Hedging against rapid market corrections (upward) in housing
2010 Nov 22, 1:40pm 5,116 views 16 comments
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lotr1978
@
2010 Nov 22, 2:34pm
Thanks Troy. Doesn't look like anyone actually trades this though. Honestly who would, seems like casino gambling. Bubblesitter, my wife tells me I'm nuts for even worrying but I can't help myself.
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Hello
I am planning to buy a house in Phoenix in summer 2012 when I return to the city. I fear the local market is way undervalued with houses selling for below building cost and that these deals may be gone come summer 2012. I was curious if there was a way to invest in specific city Case-Shiller indexes (in this case Phoenix) as a hedge against a rapid turnaround. The thought is that if the market declines the value of that index declines and my investment values declines in like fashion. To the contrary, if the market rebounds 20% by 2012 I am protected somewhat from this.
Given how local real estate markets are I doubt an general inflation tracking index would work. I also need to maintain liquidity since theoretically I'd be pulling all of this money out to buy the house. Stocks and commodities are just too volatile and risky, money markets/CDs too worthless, yet I fear inflation will eat away at the money just sitting in an account.
Thanks in advance.
#housing