Pattern points to housing bust’s end

Forget soaring foreclosures and the free-fall in home prices. The battered real estate market may have finally hit bottom, a nationally known Boston real estate expert is declaring.

Bucking widespread gloom about the state of real estate, Wellesley College housing market guru Karl Case sees strong signs of a possible rebound.

And he even thinks it might be time for a little bargain hunting as well.

Case is basing his optimism, which stands out in a sea of gloomy predictions, on a key economic indicator. It’s not the first time he’s courted controversy. Back when real estate prices were headed skyward, Case was a lone voice predicting a painful real estate downturn.

“Every single time we have gotten to this point, at this time, almost to the exact decimal point, things start to rebound,” Case said.

According to Case, the decline in housing starts nationally has reached a key threshold, dropping below the 1 million mark last month.

Over the past 30 years, this has signaled the end of a real estate market downturn. Housing construction rebounded sharply in the ’70s, ’80s and ’90s after reaching this low point, Case said.

He expects the same phenomenom to be true this downturn as well.

“Eventually, steam runs out of the downturn,” Case said.

Moreover, the Boston area, which has suffered from serious hangovers after past real estate booms, may get off more lightly this time around than the rest of the country.

While prices rocketed locally during the recent real estate boom, the Boston area did not see the orgy of construction that flooded markets like Florida and Nevada with new homes.

Still, not everyone is jumping on Case’s bandwagon - including his business partner, Yale economist Robert Shiller.

Shiller, who runs the respected Standard & Poor’s/Case-Shiller home price index with Case, recently made headlines when he predicted the decline in home values would exceed that of the Great Depression.

Fellow economist Nicholas Perna said he would like to believe Case, but he’s not sure, either, that the worst is over.

“I really hope he is right,” Perna said. “If you start seeing signs the housing thing is turning around, you will see housing stocks go up, financial stocks go up. A lot of things ride on this.”