Are Homebuilding Investors Getting a Second Chance?

All manner of market commentators are trying to call the bottom of the housing market (kudos to VesTopian Mike Goodson for having the stones to register his opinion publicly and financially). Personally, I claim no insight into housing's direction. In fact, it's probably inaccurate to use the term "housing market" as though there's one single U.S. market, instead of hundreds or thousands, each with its own idiosyncrasies.

Yesterday came news that homebuilder sentiment is the lowest its been since 1991. I vividly recall the economy of 1990-1991, particularly the brutal job market for recent grads (like me, despite my highly marketable degrees in English and political science) and fears of $5/gallon gas (at least until the Gulf War started). Needless to say, investing in real estate, or even home builder stocks in 1991 would have been a huge win, despite the last year and a half.

I looked at four public homebuilders that were publicly traded on July 17, 1991 (Toll Brothers (TOL), Centex Corporation (CTX), Meritage Homes (MTH) and NVR (NVR)). Respectively they are up 1400%, 1021%, 530%, 79,000% since that date (feel free to sanity check the return on NVR. Yahoo and Google have its split adjusted price on that day as $.88 and it's currently trading for $700.00. If I'm missing something, please let me know). The S&P is up 308% since then.

Let me repeat, I'm not calling a bottom. Moreover, this quick analysis is just dripping with data-mining. But what's the saying about the best time to buy? Something like "when there's blood in the street, particularly when the blood is your own."