I don't agree. If you own your own home, then a property crash is great because it allows you to trade up to a bigger place at a discount. Example: Guy owns a $200k apartment, but would like to move to a house costing roughly $400k. Real estate prices fall 30%. He loses $60k on his apartment, but the house falls $120k. He makes his move, selling the apt to buy the house - thanks to the 30% fall, he has just turned a profit of $60k. Only reason to hedge/sell real estate is if you have an investment property portfolio. Remember that unless you own a home, you are 100% short real estate since you have to live somewhere. Thus owning 1 home is basically going from 100% short to flat (or 20-50% short if you plan to trade up). "Hedging" thus turns you from flat or partiallly short, to fully short - a pretty speculative and risky move. It should be treated as a speculative trade, because it is NOT a hedge.