There usually aren't many bargains in the stock market, but right now there are. Most of the major homebuilders from Lennar, to Pulte to Centex, all national large production corporations, are valued at about six to seven times earnings, which makes builders' stocks the most undervalued of any vertical in the stock market.

That shows how scared the investment community is of housing. Are they wrong?

Huge builders like Toll Brothers have plummeted almost 50 percent in value because of market fears that there is a housing bubble and that it is leaking air and about to pop. But analysts say the company is highly profitable and has a huge bank of land to build future projects upon.

So what's the problem? Housing starts are expected to dip about 6 percent in 2006. New FED chief Ben Bernanke says he thinks housing will cool but not crash, and that new housing production will ease.

For one thing, no one can control the weather. Housing starts tumbled in December, but were back up by more than 15 percent in January. It was cold, wet and snowy in December, while January was relatively mild.

The National Association of Home Builders (NAHB) says that big builders are "marking down their outlooks for 2006, and rolling out some sales incentives," says David Seiders, chief economist for the NAHB, "the sort of things we see when the market starts to weaken on the demand side." He says builders have also reported more contract cancellations during the past 6 months.

Seiders says one reason to expect a slowdown is that investors, who have driven about 1/3 of the housing market for the past two years, are starting to sit on the sidelines.

But there may be some pockets of hope.

Seems the slowdown in new housing starts may be regional. According to an index of homebuilder confidence calculated by NAHB with Wells Fargo, any score over 50 is positive. In February, homebuilders in the Midwest were the least confident about the market with an index of 33, while builders in the west were giddy with excitement at an index of 74. Also optimistic were southern builders with an index of 64, while builders in the northeast were more conservative at a score of 57.

These scores have virtually gone unchanged in two months, suggesting that builders, like everyone else, are in a wait-and-see mode as the spring homebuying market revs up.

At Realty Times, we've predicted a real estate slowdown for several months, with the proviso that any pullback in housing sales would be temporary. We anticipated that buyers would take a water break before jumping back in the game, and that housing sales in the spring could reach a new all-time record as long as interest rates continue to stay low and housing inventories rise, it will give buyers more incentive than ever to find the home of their dreams.

One piece of advice -- don't go shopping for new homes without your Realtor. A Realtor can represent you by helping you negotiate with the builder. If you do look at new homes without giving the builder or the builder's salesperson your Realtor's card, or signing into the builder's log that you are represented by an agent, you could compromise your agent's ability to help you.

Builder's representatives work for the builder, and you'll find builder's contracts favor the builder, too. By working with your own agent, you'll find you can buy the most house for the least money with a Realtor at your side.