Defying Bigger-Is-Better Odds, Davidson Eyes A Win In Dallas Entry

In homebuilding, as in life, rules were made to be broken. For example, the cost of money and a footrace against time plot a narrative portraying the big, national, public homebuilders as an unstoppable, market-share-devouring juggernaut.

In bold defiance, however, business strategists of well-led, highly efficient, and operationally excellent, privately-held exceptions may see the present as the ideal moment to strike on offense.

As the U.S. housing market navigates through an era defined by bumps, bruises, economic challenges, and shifting demographics, the entry of Huntsville, AL-based Davidson Homes into Dallas-Fort Worth, the nation’s top metro for new home construction and development in 2024, could potentially reset industry balances of power with its audacity and agility.

With a proven track record in San Antonio and Austin in 2023, Davidson Homes is once again leveraging an evolved and codified hybrid market-entry model that taps either M&A, spot land acquisition, or local talent recruitment for a de nova start-up with equal fluency and accelerated traction.

This approach allows Davidson Homes, a relatively small operator, to challenge the giants in a competitive market with over 30,000 home deliveries projected annually by the top ten homebuilders alone.

An Expansion Model Tailored for Dallas

Davidson Homes' expansion strategy into Dallas-Fort Worth is not a simple replication of its approach in other Texas markets. As CEO Brandon Jones explains to The Builder's Daily in a one-to-one conversation:

When we talked a year ago, our strategy was threefold: expand existing markets, make new market entries, and acquire builder assets strategically.”

Davidson Homes' Dallas entry represents the second of these pillars — a fresh, organic market entry — distinct from the company’s San Antonio entry, which drew on a mix of new land acquisition and the purchase of builder assets.

Jones emphasizes the importance of strategic local hires and existing relationships in facilitating a smoother entry into the Dallas market.

We hired a land acquisition person with strong local ties about a year ago – Norris Hodgin, VP of Land Acquisition & Development – and have since built some good relationships in the city,” Jones noted, adding that this strategic hire was crucial in acquiring the first parcels of land, resulting in the opening of Davidson’s first community, Waverly Estates.

A Lean, Efficient Operational Approach

In entering the Dallas-Fort Worth market, Davidson Homes has embraced a lean, SWAT-like operational approach designed to grow as revenue flows in.

We wanted to ensure that we could hit the ground running without building too much infrastructure,” Jones says.

Davidson Homes' Senior VP of Operations, Scott Page, elaborates on this approach, noting how it differs from the typical strategy of larger builders:

A lot of builders go into a new market and establish a bunch of overhead while still trying to gain traction within the market," Page says. "Our approach is different—we enter with a seasoned construction leader who brings knowledge of good trade partners in the market, and we leverage those relationships to move quickly and efficiently.”

This strategy has paid off, with the company quickly moving to acquire finished lots from other established builders like DR Horton and Pacesetter Homes. The acquisition of these lots enabled Davidson Homes to open Waverly Estates and Lake Park Villas, its first two communities in the Dallas area. Page highlights the efficiency of this approach

At Waverly Place, we built our first model in less than 30 days, and we’re going from our first start to a grand opening in 51 days," Page tells us. "This speed allows us to draw excitement to the community and gain momentum quickly.”

The Rarity of Privately-Held Builders Entering Dallas-Fort Worth

Davidson Homes’ entry into the Dallas-Fort Worth market is significant not just for its boldness and execution but also for its rarity. The Dallas-Fort Worth area is a market dominated by large, publicly traded homebuilders, making it uncommon for privately-held companies to establish a foothold.

Norris Hodgin, VP of Land Acquisition & Development at Davidson, emphasizes this point:

Right or wrong, there’s a positive bias among developers and land sellers for a new private builder entering the Dallas marketplace," Hodgin says. "It’s not something you see often, and it’s unique for Dallas that a private builder is taking on such an expansion.”

Hodgin’s extensive market experience has been pivotal in overcoming this challenge. With over 20 years in the Dallas area, including a long stint with Highland Homes, Hodgin’s deep relationships have been instrumental in securing land deals and establishing Davidson Homes as a credible player.

Adam Davidson’s Role in Establishing Credibility

A key factor in Davidson Homes’ success in breaking into the Dallas market has been the personal involvement of the company’s founder, Adam Davidson. Both Hodgin and Jones highlight how Davidson's presence and reputation played a pivotal role in establishing local credibility and seriousness around the market entry.

We had a gathering of developers in late Spring — a real grassroots event where developers met Adam Davidson and Brandon Jones. It’s proved beneficial, with several deals materializing directly from that meeting,” Hodgin says.

Brandon Jones echoes this sentiment, adding

Adam has done much of that work, meeting with trades and developers in person and building those relationships one-on-one. His involvement has been critical in telling the Davidson story in this market and establishing us as a credible player.”

These personal interactions have helped differentiate Davidson Homes from other market entrants, particularly in a larger, less personal corporation-dominated landscape.

Leveraging Local Relationships for Success

A key component of Davidson Homes' success in Dallas-Fort Worth has been its reliance on local relationships. Hodgin’s deep connections, along with Davidson’s personal involvement, have allowed the company to move swiftly and secure over 650 lots in various stages of development within months of entering the market.

We’re about six months ahead of our projections for 2024, and that’s all due to getting a big jump start on deals,” Hodgin remarks.

Scott Page adds that the company’s ability to establish strong relationships with local trade partners and vendors has been crucial in Davidson's market-entry success.

We don’t just want to be the builder of choice for homebuyers — we want to be the builder of choice for trades and vendors as well. By maintaining close, personal relationships with our trade partners, we ensure that we can execute quickly and with high quality,” Page explains.

Building Credibility in a Competitive Market

Despite being a relatively small player in a market dominated by giants, Davidson Homes has managed to carve out a space by building credibility among local trades, developers, and land sellers. This credibility is bolstered by the reputational impact of founder Adam Davidson and the seasoned leadership of Brandon Jones and Scott Page.

Our nimbleness allows us to outmaneuver larger builders. We can make decisions quickly, and if something doesn’t work, we can pivot instantly,” says Jones.

Page reinforces this sentiment, explaining how their lean approach contributes to their agility in the market.

We enter markets with minimal overhead, relying on existing knowledge and relationships. This allows us to move faster than larger builders who are often bogged down by bureaucracy,” he said.

This agility, combined with the company’s standardized processes and strong local leadership, positions Davidson Homes to thrive in the highly competitive Dallas-Fort Worth market.

The Path Forward

The next steps for Davidson Homes will involve scaling its operations – not just in Dallas, but in all eight of its operating arenas in the Southeast and Texas – while maintaining the nimbleness that has defined its success to date. As Jones puts it,

We don’t need to be the biggest, but we do need to be the best at what we do.”

With plans to control over 650 lots in the coming months and a clear strategy for growth, Davidson Homes is poised to make a significant impact in Dallas-Fort Worth, proving that size isn’t everything when it comes to success in the homebuilding industry.