BUILDER has confirmed that the Reston, Va.-based builder has purchased more than 800 unfinished foreclosed lots in this market through a bankruptcy auction of assets that had been owned by former leading Indianapolis builder C.P. Morgan Communities, which shut down its business at the end of February.
A source knowledgeable about NVR’s operations called “essentially true” reports about this acquisition that appeared in the Indianapolis Star and on blogs of two local real estate agencies.
NVR is entering the Indianapolis market under its Ryan Homes brand. The builder has already started marketing homes in 10 communities in the suburbs of Franklin Township, Greenwood, Westfield, Noblesville, Decatur, and Brownsburg, Ind. NVR is also constructing its first models, which should be completed by January, this source stated.
The homes that NVR is marketing are in keeping with the company's strategy to be the low-priced builder in its active markets.
NVR's corporate Web site is showing homes in Indianapolis neighborhoods whose opening prices range from the $90s to the $130s. Michael Taylor, the owner of Red Door Real Estate, a local broker, says that Ryan’s pricing is below the starting price point of any other builder in this market.
NVR isn’t shy about stating its goals here. “Over time, we intend to become #1 in the hearts and minds of Indianapolis’ home buyers,” says the Web site that NVR has set up for its Indiana operations. The company has named Mike Mould market manager of its Indianapolis division, Doug Mosiniak its sales and marketing representative, and Tyler Kingdon its production manager.
NVR is entering an Indianapolis market where permits in its nine counties through August were off by 28% to 2,455, according to the BA of Greater Indianapolis. That figure compares to 4,564 permits for all of 2008 and 13,202 for 2005, the market’s most recent peak year.
Indianapolis’ top 13 builders are pulling three-quarters of its residential permits annually. On Tuesday, The Drees Co. held a grand opening for Stafford Place, its sixth community in the Indianapolis suburb of Carmel, Ind. “This is already a highly competitive production builder market,” says Steve Lains, executive director of the Indianapolis HBA.
Lains speculated that one advantage NVR might have is the price it paid for the lots it will build on, versus what its competitors paid in past years. (At presstime BUILDER was unable to ascertain what NVR paid at auction for C.P. Morgan’s lots.)
Despite the fact that existing home sales in August were off 13% from the same month a year ago, Taylor says that homes in certain areas of Indianapolis are selling “quite well, shockingly.” He attributes this demand to the impending cutoff of the federal tax credit for first-time buyers, which he says has created a sense of urgency among prospects. And while unsold inventory varies from community to community, Taylor points to Fishers, a bedroom community in Hamilton County, where there’s only a five-month supply of unsold new and existing homes available.
John Caulfield is a senior editor for BUILDER magazine.