UPDATE: Davis Homes chief to start again

Norm Heikens
July 23, 2008
Back to TopCommentsE-mailPrintBookmark and Share
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.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

  2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

  3. I was just watching an AOW race from cleveland in 1997...in addition to the 65K for the race, there were more people in boats watching that race from the lake than were IndyCar fans watching the 2014 IndyCar season finale in the Fontana grandstands. Just sayin...That's some resurgence modern IndyCar has going. Almost profitable, nobody in the grandstands and TV ratings dropping 61% at some tracks in the series. Business model..."CRAZY" as said by a NASCAR track general manager. Yup, this thing is purring like a cat! Sponsors...send them your cash, pronto!!! LOL, not a chance.

  4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  5. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............