common Stock 41,666 (16) 24,166 D  
Restricted (6) (17)               (17)   (17) Common Stock 50,000   50,000 D  
Phantom Stock (6) (18) (18) 07/01/2008   M     14,557 (1)   (18)   (18) Common Stock 14,557 (18) 0 D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
JASTROW KENNETH M II
1300 SOUTH MOPAC EXPRESSWAY 3-SOUTH
AUSTIN, TX 78746		   X      

Signatures

 David M. Grimm signing on behalf of Kenneth M. Jastrow, II   07/02/2008
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) Settlement of 14,557 phantom shares, as more fully described in footnote 18 below, 10,974 of which shares were settled in shares of Forestar Common Stock and 3,583 of which shares were settled in cash.
(2) The total number of shares beneficially owned has been corrected to eliminate a 4,026 share overstatement error that occurred in the reporting person's Form 4 filed with the Securities and Exchange Commission on January 18, 2008, which overstatement error has been carried forward to Forms 4 filed after such date and prior to the date hereof.
(3) 17,500 Restricted Shares were settled for cash based on the fair market value on the settlement date.
(4) In accordance with the Rights Agreement adopted by the Company on December 11, 2007, Preferred Stock Purchase Rights are deemed to be attached to the shares of Common Stock.
(5) Reporting Person acquired shares through acquisitions under the Temple-Inland 401(k) plan. By trustee of the Temple-Inland 401(k) Plan according to the latest report of the Plan Administrator. (Note: Trustee uses unit accounting; therefore, share equivalents may fluctuate slightly from month to month.)
(6) Shares acquired in a pro rata distribution by Temple-Inland Inc. through a spin-off effective December 28, 2007.
(7) Options Vesting Schedule - Exercise price $20.69: Options Exercisable 05/07/2001 - 4,800; Options Exercisable 05/07/2002 - 4,800; Options Exercisable 05/07/2003 - 4,800; Options Exercisable 05/07/2004 - 4,800; and Options Exercisable 05/07/2005 - 12,800.
(8) Options Vesting Schedule - Exercise price $13.24: Options Exercisable 02/04/2002 - 10,000; Options Exercisable 02/04/2003 - 10,000; Options Exercisable 02/04/2004 - 10,000; Options Exercisable 02/04/2005 - 10,000; and Options Exercisable 02/04/2006 - 26,666.
(9) Options Vesting Schedule - Exercise price $11.76: Options Exercisable 02/04/2002 - 16,666; Options Exercisable 02/04/2003 - 16,666; Options Exercisable 02/04/2004 - 16,666; Options Exercisable 02/04/2005 - 16,666.
(10) Options Vesting Schedule - Exercise price $13.26: Options Exercisable 02/01/2003 - 8,333; Options Exercisable 02/01/2004 - 8,333; Options Exercisable 02/01/2005 - 8,333; and Options Exercisable 02/01/2006 - 8,333.
(11) Options Vesting Schedule - Exercise price $8.68: Options Exercisable 02/07/2004 - 9,166; Options Exercisable 02/07/2005 - 9,167; Options Exercisable 02/07/2006 - 9,166; and Options Exercisable 02/07/2007 - 9,167.
(12) Options Vesting Schedule - Exercise price $15.02: Options Exercisable 02/06/2005 - 8,333; Options Exercisable 02/06/2006 - 8,333; Options Exercisable 02/06/2007 - 8,333 and Options Exercisable 01/01/2008 -8,333.
(13) Options Vesting Schedule - Exercise price $20.26: Options Exercisable 02/04/2006 - 8,333; Options Exercisable 02/04/2007 - 8,333; and Options Exercisable 01/01/2008 -16,666.
(14) Options Vesting Schedule - Exercise price $27.06: Options Exercisable 02/03/2007 - 8,541; and Options Exercisable 01/01/2008 - 25,625.
(15) Options Vesting Schedule for Options Granted 02/12/2008 - Exercise price $28.85: Options Exercisable 02/12/2009 - 6,500; Options Exercisable 02/12/2010 - 6,500; Options Exercisable 02/12/2011 - 7,000.
(16) 17,500 Restricted Shares were settled for cash based on the fair market value on the settlement date. The remaining Restricted Shares (24,666) will vest effective February 3, 2009, subject to a 1% ROI performance criteria. Restricted Shares will be settled for cash based on the fair market value on the vesting date.
(17) Restricted Shares will vest effective February 2, 2010, subject to a 1% ROI performance criteria. Restricted Shares will be settled for cash based on the fair market value on the vesting date.
(18) Phantom shares accrued under a Temple-Inland Inc. plan that were settled as follows:10,974 phantom shares were settled in shares of Forestar Common Stock and 3,583 phantom shares were settled in cash based on the fair market value on the settlement date.

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.