What Parcl Traders Need to Know
- Seventeen tradable Parcl markets are down 0.6% MTD in ppsft terms, compared to June’s 2.2% rise and May's 2.2% gains.
- MTD leaders include Las Vegas (+1.7% MTD), Chicago (+1.2%), and San Francisco (+0.7%).
- Laggards are East Coast stalwarts Boston (-3.8% MTD), New York (-3.1%) as well as Miami Beach (-2.0%). Boston was a top performing market in June (+5.6%) and tied with Chicago for the top performing market YTD (+19.5%).
- Traders are balanced with the aggregate split across all pools 54% long / 46% short. Certain pools are notably skewed, however. Standouts are Brooklyn (~92% long, ~$14k OI) and Denver (~80% short, $13.6k OI).
- Total open interest (OI) across all Parcl pools exceeded $200,000 in USDC terms last week; highest OI markets as of July 17th are Brooklyn, Denver, Chicago, and Phoenix. OI now sits at ~$170k, +124% from June’s mid-month update.
- Paris and Ile-De-France are the newest tradable markets on Parcl. Stay tuned for more cities coming soon!
The state of real time real estate prices
Residential real estate prices are down 0.6% MTD in ppsft terms, compared to June’s 2.2% rise and May's 2.2% gains.
Month-to-date leaders include Las Vegas (+1.7% MTD), Chicago (+1.2%), and San Francisco (+0.7%). Chicago is tied with Boston for the lead in YTD performance, while San Francisco is towards the middle of the pack at +5.6% YTD, though well below USA at +11.8%. Las Vegas remains in the bottom third in YTD performance terms at +4.4%.
Laggards are East Coast stalwarts Boston (-3.8% MTD), New York (-3.1%) as well as Miami Beach (-2.0%). Boston was a top performing market in June (+5.6%) and tied with Chicago for the top performing market YTD (+19.5%). New York is about average, though still below USA (+11.8%). Miami Beach remains in the top third in YTD performance at +12.6%.
We are observing a continuation of the trend of regional divergence that has persisted for much of the past ~12 months, at all levels of geography (national regions, state vs. state, intra-metro, etc.)
Philadelphia and Chicago remain at all time highs, while the USA price feed is just 0.1% off its all time high, set in July 2022. Four markets remain well off their all time highs: Austin (-16.3% from ATH), Portland (-11.8%), New York (-9.4%) and Brooklyn (-7.2%).
The Case Shiller updated with May data on Tuesday 6/27, 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 continued but slowing recovery, with many markets up low/mid single digit percent from their end-May marks. This recovery may be nearing a pause or reversal, however, if July MTD performance is any indication. July also marks the tail end of the seasonal outperformance typically seen in many north/northeast markets.
What are Parcl traders doing?
Parcl traders are roughly balanced with the aggregate split across all pools 54% long / 46% short. Certain pools are notably skewed, however. Standouts are Brooklyn (~92% long, ~$14k OI) and Denver (~80% short, $13.6k OI).
Total open interest (OI) across all Parcl pools exceeded $200,000 in USDC terms last week; highest OI markets as of July 17th are Brooklyn, Denver, Chicago, and Phoenix. OI now sits at ~$170k, +124% from June’s mid-month update.
Given the variable 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. Stay tuned for more cities coming soon!
Disclaimer: This article has been written purely for educational purposes. This article is not intended to be investment advice of any kind.
