House-Price Futures To Debut

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CHICAGO - (11/14/05) -- Investors, lenders and homeownerswill be able to hedge against the so-called housing bubble byinvesting in housing-price futures, based on the median home pricein 10 major U.S. markets or an index based on the ten cities. Thehouse-price futures, which were developed by Fiserv Case ShillerWeiss Inc., have been approved for trading o the Chicago MercantileExchange and are expected to debut early next year. The concept ofreal estate futures has been discussed for several years but hasbeen given a boost by the run-up in housing prices of the pastseveral years, referred to by some as a 'bubble.' Home prices haveappreciated an average of 65% since 2000 and more than doubled insome markets, according to the National Association of Realtors.Now investors, lenders and homeowners are worrying that a tumble inprices could have severe economic impacts. The new futures willallow them to bet on the direction of housing prices and hedge forthe potential bursting of the bubble. Investors will be able totrade contracts based on median home prices in Boston, Chicago,Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, SanFrancisco or Washington, D.C.

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