By Cory Schouten, The IBJ
cschouten@ibj.com
C.P. Morgan Communities, the most prolific builder in the Indianapolis area for a decade, plans to shut down for good tomorrow, another victim of the worst housing slump in a generation.
"This is one of the most difficult decisions I've ever had to make," owner Charles P. Morgan said in a statement. "With home prices dropping precipitously, resulting in millions of foreclosures, we believe our industry will be in trouble for many months to come. Unfortunately, I believe it's a crisis that will swallow up many companies like ours all across the nation."
The company, founded by Morgan in 1983, has built more than 25,000 homes in 200 communities in Indiana and North Carolina. The boom for C.P. Morgan began in earnest when in 1994 it launched a new home-building strategy anchored by its signature "more square feet for less money" promotion.
The loss of C.P. Morgan is a huge blow to the industry and the local economy, said Steve Lains, CEO of the Builders Association of Greater Indianapolis. Already, the housing downturn has claimed 22,500 central Indiana jobs, $89 million in local tax revenue and $1.1 billion in local spending, he said.
Lains said C.P. Morgan had in recent days been in talks with Pulte Homes Inc. of Michigan about taking over its operation-a move that could have saved jobs and prevented lots from being dumped onto the market. The deal apparently didn't materialize.
"It would be a very bad thing if they have to close shop," Lains said.
The company closed on about 2,600 homes in 2005, more than double its nearest competitor, according to data from IBJ's Book of Lists. In 2007, its output had fallen by half, to about 1,200 homes, which still put C.P. Morgan well ahead of Atlanta-based Beazer Homes USA Inc. as central Indiana's largest homebuilder. Data for 2008 is not yet available.
A nationwide slump in new-home construction appears to be worsening, as the government said today that sales fell 10.2 percent in January to a seasonally adjusted annual rate of 309,000-the worst showing since 1963.
C.P. Morgan isn't the first local victim of the slump. Davis Homes shut its doors July 2008, a victim of low demand and lower prices that made it tough to build at a profit. Los Angeles-based KB Home Inc. left the Indianapolis market in 2007.
All C.P. Morgan homes under construction have been completed, and applicable warranties will continue to be honored, the company said in a statement.
Phone calls to the company this morning were not answered.