FORTUNE — If you believed poor mortgage lending and worthless securities were about to cause the biggest housing bust in American history, would you buy a house? I guess not.
That’s the somewhat flimsy premise of a recent study by one Princeton economics professor and two others from the University of Michigan definitively titled “Wall Street and the Housing Bubble.”
The three professors, Ing-Haw Cheng, Sahil Raina, and Wei Xiong, took a look at whether Wall Streeters — mid-level investment bankers from some of the most implicated firms in the financial crisis, like Lehman and Bear Stearns — were buying real estate in the run-up to the housing bust.
MORE: Too little, too late for struggling borrowers?
Turns out they were, like everyone else. If anything, Wall Streeters were more frenetic acquirers of personal real estate than the rest of us. The question is what to make of this information.
The professors’ conclusion: Wall Street is more innocent than you think. Many people believe Wall Streeters financed predatory subprime mortgages and sold them off to investors, knowing they would go belly up and take the housing market and the economy with it. But they did it anyway because they were getting paid big bonuses to do so.
Cheng, Raina, and Xiong say that may not be true. The fact that Wall Streeters were buying houses, according to the professors, means they were just as clueless about the housing bubble as the rest of us. What’s more, they must not have known the subprime mortgage loans they were financing would result in massive losses.
But here’s the problem with the study: Guess who else was buying big, expensive houses in the mid-2000s? The hedge funders and others who 100% thought the housing market was headed for a bust.
MORE: How SEC nominee Mary Jo White can win over skeptics
John Paulson bet hundreds of millions of his and investors’ money against the housing market. That didn’t stop him from paying nearly $15 million for a 28,000 square-foot townhouse in Manhattan in 2004, the beginning of the period that the professors began looking at Wall Streeters’ house-buying habits. In fact, throughout the run-up to the housing bust, it appears Paulson was happily shoveling his money into personal real estate. In 2006, he paid $12.8 million for a house in Southampton.
The executives of Magnetar, the hedge fund that according to Propublica constructed complex securities to hide their bets against the housing market, also didn’t seem to have let their views on the market thwart their home purchases. Alex Litowitz, the founder of Magnetar, along with his wife, spent much of the 2000s building a 10,000 square-foot English manor style house in the North Shore of Chicago. The house was featured in the September/October 2008 issue of Chicago Home and Garden. Not only did they build the house, but they stocked in with details and period pieces. The article says the house has a walnut paneled dining room with two limestone fireplaces.
Litowitz’s colleague at Magnetar, David Snyderman, bought a 6,500 square-foot McMansion in the Chicago suburbs in August 2007. Although according to Blockshopper.com, he paid just over $500,000 for the house. The last buyer had paid nearly $2 million two years before. So you could argue that Snyderman was trying to buy at the bottom.
MORE: The $1.3 billion mortgage deal still haunting Goldman
Steve Eisman was featured prominently in Michael Lewis’s book on those who bet against the housing market,
The Big Short
. Nonetheless, just eight months before the collapse of Lehman, Eisman bought a three-bedroom Park Avenue apartment for nearly $7 million. He sold it two and a half years later, after never living in it, for just over $5 million.
And economist Nouriel Roubini hasn’t let his doomsaying get in the way of his domains. In early November 2010, Roubini predicted that housing prices would drop as much as another 10%, which he said would exacerbate the U.S.’s foreclosure problems and the strain on banks. “We’re going to have another nasty crisis,” Roubini said. A little over a month later, Roubini closed on a triplex penthouse apartment on Manhattan’s Lower East Side. The price tag was $5.5 million.