Waiting is a hard thing to do. Leonardo da Vinci said, “I'm extraordinarily patient, provided I get my own way in the end.” Considering the factors that have home builders as a group in waiting-for-the-bus mode, they're really not sure of whether they're going to get their way in the end. Part of the reason for the state of limbo is the disorderly exodus of investor buyers from what had been a handful of sizzling markets. Investors' and speculators' rush in unison to escape ultimately will slow their departure and continue to distort business indicators. Their presence in the run-up belied core demand. Their angst-driven desire to get out warps what core supply looks like. For public builders looking to make real-time adjustments to their capacity and inventories, that accounts for two wrongs, increased cancellations, and slower absorptions. Two wrongs still don't make a right.

Another item that's got home builders in suspense is interest rates. Ben Bernanke, the new guy at the Federal Reserve's helm, hasn't so far meddled with former chairman Alan Greenspan's longstanding interest rate increase program. Another quarter percent here, another there, and we might be done, but not knowing the final ceiling, and what impact that will have on 30-year mortgage rates, it's hard to predict where affordability will be by year end.

So purer gross margin visibility is hostage not only demand benchmarks minus investors, but also adjusted for who the market may have leave behind as interest rates notch upward.

A third reason big builders' leadership may feel they're in purgatory traces to the overhead and costs of sales lines on their own balance sheets. With spigots turned to full volume as has been the case for the past several years, there's only so much companies could accomplish on the cost side of the equation. In the rush to open communities—almost 500 new neighborhoods in the past 12 months among just the 21 public companies we cover in this year's BIG BUILDER 2006 Public Report Card starting on page 60—overheads balloon, but as markets moderate, it will be bean-counter heaven.

In the sudden doldrums of market correction, the first instinct is to slash costs and head downward trends off at some figurative Y axis. Talent may feel as if it's a back-burner issue as the need for redeployment and rightsizing emerges, but it's more critical than ever to have the people who can win on a dare.

Yes, what's called opportunity is baked into overheads and cost of sales these days, but waiting just long enough to get clearer on the where and how much of moderation might be the way to go.

A fourth unknown has newly emerged in the big builder pantheon as challenge seeps into the market. It's called competition, a concept hardly known in an industry that has meted universal favor and blessings on almost all comers in almost all markets over the past few years.

Succinctly, Credit Suisse First Boston home building analyst Ivy Zelman puts it this way: “The bull run of home prices over the last three to five years has rendered differentiation in business models unnecessary.”

But now, like a greenroom full of Mr. Universe contestants, muscular balance sheets rippling and strategies preening for their moment to shine, the nation's leading public builders are going to need to go through their next challenge as solo acts.

Meanwhile, in our Public Builder Report Card, let your eyes look one final time at public behavior at its finest moment of all. As if two-year statistical comparisons aren't impressive enough, in 36 months, our basket of 21 publicly traded home builders has jumped 60 percent in revenues, an increase of $43 billion; have increased in home closings by 31 percent, a jump of 80,000 homes, and collectively, have achieved a 42 percent increase in backlogged home sales, an increase of 56,000 homes in backlog. Now that's good public behavior.