"The economic crisis began in the housing sector and will likely end there," says Stephen Leeb. In his top-notch The Complete Investor he takes a contrary look at two homebuilders.

"Though my view may sound contrarian to a fault, a close look at the housing market, especially given recent government actions, suggests a recovery will happen sooner rather than later and be stronger rather than weaker.

"When home prices decline, buyers pull back, afraid of buying too soon. This leads to further declines and further buyer reluctance. No surprise, then, that housing starts have fallen dramatically.

"Meanwhile, consumers, who had been borrowing money based on the value of their homes, found this source of credit drying up, which dealt a further blow to the economy.

"It is a vicious circle indeed. Ultimately, though, it will almost certainly end with more willing lenders and a stronger housing market as the huge amounts of money being flooded into the system start boosting balance sheets of potential lenders.

"Pent-up demand plus population growth will ensure that would-be homeowners will be on hand eager to borrow. In addition, an enormous amount of investment money is on the sidelines waiting to buy real estate.

"The likely catalyst for the turnaround will be a clear sign that housing prices have stopped falling. And that shouldn’t be far off. As a result, housing-related stocks could be poised to lead the market.

"In the aftermath of the 1990-91 housing crash, leading homebuilders bottomed several months before housing starts bottomed—and soared about fivefold in 18 months. This time around, with so much sideline money waiting to get into real estate, the comeback could be far stronger.

"NVR (NYSE: NVR) and Toll Brothers (NYSE: TOL) has each emerged from the chaos totally intact, with high free cash flow yields and modest debt-to-equity ratios.

"NVR, the most conservative housing stock around, clearly is the less risky choice if housing continues to slump but offers less upside potential from an upturn than the slightly more leveraged and aggressive Toll.

"Indeed, Toll has been using the downturn as an opportunity to add to its land position. Also the company caters almost exclusively to higher-income buyers, who should be among the first to return to the market.

"The company’s potential has attracted the attention of a major Middle Eastern sovereign wealth fund, which reportedly owns nearly 5% of the stock. Over the next 18-24 months the stock could double."