Hedge and/or Investment Idea

It is not easy to find a security that will move in the opposite direction of home prices to serve as a hedge or investment against falling prices, however, I keep looking. I have been kind of curious about some REIT names that would do well if housing did poorly. Specifically, there is an argument to be made that apartment REITs should see improved demand if owning houses falls out of favor. Simply, fewer home owners equal more renters. Unfortunately, many REITs are bought as fixed income proxies. The investor who buys a REIT looks for a specific dividend yield, therefore, REITs have a lot of interest rate risk. The conundrum in this, if interest rates go higher, more people will be forced to rent in Apartment REITs, however, the higher interest rates will cause the value of the REIT share price to fall, so that the appropriate yield could be attained. Regardless, this REIT, Home Properties (HME), might be interesting, especially since a lot of its properties are in New Jersey.