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Strategies & Market Trends : Z Best Place to Talk Stocks

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To: pz who wrote (52944)6/2/2005 10:34:33 AM
From: Ron McKinnon  Read Replies (1) of 53068
 
Barry Ritholtz
How to Short a House
6/2/05 10:26 AM ET
One of the comments that came up repeatedly on the Housing is Not a Bubble column was the assertion that "You cannot short a house." As in the stock market, the lack of "informed short selling pressure" removed a source of supply that theoretically would dampen price rises.

Only now, it turns out to be no longer true.

Michael Covel, author of Trend Following, points us to Hedge Street, where you can select distinct cities to short median home prices on a regional basis:

Chicago
Los Angeles
Miami
New York
San Diego
San Francisco

These new Housing Price Hedgelets are benchmarked against the National Association of Realtors reported median sales price of existing single-family homes in the cities mentioned above. There's also a hedge which can be put on on 1-yr ARM or 30-yr FRM Mortgage.

So now you can sell a region of Homes short . . . just not individual houses.
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