Many are waiting for Amazon to announce the location of HQ2, their new second headquarters. The thinking is that the “winning” city will see home prices soar in anticipation of the need to house thousands of new employees. While there’s been lots of buzz about what Amazon might do, there’s … Read More
Every quarterly expiration of a CME Case Shiller home price index contract is an opportunity to remind readers about the cash settlement features of these contracts, and how quotes on the expiring contracts might be used to get a sense of “market-implied” HPAs.
For example, the table below shows (in … Read More
I included a page in the month-end recap with suggested two-sided levels for one-year puts on each of the 11 regional contracts.
The table details on the reference K19 (May 2019) contracts, a strike I selected, and then both suggested levels (in blue) as well as quotes that have been … Read More
Eurnonext is preparing to launch a Paris home price index futures contract later this year. They’ve sent out “Save the Date” notice for a presentation on May 23rd (see below) to discuss the reference index, and other “perspectives and innovations”. My hope is that this launch will revitalize discussion of … Read More
With Seattle being one of the strongest home price markets in the country, some homeowners might be worried about a retreat in prices. Of course, they might prefer not to sell their homes, uproot their families, and move into a rental for both cost and logistical reasons, just to express … Read More
Quotes on the CME Case Shiller futures moved higher today after this morning’s release of the February Case Shiller indices. The line “Mid-Mid change” in the table below highlights the change in prices for the 11 contracts (the Case Shiller 10-city index, and one for each of the ten composite … Read More
With all the concerns about home prices, I thought that it would be useful to start a (monthly?) effort to foster discussion on the price of buying down-side price protection on each of the 11 regions traded on the CME.
The table below shows suggested bids and offers on puts … Read More
Here’s an update of quotes across the CME Case Shiller home price futures contracts from early April 16th. I’ve posted as there’s been quite a bit of bid/ask spread compression since March 29th both by regions and across the expirations. For example CHI bids are 6.4 points higher, while offers … Read More
I’ve compiled the following graph to pose the question, and prompt debate: should forward HPAs (i.e. annualized home price appreciation rates) converge across regions?
The graph stitches together year-on-year (YOY) price differences both between the CME Case Shiller home price index futures contracts and historical Case Shiller indices, as well … Read More