Let's not forget the recent move from the low $20s. It will take time but this one should trade somewhat closer to peers as it continues to delever. If normalized earnings are around $3-4 per share (low teens ROE), P/BV should be around 1.2-1.4X--which still leaves some upside from here.
I don't care what it's peers are doing. ALL of the builders are trading way above their historical norms. The mania is alive and well at the moment.
The bad news is going to keep flowing all of this year. One bad report after another, from every builder, with all of them saying things are looking up going forward. The NAR, Builders, ANALysts, and Mortgage Brokers will spin like mad but sooner or later people are going to realize what is really happening. It might be after a few large builders have gone belly up, getting the fund managers on Wall Street fired for not being able to see the obvious. The subprime lenders are getting whacked right now, and deservedly so.