When I was at the Inman conference in Miami, last week, Robert Shiller, economist-extraordinaire was shilling his housing market futures and options products (more information, here).

Basically, these financial products allow you to "bet" on the housing market. If you think home prices will rise, you can buy some futures and make some money (um, yeah). If you think home prices will fall, you can buy some futures to protect your investments.

You can buy a futures contract covering any one of ten major metropolitan areas, or the nation, as a whole.

Who would want to buy such a product? Home builders. Developers. Large investors in home building and home builder stocks.

The typical homeowner wouldn't buy an option or futures contract, because the cost is too high, compared to the risk.

The market does give us a good idea of what others think is the direction of the market.

U.S. housing prices may decline "a little" within the next year, but any such drop is likely to be mild and inconsistent with a bursting housing bubble, according to a paper written by a Federal Reserve economist.

Based on an analysis of housing futures and options and derivatives of housing-related company shares, "market participants expect home prices to decelerate sharply or actually decline a little within the next year," wrote J. Benson Durham, an economist with the Fed's monetary affairs division. However, the anticipated drop in prices "is mild compared to some estimates of the purported overvaluation of the housing market," he added. The paper, dated September, was posted on the Fed's Web site Thursday.

Complete story: U.S. Home Prices May Fall But Drops Will Be Mild - By Brian Blackstone, The Wall Street Journal Online