Macro Securities Research, a company affiliated with Robert J. Shiller,
the Yale economist, has reached an agreement with the Chicago
Mercantile Exchange to list pairs of derivative instruments that are
essentially index funds linked to home prices in certain markets. One
instrument in each pair will rise as its market index rises; the other
will rise as the same index falls. That will let investors bet on the
direction of housing prices. Similar, but less sensitive, vehicles are
being offered by HedgeStreet, a firm in San Mateo, Calif., that offers
small-scale derivatives speculation online.
Here is the full story; note that economists still lack a good explanation why such markets are not more common or met with greater enthusiasm.