M.D.C. Holdings' sales tumbled off the precipice in May and June just the same as they did for many builders. The difference was that, despite the crash, the company was able to net enough new sales in its second quarter to actually show a new order increase of 4% over last year.

And the the Denver, Colo.-based Richmond American brand's closings, thanks in part to an impressive federal tax credit-focused sales campaign, improved closings by 71% to 1,135 houses, compared with 665 homes closed in the same quarter last year. That's the single biggest year-over-year increase in quarterly closings in at least 15 years.

Still, the builder fell a bit short of logging a profit, losing $3.7 million ($0.08 a share), versus a loss of $29.6 million ($0.64 a share) in the same quarter of 2009.

Executives credited the company's new smaller, more affordable homes with boosting sales as well as margins. The new designs comprised 55% of all home orders and reached as high as 90% of purchases in some markets, they said.

M.D.C, which has maintained a land-light model, has also been busy replenishing its land stock, securing control of 157 new communities across the country in the last 12 months, 36 in its second quarter.

Still, the latest slow down in home sales has made executives cautious about recovery. Mizel thinks that the root of the problem runs deeper than the expiration of the tax credit to a drop in consumer confidence overall, not just in the U.S. economy but the economies of other countries in the world. And the political rhetoric related to the upcoming mid-term elections has exacerbated it.

"When someone's buying a home they need to know they are going to have a job and know that the value (of the home) is going to be there," Mizel said.

"History had it where housing led the economy into a slow down and usually housing led it into recovery ,and here it's a bit different," he added. "Other segments (of the economy) feel like they have turned around, and housing is a laggard."

"One could take the term that it's the darkest before the dawn," Mizel continued. "But when someone asks what time it is, I say, 'I don't know, I don't' have a watch.'"

However, no matter how long it takes housing to pull out of the recession, Mizel is confident that the company's $1.6 million in cash and investments will allow it to wait it out, plus profit from any opportunities that come from the downtime.

In response to an analyst's question about why M.D.C. doesn't use some of its huge cash stash to buy back its debt, Mizel hinted that he has other ideas for how to use it.

"We expect to use the resources we have in our business and this is a very opportunistic time in this industry and we will not miss any opportunity."

What about following the lead of Lennar

and Toll Brothers which created separate entities to manage pools of troubled FDIC assets?

"I think that we have always had an open mind," Mizel replied.

Citigroup home building analyst Josh Levin put out a research note stating, "In our opinion, MDC's tone during its 2Q10 earning call contrasted sharply with the tone on its 1Q10 call. Based on CEO Larry Mizel's comments on that call, coupled with that we believe MDC has been among the most active participants in the land market over the last few quarters, we think MDC may have been too optimistic about the housing market recovery."