A new way to hedge against falling housing values
A new way to hedge against falling housing values
"the Chicago Mercantile Exchange quietly began trading futures contracts on home resale values last May. The contracts are based on the Standard & Poor's Case-Shiller Metro Area House Price indexes, which track price changes of existing homes in 10 major metro markets."
posted by James Haft at 9:01 AM
2 Comments:
This exchange is not good for housing. The market has an uncanny way of becoming a self fullfilling prophecy. When this index is bearish for housing then it creates a snowball effect. Sam problem experienced with index arbitrage in the '87 crash.
I disagree. As real estate becomes a growing percenage of household wealth, individuals need a way to protect their investment. Speculators are a small facet of the housing market.
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