January 04, 2005

Housing Hedge

For those seeking protection against the “housing bubble”:-

“Macro Securities Research, a company affiliated with Robert J. Shiller, the Yale economist, has reached an agreement with the Chicago Mercantile Exchange to list pairs of derivative instruments that are essentially index funds linked to home prices in certain markets. One instrument in each pair will rise as its market index rises; the other will rise as the same index falls. That will let investors bet on the direction of housing prices. Similar, but less sensitive, vehicles are being offered by HedgeStreet, a firm in San Mateo, Calif., that offers small-scale derivatives speculation online. “

In theory this sounds like a perfect way to protect homeowners hedge against the vicissitudes of the housing market. In reality, this is unlikely to be the case as very few homeowners would want to fully hedge, why? Well in a housing boom, it means that everyone else’s house has gone up in price while yours has stayed put. And given that boom times are when people are most likely to want to move in order to seize better job opportunities, they could find themselves priced out of the housing market in the new location.

Instead this product is likely to be of greater benefit to those who might expect to loose their job, and hence need to move to get another, when the housing bubble bursts. Like realtors.

Posted by wardx107 at January 4, 2005 06:01 PM
Comments

The housing BUST is well under way in San Diego California with many areas seeing a drop in value well into the double digits!

I've found the best source for the real facts about the San Diego housing bust to be a local real estate broker’s blog at:
http://www.brokerforyou.com/brokerforyou

Posted by: San Diego Cosmetic Surgery at July 12, 2007 02:02 PM

Good real estate info. Thanks for the read!

As far as the real estate bubble goes, it looks worse in San Diego.
I came across a San Diego real estate broker's blog post that is to be the only one I've seen that does not spout the 'industry line: "It's always a good time to buy real estate." This broker calls it like it is. No it's not PC, but it is amazingly informative and insightful.
Bob Schwartz, the San Diego real estate broker who publishes the blog, wrote a great article back in 2005 that predicted today's huge home deprecation. You can read this article at: San Diego real estate the url is:
http://www.brokerforyou.com/brokerforyou/?p=11
The blog is :
the url is:
http://www.brokerforyou.com/brokerforyou

Posted by: Los Angeles Attorney at July 27, 2007 02:27 PM

There are micro markets within the San Diego real estate (condos & homes) market. The county averages are not applicable in all micro markets. Even with in the downtown condo market, the low priced entry level product is taking a real beating in terms of price, yet the high end is holding its own and even setting new highs in terms of sales price, price per square foot and even in asking prices, two units asking price is over $12 million. Quality product with views still command top price.

Posted by: mark at September 21, 2007 01:49 AM
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