While buying land may be more profitable, it's surprisingly not that plentiful, even in this market. "You'd think for how bad things are that there would be a whole bunch of distressed land out there," Yearley says. "There haven't been as many of those opportunities in this downturn. Banks seem to be more patient with their borrowers, so builders are collectively looking for ways to diversify."
Diversifying means different things to different builders, but the ability to think outside the box when it comes to home building may determine who rides out this long housing depression and who gets bulldozed.