Unless you just returned from a trip to the moon, you have probably heard of the bubble talk, i.e. the irrational exuberance in the housing market. If you are currently a home owner, how would you protect yourself and your family in the event of a bubble burst.

Alan G at the Federal Reserve has begun nudging up short-term interest rates, which applies upward pressure to mortgage and other long-term rates, which at some point, Kleiman reasons, will choke off the buyers' enthusiasm. Case in point, the monthly payment on a 30-year, $500,000 mortgage at 5.5% will only pay for an $430,000 mortgage at 7%.

If your home has appreciated more than 50% in the last couple of years and you worry about a crash in the housing market, what do you do?

If you have locked in a low 30 year fixed mortgage and you have stable income to pay the monthly due, the best option may be do nothing.

However, if you are on a variable rate mortgage, you may need to evaluate whether your income growth can catch up with the increase in interest rates in the future. If the answer is NO. One possibility is to convert your home into liquid capital, i.e. sell your home and go into rental. You are giving up home ownership for a peace of mind, so to speak.

For people who are financially savy, you can investigate a few conventional hedging possibilities, including HedgeStreet, a website that allows individuals to speculate on economic events, and another venture that has brought together Yale University economist Robert Shiller and the Chicago Mercantile Exchange to develop derivatives in housing and other asset classes. But the trading market at HedgeStreet is still thin, and the CME project hasn't yet gotten off the ground.