It’s all gonna be OK

Posted on October 21, 2011 by ScottC

A sure sign that home prices have stopped falling:

A San Francisco insurer will roll out coverage against falling housing values in Ohio, the first state where it is selling policies for owners of single-family houses and condos.

Home Value Insurance Co. will use calculations by the Case-Shiller Home Price Index to decide payouts if homeowner policyholders sell their houses below the insured values. The company, founded in 2009 and headed by former investment banker Scott Ryles, will sell its Home Value Protection policies through independent agents.

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3 Responses

  1. Unknown's avatar
    ashotinthedark, on October 21, 2011 at 9:06 pm said:

    That's great! Definitely the best sign I have seen.

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  2. Unknown's avatar
    Brent Nyitray, on October 21, 2011 at 9:55 pm said:

    The listed property derivatives market doesn't really trade, but if you look at the OTC property derivatives market, the market is predicting a flat market for the next 5 years or so.Radar Logic RPX Index futures will be trading on the CBOE futures exchange sometime in the very near future. It will be interesting to see where they start trading. I may end up making markets in it.

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  3. Unknown's avatar
    Brent Nyitray, on October 21, 2011 at 10:05 pm said:

    I would also add that I have watched the trading (or lack thereof) in the Case-Schiller futures. They really do not trade. I don't think there is enough open interest to cover the insurance costs for a double-wide in Toledo Ohio.What that means is that this insurance company is not and can not hedge its exposure. In other words, if real estate price rise, he gets your premium payments. If real estate prices fall, he (or actually his company) is bankrupt – get in line with all the other policy holders and creditors and if you're lucky, you might get the premium you paid back.

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