At one time there were the Shiller Case indices. I don't know if they are around anymore
1. Are there real-estate indices which track geographical location?
Yes. S&P/ Case-Shiller real-estate indices are available, as a single national index as well as multiple regional geographic indices. These indices are updated on the last Tuesday of every month. According to the Case-Shiller Index Methodology documentation:
The regional indices use 3-month moving averages, published with a two-month lag. This helps offset delays due to "clumping" in the flow of sales price data from county deed recorders. It also assures sufficient sample sizes.
Regional Case-Shiller real-estate indices
2. Can I invest in real-estate indices?
Yes. The CME Group in Chicago runs a real-estate futures market.
But would you want to invest? Probably not. This market has minimal activity. For the three markets, San Diego, Boston and Los Angeles on 28 November 2011, there was zero trading volume (prices unchanged), no trades settled, no open interest, see far right, partially cut off in image below.
I don't know the reason for this situation. A few guesses:
Not to my knowledge. Often the specific location is diversified out of the fund because each major building company or real estate company attempts to diversify risk by spreading it over multiple geographical locations.
Also, buyers of these smaller portfolios will again diversify by creating a larger fund to sell to the general public.
That being said, you can sometimes drill down to the specific assets held by a real estate fund. That takes a lot of work:
You can also look for the issuer of the bond that the construction or real estate company issued to find out if it is region specific.
Hope that helps.