One can easily argue that the current state of the economy is much more dire, than the environment of 2002-2003 which saw all time new high levels of liquidity and home ownership rates on the rise. Bubble markets get overbought from greed on the way up and they almost always end with over selling from fear on the way down.
Six more reasons why home prices may decline 20% further.

We saw here that there are home builders trading at huge discounts to their book values. Could some of these offer a chance to buy land at a big discount?

Currently, most home builders are trading well below book value. Could this be a buying opportunity? Here they are, ranked by biggest discount to book:

For companies like Microsoft and Accenture, book value won't help you figure out the intrinsic value of the company. But are there some companies out there where book value is an appropriate measure for intrinsic value? Consider land developers.

"Is NVR a baby being thrown out with the bathwater?"

I was looking at the front page of Value Investing News last night (October 17, 2007), and the New 52-Week Lows list jumped out at me. This list is packed with top quality companies, many of which have sustainable competitive advantages.

what is happening to the homebuilders and how to invest in them

Market Watch article on Tom McKissic and the TCW Focused Equities Fund. "The concentrated mutual fund distills the managers' best ideas into 35 companies that invite controversy, concern and capitulation. The portfolio is loaded with shares of home builders, retailers, energy producers and other companies that have fallen on hard times."

A Reuters article on the homebuilders. "There is still plenty of downside risk in housing but it may be time to start looking beyond the current slump."