Throughout the slump, Wall Street has valued MDC Holdings highly because of its conservative balance sheet. The company has $1.9 billion in liquidity, a 0.14 net debt-to-capital ratio and it continues to reduce its land inventory. It generated $675 million in cash flow over the last 4 quarters and has $700 million in cash on hand. But that doesn't mean it's sitting tight through the downturn.

"During this period of contraction and this period where the market is difficult, we're working on the consumer having a better experience in buying a home," said Larry A. Mizel, CEO of MDC at the Credit Suisse 2007 Homebuilder Conference.

Although MDC has shied a way from spec inventory (the builder only has about 1,500 spec units on the books), Mizel admits that, in this climate, builders may be able to monitor that side of the market better. "The risk of a backlog home is, in some cases, greater than a spec home," Mizel said. "With a spec home, you know what the count is. In backlog, you know less about it because it usually has a sales or financing contingency."

To address the spec market, MDC is introducing a program called drywall hold. "We have a foundation hold and a drywall hold so the consumer can come in and fine tune what they want and how they want it," Mizel said.

The company is also changing its product line. "We're looking at developing a little bit larger product that we can maybe sell for a little less per square foot, which will be a better value to the consumer," Mizel said.

Cost savings are also a factor in MDC's redesigns. The company is looking to develop a repeatable formula to save on construction costs. "We're redesigning some of our product to make the lengths and the widths and the openings standardized," Mizel said.