Those of you who have used Betfair will know it works by the users themselves betting both for and against events; 'backing' or 'laying' in the jargon. Betfair just holds the stakes and pays out when the results come.
The Economist reports that a housing derivative has been set up in the US that allows homeowners to hedge against house price movements; like Betfair, users bet on whether house prices will rise or fall. Optimists are matched to pessimists, and 'bets' are fully paid up front. Unlike Betfair, the 'betting slips' can be traded, giving the derivatives liquidity.
I'm not quite sure why I don't think this will work, I just don't think it will. Inventive, though.