Price Speculation
Investors with strong views on the direction of residential real estate for a City Index can utilize Parcl to express a long or short view.
Saving for Future Home
Prospective homeowners wanting a home within a city with an index may choose to invest a portion of their savings toward that new home to capture real world property value changes within their desired market.
Hedging: Homeowners
Homeowners may choose to utilize Parcl to hedge price fluctuations of their own property. This theoretical use case could introduce the risk that the homeowner’s home does not trend at or near the market’s median price per sq. ft..
Hedging: Mortgage Bonds
The default risk of mortgage bonds theoretically rises as the price of homes falls. Portfolio Managers investing in RMBS could theoretically choose to hedge some of their underlying property value risk with a combination of city indexes.