Home sales are consistently up at M/I Homes, helping the Columbus, Ohio-based company come close to breaking even in 2009's third quarter. If it weren’t for $15 million of asset impairments and a $4.4 million charge for Chinese drywall, it would have lost just $1.2 million in the past three months.

The company booked a 36% increase in new contracts and increased its backlog by the same percentage in its third quarter compared with the year before. At the same time it decreased expenses by 19% from the same quarter in 2008, according to results released this week.

While those are good signs, CEO Robert Schottenstein was quick to say it’s not good enough. “While we are certainly pleased to see our loss narrowing, we are not where we want to be,” he told analysts during the company’s third-quarter investor call.

Schottenstein said the company’s “defensive strategy” is helping and credited adjustments to the company’s product line and adjustments toward offering more homes targeted for “first-time and value-oriented buyers” for some of the success. Its new “eco Series” unveiled in its Columbus and Cincinnati markets has attracted enough interest to persuade M/I to unroll the product line in other markets.

M/I, like other builders, is also on the hunt for bargain-priced land that it can build on for better margins than its high-priced legacy lots. It’s had some success in the Midwest, particularly in Chicago and the Cincinnati/Northern Kentucky areas, where builders have walked away from those markets during the downturn.

“That’s presented some opportunities for us,” said Schottenstein. “We capitalized on one of them, and we are looking at several others now.”

Still, good deals remain somewhat scarce, according to Schottenstein. “There are not a lot of deals out there," he said. "Certainly no one should infer these comments to suggest that there are a lot of those out there. They are few and far between.”

While M/I would prefer to do lot options, it has found the better deals to be cash sales of lots in bulk. Luckily for the Ohio-based builder, it should be in a position to capitalize on such opportunities; the company has nearly $103 million in cash on hand, a net debt to capital ratio of 23%, and no debt maturing until 2012.

Teresa Burney is a senior editor for BUILDER and BIG BUILDER magazines.

Learn more about markets featured in this article: Columbus, OH, Chicago, IL, Cincinnati, OH.