Which Way Will the Red Hot Real Estate Market Move Next?

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The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

In the past year, the housing market in the United States has been like riding a roller coaster at a breakneck pace, with demand surging then falling back as many first-time buyers found themselves shut out of a market where houses were already sold by the end of an open-house, and offers needed to be thousands of dollars higher than the asking price to even be considered. 

As the market has continued to heat up, opinions on both sides of the coin have become more vocal. Some players believe that the surge in prices has gone too far and that the market will be coming back down to earth soon. On the other hand, some are saying that the changes reflect real and lasting differences in the preferences of homebuyers, such as large numbers of people moving out of cities and looking to purchase homes at locations across the country that perhaps have not seen as much action before. Remote working has provided many opportunities for individuals and families to move to new and different locations than would have previously been possible.

One thing for the near term that this affects is volatility in the market and variability of prices for many real estate equities, holdings and stocks. As individual prices on houses have gone sky high, it may be valuable to watch and pay attention to the prices and valuations of companies that deal with the real estate market, along with real estate investment trusts (REITs), which are usually directly in the business of owner or operating income-producing real estate.

For experienced traders who welcome volatility and risk, and are looking for a way to trade the overall real estate market on a daily basis, the Direxion DRN/DRV Daily MSCI Real Estate Bull and Bear 3X Shares ETFs attempt to provide a daily 3 times leverage based on the performance of the MSCI US IMI Real Estate 25/50 Index. 

The IMI Real Estate 25/50 is an index that is designed to measure the performance of the large, mid- and small capitalization segments of the U.S. equity universe that are classified in the real estate sector as per the Global Industry Classification Standard (GICS). While it is not possible to invest directly into an index, ETFs like DRN and DRV allow trading based on the movement and direction of the underlying index.

Traders who are looking to profit from the real estate market without having to redo any drywall or flip any houses may want to look into the leveraged DRN and DRV pair — DRN for a bullish market outlook and DRV for a bearish hypothesis. 

An investor should carefully consider a fund’s investment objective, risks, charges, and expenses before investing. A fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a fund’s prospectus and summary prospectus call 646-760-3323 or click here. A fund’s prospectus and summary prospectus should be read carefully before investing.

Investing in a Direxion Shares ETF may be more volatile than investing in broadly diversified funds. The use of leverage by a fund increases the risk to the fund. The Direxion Shares ETFs are not suitable for all investors and should be used only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged, or daily inverse leveraged, investment results and intend to actively monitor and manage their investment.

Direxion Shares Risks is an investment in the ETFs involves risk, including the possible loss of principal. The ETFs are nondiversified and include risks associated with concentration that results from an ETF’s investments in a particular industry or sector that can increase volatility. The use of derivatives such as futures contracts and swaps are subject to market risks that may cause their price to fluctuate over time. 

The ETFs do not attempt to, and should not be expected to, provide returns which are a multiple of the return of their respective index for periods other than a single day. For other risks including leverage, correlation, daily compounding, market volatility and risks specific to an industry or sector, please read the prospectus.

Distributor for Direxion Shares: Foreside Fund Services, LLC.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.