Housing Futures - What do you all know about them?

[ipoplaya_IHB]

<p><a href="http://www.cme.com/trading/prd/re/housing.html">http://www.cme.com/trading/prd/re/housing.html</a></p>

<p>Can these be used to hedge against coming declines? </p>

 

[IrvineRenter_IHB]

"Can these be used to hedge against coming declines? "





That is their intent. Right now, they suffer from a lack of liquidity, but I have some concerns about their viability long term. Real estate markets trend for long periods of time. When the markets are rising, I don't see the builders hedging much leaving these instruments without much volume. When the builders do need to hedge after the market turns, it will be difficult to find buyers willing to take the other side of the transaction -- again you have liquidity problems.