What Parcl Traders Need to Know

• Seventeen tradable North American Parcl markets are down 0.4% MTD in ppsft terms. This compares to July’s 0.9% decline and June’s 1.8% gains.
• MTD leaders include Washington DC (+1.5% MTD) and Las Vegas (+0.8%). Laggards are Portland (-2.5% MTD), Miami Beach (-2.3%), and Denver (-1.9%). Boston moves back into the lead in YTD performance at +18.6%, followed closely by Chicago at +17.3%.
• Parcl traders remain net short, with the aggregate split across all pools 32% long / 68% short. Pools have skewed short since late July, which coincided with the USA price feed beginning to decelerate.
• Total open interest (OI) across all Parcl pools exceeded $200,000 in USDC terms last week; highest OI markets as of August 15th are Philadelphia, Miami Beach, and San Francisco. Each are at least 70% short skewed.
• Paris and Ile-De-France are the newest tradable markets on Parcl. Paris has risen 0.39% MTD (vs. -0.84% in July) while Ile-De-France has declined -1.08% (vs. -0.73%). Stay tuned for more global locations coming soon!

The state of real time real estate prices

Residential real estate prices are down 0.4% MTD in ppsft terms. This compares to July’s 0.9% decline and June’s 1.8% gains.

MTD leaders include Washington DC (+1.5% MTD) and Las Vegas (+0.8%). Laggards are Portland (-2.5% MTD), Miami Beach (-2.3%), and Denver (-1.9%).

Boston moves back into the leader in YTD performance at +18.6%, followed closely by Chicago at +17.3%. YTD losers include Portland (-12.5%), Austin (-10.3%) and New York (-8.5%).

Only four of 17 markets are outperforming the USA Price Feed YTD (+11.8%): Boston, Chicago, Brooklyn, and Philadelphia.

All markets are at least 1% off their all time highs, many of which were set within the past several months, except the USA price feed which is -0.7% from all time highs.

What might this indicate? That regions outside of the most recognizable and populous (largely coastal cities) are driving most of the recent performance.

The Case Shiller updated with May data on Tuesday 7/25, showing a continued recovery in prices across all major markets. Real time data from Parcl Labs picked this up as it was happening, and, in the nearly two months since, show a flattening out of performance. July typically marks the tail end of the seasonal outperformance seen annually in many north/northeast markets.

What are Parcl traders doing?

Parcl traders are skewing short, with the aggregate split across all pools 32% long / 68% short. Pools have been tilted short since late July. Interestingly, this coincides with the USA price feed flattening out after solid gains in May & June.

Total open interest (OI) across all Parcl pools exceeded $200,000 in USDC terms earlier in July; OI now sits at ~$100k. Highest OI markets as of August 15th are Philadelphia, Miami Beach, and San Francisco. Each are at least 70% short skewed.

The USA price feed is near an all-time-high in long skew - consistent with the ‘benchmark’ outperformance highlighted above.

Given the negative positioning, there may be contrarian opportunities, especially in regional markets with diverting relative fundamental trends. Contrarian positions can be particularly attractive to traders that have a counter or market neutral view on Parcl markets with funding rate arbitrage opportunities.

Paris and Ile-De-France are the newest tradable markets on Parcl and also the first European markets. Stay tuned for more global cities & metros, coming soon!

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