This housing downturn has been rough on a lot of people, and now another Indianapolis builder is falling victim to the slump. Davis Homes, a family owned builder established in 1985, has about 10 communities still in various stages of being complete. Most of the communities are going to be finished out by other builders, hopefully in similar quality as they assure on their web site.
Over the past few years, housing starts have continued to drop. The Indy Star reports that from 2005 to 2007, annual housing starts have dropped 45%.
One thing I can say for Davis Homes, is that if there is a “right way” to cease operations, they are doing it. From Davis Homes’ statement, “Unlike some companies that simply closed their doors, Davis has worked hard during the past few months to implement a plan to complete all the homes that were under construction and to pay homebuilding vendors and subcontractors. In addition, Davis invested in warranty insurance plans for all of its homes and homeowners to ensure that future warranty obligations will be met.” I feel like that is a very noble move on their part. They aren’t trying to burn bridges, they are not filing bankruptcy and they are not hanging their customers out to dry.
I remember when I first moved to Avon, people were starting to complain that the town was growing too quickly. There were too many new home subdivisions and too many homes on the market overall. They were even talking about not allowing any new home building for 6 months. Now, with housing starts way down, and a market where people aren’t moving unless they have to, we are starting to see the amount of inventory decreasing. As the inventory of homes available continues to decrease, the market will continue to “right size” itself, I believe. I don’t have my crystal ball with me today, but I feel optimistic about the number of homes available going down for once. Perhaps those old laws of supply and demand will have a chance to balance themselves better.
Read the Indy Star article here.
Read Davis Homes’ statement here.