In response to the Master Kass on our sister Web site, Street Insight, I feel compelled to update readers on my outlook for homebuilders and the housing market.I am not bullish on the housing market. I think one can get rich shorting New York City condos. I was not bullish last summer when I recommended KB Homes ( KBH), which is up 100% since. I fully expected the housing market to decline modestly in units for a few years. However, the shares were down, and cheap when I purchased them. They have been monster stocks since, short wreckers if you will. I liked the stocks, even with my negative outlook for housing. For sophisticated investors, the concept is called discounting. The builders were discounting a collapse in the housing market. Anything less negative, like a stronger market, would drive the shares higher. And that is exactly what happened. Also, there was the secular market-share-gain story of the large public builders. The best way to summarize this is to say that the big builders have a much higher share of developable building lots than deliveries. Even in a difficult market, I expected the large builders to hold revenue better than the industry. As for the housing market today, it's more frothy than this time last year. Personally, I will not purchase a piece of property until the Resolution Trust Corp. II in the next few years. If Greenspan had a clue (remember, he didn't have one in the tech bubble, or maybe he did), he would jawbone the banking industry to tighten or even strangle lending standards for residential real estate. He should not kill the entire economy to slow the real estate markets. Now that bag people can buy condos in Phoenix with no down payments, maybe the Fed should get involved. You can't expect mortgage bankers to do anything, they get paid to lend money.