I've reformatted my Single Contract template to show: a) change in contract prices from last year (specifically Feb 21, 2020), and b) suggested levels on Options. I use Feb 21, as - at the time - the CME was in the process of transitioning from November being the lost expiration, to February. The thinking was (and remains) that the Feb contracts better line up with research and forecasts on price changes for a given year (as Feb contracts settle on Dec index values). By Feb 21 I had been able to post a series of quotes across the new Feb contracts, which was doubly timely as Covid fears began to roil the market soon after.
Recall that the CME closed trading in options in Jan 2020, so the option quotes that I've posted here can be structured into HPHF (Home Price Hedging Fund) agreements. As with all my HPHF option quotes, I've put boundary conditions on the pay-outs to put a cap on potential gains/losses, allowing users to post collateral to collateral the range of price moves, all while setting limits at "reasonable" levels for one-year moves. I'd like to focus inquiries on Feb 2022 (G22) exposures as I will take either side (at some price). For larger amounts, longer-expirations, or wider boundaries, I'm happy to post inquiries to try match your ask with a third party.
While I've shown the HCI (10-city) index and contracts here, similar graphs are available for each of the ten regional contracts on the Resource Page, or you can link to them here. (BOS, CHI, DEN, LAV, LAX, MIA, NYM, SDG,SFR and WDC). BTW- I'm always looking for ways to make the Resources page more relevant. Please feel free to contact me if you have ideas).
Further, while I've shown changes in contract prices for the ten regional CME contracts, I'm open to posting quotes on any of the top 50 US cities, using HPHF OTC agreements (referencing Freddie Mac indices).
I'd note that all regional contracts show:
1) Strong gains from last year (and, not shown, even bigger gains from the lows in April),
2) Have futures prices that are consistent with further gains, and
3) That implied forward price gains (%) seem to be lower than forward expectations (Good for call buyers?!?)
Please feel free to contact me if you have any questions on this post, have any trading ideas that you'd like to share, or want to learn more about the use of home price index derivatives to hedge home price risk.
Thanks, John