“Following the lead and prodding of Robert Shiller – the maverick Yale professor who predicted the 2000 stock bust and is now predicting a housing bust – the Chicago Mercantile Exchange opened this spring a new futures market for house prices in ten U.S. cities. While this market is very new and still relatively illiquid, it is now predicting that U.S. house prices will fall in 2007 at the national average level, for the first time in over fifty years. The index of this futures’ market for the entire US is projecting a 5% price fall in 2007. And the futures contracts for individual cities show expected declines in housing prices even larger than 5% for Miami, New York, Boston, San Francisco, Boston, San Diego, Miami, New York and Las Vegas. ”
Can someone tell more about the futures market for house prices? What is traded there? And how does it work? What kind of contract does one buy there?
I also supplied some brief commentary on it. This market is way to thin to be traded right now, virtually nobody is taking any positions in it. My email is [email protected], if you want to email me, I would be more than happy to go through this market in detail with you.
You may want to go back to one of the older topics (called “CME housing futures”, I think). There are a couple of dozens posts and some links there that should answer some of your questions.
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