Understanding Real Estate Option

Volatility creates opportunity

Real estate values continuously change. The value is easily observable if the same real estate property is bought and sold every day, similar to company stock. That is not the case. To help us to gauge the property value, there are number of index which has been developed, in order to track property value change. We use those indexes to derive property value at any given time. Future expectation for the level of the index creates volatility in trading financial instruments derived from those indexes. For example, in case of San Diego, the quarterly index changes and statistics are below.

Research Real Estate Market Analysis for your area.

Historic return on Real Estate in San Diego is 7.4% per year

Historic price change or volatility for Real Estate in San Diego is 5.5% per year

This example demonstrates an opportunity for investors to benefit from price changes. Investors are able to buy and sell real estate option contracts at will.

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