There aren't too many builders looking at land deals right now. But M.D.C. Holdings in Denver, with its strong 37% debt-to-cap ratio, is one of the few knocking on doors and looking at land. But right now, it's not finding much that it likes.

"We haven't spent much in the way of land acquisitions so far, even though we are actively on the hunt," said Larry Mizel, M.D.C's CEO in the company's third quarter conference call. "I don't if there's any market out there, specifically in the West, where we've seen enough action to take any movement."

Price is one issue the company is running into. Terms are another. Right now, there's not enough pressure on land sellers to move on either of those fronts at this point. "Until they [land sellers] get pressure from their partners and those that are financing them, their motivation isn't desperation," said Mizel. "In this market the prices have to go quite a bit lower to be attractive, particularly in the Western markets."

But that could soon change, according to Gary Reece, M.D.C's CFO. As the non-public builders interest reserves and as the banks recognize the market conditions, he sees more land opportunities next year as lenders put pressure their builders.

But there are some markets where the company has made purchases. "The few lots that we have purchased have come in Colorado, for example," Mizel said. "Colorado has been difficult for a long time, but it hasn't deteriorated as much. There are still pockets of lots in great locations where it does make sense to buy. The same thing holds true in the Mid Atlantic and the Delaware Valley. Those markets have not deteriorated as much of late. Those are areas that we've seen limited amount of opportunities."

It also doesn't expect to go over a three-years supply of land. "We don't have to buy lots anytime ever," Mizel says. "We are going to buy lots when the prices makes sense and the market conditions are right, even though we're ready, willing and able right now. The fact is that we have a substantial amount of lots [more than 13,000 lots and over 18,000 unlcosed lots]] that can carry us through."

M.D.C. has sold lots in California and Arizona at what Mizel called "pretty distressed prices and is still taking impairments in markets like California, Nevada, and Arizona. It hasn't taken impairments in Utah. On the East Coast, Florida has been problematic, but M.D.C.'s exposure in that market was limited. The company took impairments of $36.4 million related to homes that closed during the third quarter. Without, that impairment, the company would have taken negative margins.