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UPDATE: Davis Homes chief to start again

Norm Heikens
July 23, 2008
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The collapse of Davis Homes doesn't mean the Davis family will stop building houses altogether in the Indianapolis area.

Davis Homes CEO Brad Davis said today he plans to begin building custom and semi-custom houses before the end of the year. Davis said he plans to start on his native north side by tapping relationships with real estate agents who know of people looking to build.

"I thoroughly love homebuilding," said Davis, 47.

His comments followed an announcement earlier today that the company would fold after being decimated by a nasty market.

Davis Homes joined more than 30 homebuilders nationwide that have discontinued operations since 2007. The builder said it has secured warranty insurance so Davis homeowners will be covered. It also has arranged for regular maintenance and is looking for other homebuilders to complete its neighborhoods.

The company built more than 12,000 homes in more than 80 neighborhoods across central Indiana since it was founded in 1985.

Davis Homes was stung by the double whammy of low demand and lower prices that make it difficult to build at a profit.

The company's count of new-home permits had dropped 70 percent from 2004. The firm filed 15 permits in the first quarter, down from more than 80 during the same period last year. As of May, it had 30 employees, after shedding more than 170 workers since its peak in 2001.

Brad Davis said he expects only about 5,000 houses to be built in the Indianapolis area this year. The market began contracting in earnest last year after the region experienced a run of at least 13,000 annually since the late 1990s.

The market won't stage a comeback until at least 2010, Davis said, and even then the number of units will reach about 10,000 - nowhere near pre-downturn levels.

Davis said he had hoped to stick it out, but in the past couple of months began to realize that survival wasn't possible. Several real estate acquisitions in early 2006 loaded the company with financing that it couldn't continue to service.

"The market just kept getting worse and worse," he said.

No suppliers or subcontractors will lose money as a result of the shutdown, but Davis Homes investors will, Davis said. Those investors include his 75-year-old father, Charlie Davis. He wouldn't disclose names of the remaining investors.

"There really isn't any equity to speak of at this stage," Davis said. He declined to discuss what the company could have been sold for at the peak of the housing boom in 2005.

A new company to build custom and semi-custom houses probably will include Charlie as an investor, Brad Davis said.

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  1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

  3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

  4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

  5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

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