I’ve posted quotes at the CME for puts on the ten regional Case Shiller home price contracts (and the 10-city index) that expire in Feb 2020. Recall that these options will settle on the value of the Case Shiller index released that month, and that that index references data through … Read More
My sense is that the best conditions for a home price index hedging market exist when you have:
- Pronounced different views on the future
- Recent history to color participants interest (or need?) in hedging
- A mindset that trading (or hedging, betting) is an acceptable activity.
No regional market satisfies these … Read More
I imagine that one of the biggest challenges facing a first-time home buyer (and their real estate agent) is the binary leap from 100% rent to 100% buy. Such a jump is often the biggest financial decision that people have to make. With new homes costing $400-750,000 in certain markets, … Read More
Yes, I’m going to pile on to social media efforts to capitalize on Super Bowl interest. Of course what I have in mind is here is getting readers to debate which side they prefer of the current pricing that has the CME Case Shiller BOS contracts outperforming the LAX contract … Read More
Quotes on CME Case Shiller home price index futures have tipped over toward being consistent with negative HPA in 2019 for five of the ten regions (NYM, CHI, LAX, SDG, and SFR). Of the other fiver regions none are much above zero HPA, with BOS, DEN, and WDC just below … Read More
I’ve compiled an interesting set of data that I’ll use to illustrate how the CME S&P Case Shiller home price index futures have traded over the last 7+ years. It may help traders understand how to better trade the contracts, as well as quirks within the contracts. I will be … Read More
While many reports focus on the historical robustness of home prices (e.g. “FHFA Home Prices See No Slowdown”), and some pundits have only slightly revised lower their forecasts for home price gains for 2019-20 lower, quotes on the CME Case Shiller home price index futures are consistent with more … Read More
I’ve compiled a table of home price changes over the last two large downturns (the post S&L crises, and Great Recession), and the current cycle, that should be of interest to people trading home price indices today. I’ve also posed some questions (below) that people trading CME futures, or academics … Read More
I have an angle to discuss with anyone following CPI (inflation) and Fed policy. This is my latest effort to look for reasons for potential longs to be interested in the inversion that’s taken place in the CME Case Shiller home price futures.
The table below draws data related to … Read More
The performance of the CME Case Shiller home price Nov ’19 futures contracts varied by region during 2018. (I picked Nov ’19 (X19) as the Nov. cycles tend to have the best liquidity.)
Six of the ten regions were higher (with LAVX19 posting, by far, the largest gains of … Read More