The initial public offerings (IPOs) for the new MacroShares real estate exchange traded funds (ETFs) are finally taking place.

The highly anticipated auction of MacroShares Major Metro Housing Up (UMM) and MacroShares Major Metro Housing Down (DMM) began on April 28 and will run through May 5 at 1 p.m. ET, according to Globe NewsWire. The initial offerings of both UMM and DMM will occur simultaneously.

Liam Denning for The Wall Street Journal reports that U.S. residential real estate was still valued at $18.3 trillion at the end of 2008, according to the Federal Reserve. The brainchild of economist Robert Shiller, they will offer investors a way of betting on rising house prices by buying “Up” shares, or expressing pessimism via “Down” shares, with no actual physical housing to back them.

The ETFs will be tied to the Standard & Poor’s/Case-Shiller Composite 10 Home Price index. When the Up and Down shares float, proceeds will be invested in U.S. government bills to ensure liquidity. If the index moves up, the trust behind the Down shares will shift a corresponding portion of its assets to the Up shares trust, raising the net asset value underlying the Up shares. The prices should follow.

There are few alternatives for investors who want exposure to the residential housing market – real estate investment trusts (REITs) focus on commercial property, and homebuilders don’t give perfect exposure. Investors who want more direct access to housing prices could find these funds attractive.

MacroShares is also the name behind two up/down oil funds. The first incarnation liquidated after oil prices topped $111 for three consecutive days. Last July, they launched a second set of up/down oil funds: MacroShares $100 Oil Up (UOY) and MacroShares Oil Down (DOY).

Just as their predecessors had been, UOY and DOY are paired products that track the price movements of West Texas intermediate oil. The starting price for a share is $25, representing one-quarter of the benchmark oil price. As the price rises and falls, assets are transferred back and forth dollar-for-dollar between the Up and Down trusts.

Yesterday, the Case-Shiller Index of 20 major cities fell 18.6% from a year ago in February.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.