He who sells what his isn't ends up broke or in prison.
looking to profit from bad times is inherently riskier that making a play for the upside.
you could always short the big homebuilders like Pulte or American Home I suppose....or do the appropriate options (calls?)on them.
No, the people who stand to get creamed if the bubble bursts are (1) the homeowners in the hottest markets and (2) the regional banks in those areas, especially those top heavy with mortgages.
Some mortgage backed securities are one-way shorts, too (meaning, the excess return over e.g. treasuries is tiny if everything goes perfectly for them, and if everything goes to heck so will they).
As soon as my dot com was bought at the top of the bubble, I started shorting overvalued junk. I'm not broke or in prison. The "trading" element (as oppoesed to shorting) got me. Had I just maitained my original positions and gone on vacation, I would have been better off.
I'm aware of the risk and would take all the appropriate cautions.
I hadn't thought about the builders. That might be worth looking into.
However, assuming that investors in those stocks are more savvy and that some level of discount is built into their stocks, I'm wondering if there exists an even more pure play for overpriced housing?
I'm curious as to whether it is possible to bet against the people with the excuses that I referenced in my first post. They aren't investing in securities. I imagine not, but thought this was a good thread to toss out the question.
By the way, I'm not profiting from bad times. I'm profiting from the excess greed of others. Remember that the bubble was Clinton's, and it was engineered. I suspect the Real Estate bubble is a remnant of that era.