Find some stones. Look for ones that stand up and you can turn into a house. Then paint them with gesso or white paint. When the paint has dried draw with a pencil how you want the houses to look.

Paint the stones. This takes some patience because it's small. Use contrasting colors to get the best result.

This was in the middle of the painting process. Later I changed some colors and added a few more details to the houses.

When you're happy with how your houses look, cut out some cardboard and see how you want to place your stones. I used two pieces of cardboard and pasted them on top of each other to make them stronger. With a pencil draw how you want the street to look.

I painted some grass and added a road.

Then I added some pinecones and pasted the stones and pinecones to the cardboard. I also added a little dried twig and painted the seed holders to give the impression of twinkle lights.