A recent article in the Wall Street Journal reported on
trades in housing futures on the Chicago Mercantile Exchange.

Apparently traders there are betting that home values in the “San Francisco Metro Area” will drop 24% over the next four years.

This kind of news could send homeowner into a cold sweat until they realize that the San Francisco Metro Area also includes all of Alameda, Contra Costa, San Mateo and Marin counties. It also seems pretty wacky to anticipate a 24% drop by 2011. The downturn of a market cycle usually doesn’t take that long.

I also take solace in remembering that the Chicago Mercantile Exchange is best known for its history of trading eggs, butter and pork bellies-not real estate.

A more local point of view on the market is offered in a recent Chronicle article by Carol Lloyd– the gist of the piece is that the market in San Francisco is varied, but definitely strong in certain pockets.

This entry was posted on Saturday, November 17th, 2007 at 12:00 pm and is filed under Investors, Market Conditions. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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