Hedge fund chief Eddie Lampert says housing is ripe for a turnaround.

The billionaire CEO of the $11.6 billion fund ESL Investments has been buying into home builders, mortgage firms, and a home improvement chains in moves designed to reap the profits of what Lampert sees as the imminent housing comeback.

ESL, which owns a 50 percent stake in Sears Holdings Corp., recently purchased shares of Centex Corp., and KB Home, each stake worth a little more than $10 million.

ESL has also bought positions in CIT Group, a subprime home and commercial lending firm, and PHH Corp., a mortgage and mortgage services company.

Lampert's share of CIT is worth $35.5 million, and PHH is worth $25.2 million.

Home Depot is Lampert's biggest bet on a housing upturn. The fund currently holds shares worth $590 million, reflecting recent purchases of 6 million additional shares of the home improvement chain, bringing his total stake to 22.7 million shares.

In recent past weeks, other investors and analysts have also forecast a coming end to the housing bust, and some money managers have moved quickly into housing and housing-related sectors.

Bulls on housing include Barton Biggs, a former chief strategist for Morgan Stanley, and Karl Case, who co-founded the Case-Shiller housing index.

About a month ago, Case told the Boston Herald that, historically, when national housing starts fall below 1 million a month — a point reached in April — a turnaround inevitably begins at that juncture.

Some major home builders, however, may take issue with these optimistic forecasts.

Eli Broad, billionaire founder of KB Home, said in May that the U.S. economy is in recession, and he predicted another 10 percent decline in housing prices. KB Home is one of the largest home builders in the U.S. with operations in nine states.

But, after that additional 10 percent dip, says Broad, housing, housing-related businesses, and the economy in general should start to brighten.

For Toll Brothers, the country's largest luxury home builder, there's also not much light at the end of the tunnel. First quarter revenues were down 22 percent. Pre-tax write downs of land and land options for the firm were forecast at between $150 to $300 million.

Toll CEO Robert Toll told investment bankers recently housing could drop by 20 percent more.

Despite these bleak numbers, Toll Brothers has a stronger cash position than many of the other publicly traded home builders because of low-priced purchases or options on land, and it buys in upscale areas where land prices tend to retain value.

At the extreme depth of the high-end housing downturn come reports from San Diego that Michael Crews Development offered a buy-one-get-one-free home sale that had no takers.

The deal offered a $1.6 million luxury home, and a $400,000 row home at no extra charge. At press time, no takers.