What Parcl Traders Need to Know

• Seventeen tradable North American Parcl markets are down 0.9% MTD in ppsft terms. This compares to -0.3% MoM in August and -0.9% MoM in July.
• MTD leaders include Washington DC (+1.6% MTD) and Denver (+1.2%). Laggards are Austin (-3.9% MTD), Boston (-3.5%), and Chicago (-2.6%).
• Boston is no longer the YTD leader at +10.2% (+8.9% YoY); Miami Beach (+12.7% YTD), Denver (+12.5%), and Brooklyn (+11.9%) each jumped in front of the former pace holder. YTD losers include Portland (-5.5%), and Austin (-4.5%).
• Parcl traders remain net short, and as short as they’ve been since inception; the aggregate split across all pools 5% long / 95% short.
• Total open interest (OI) across all Parcl pools is above $325,000 in USDC terms, another all-time-high; highest OI markets are Austin, Boston, and Los Angeles.
• Paris and Ile-De-France are the most recently launched markets on Parcl. Paris has fallen 0.5% MTD (vs. -1.0% in September) while Ile-De-France has risen 0.6% MTD (vs. -0.4% in September). Stay tuned for more global locations coming soon!

The state of real time real estate prices

Residential real estate prices are down 0.9% MTD in ppsft terms. This compares to -0.3% MoM in August and -0.9% MoM in July.

MTD leaders include Washington DC (+1.6% MTD) and Denver (+1.2%). Laggards are Austin (-3.9% MTD), Boston (-3.5%), and Chicago (-2.6%).

Boston is no longer the YTD leader at +10.2% (+8.9% YoY); Miami Beach (+12.7% YTD), Denver (+12.5%), and Brooklyn (+11.9%) each jumped in front of the former pace holder. YTD losers include Portland (-5.5%), and Austin (-4.5%).

All regional markets except Phoenix and Las Vegas are at least 1% off their all time highs, many of which were set within the past several months. The USA price feed remains -0.3% from 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 June data on Tuesday 9/26, showing continued but slowing gains 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 flattish performance in most markets. While many markets are up low/mid single digit percent from their end-June marks, a few, such as San Francisco, and Washington DC are off their highs and close to turning negative. Denver is the clear outperformer.

Importantly, July marks the tail end of the seasonal outperformance typically seen in many north/northeast markets.

What are Parcl traders doing?

Parcl traders exited September as short as they’ve ever been; the aggregate split across all pools exited the month at 10% long / 90% short. Skew has gotten more extreme thus far in October and now sits at ~5% long / ~95% short. Interestingly, this coincides with the USA price feed stabilizing after a modest drawdown in late July and early August.

Total open interest (OI) across all Parcl pools is above $325,000 in USDC terms, another all-time-high; highest OI markets are Austin, Boston, and Los Angeles.

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.