PodcastNational Housing Market Outlook

Building Success: Doug Bauer and the Growth of Tri Pointe Homes

Dean Wehrli

Dean Wehrli

June 21, 2024

To grow or not to grow is often the question for a homebuilder. For Doug Bauer, CEO and co-founder of Tri Pointe Homes, the answer has always been “grow.” In 2009, when Doug Bauer and his partners started Tri Pointe, growth was a huge risk. But they pulled it off, and now Tri Pointe Homes is one of the top public homebuilders in the nation with a footprint across the country.

On the latest episode of the New Home Insights podcast, Doug Bauer shares some highlights of Tri Pointe’s growth over the years.

Featured guest

Doug Bauer, Chief Executive Officer, Tri Pointe Homes

The Tri Pointe story thus far

  • There have been a lot of changes since 2009 when “TRI Pointe” began and not just chilling out on the overcapitalization, which was a good call. They went public in 2013 and acquired Weyerhaeuser’s real estate arm the following year, absorbing huge land holdings and multiple builder brands in one big bite.
 
  • In 2021, Tri Pointe decided to collect the somewhat disparate group of local and regional homebuilders into the Tri Pointe brand and build that brand nationally. That decision has successfully created efficient operations and built a premium brand.
 
  • Still, Tri Pointe’s entrepreneurial environment allows each division a ton of autonomy. The goal, Doug says, is to provide the best of big and small—the capital and efficiency advantages of being a big public and the folks on the ground in touch with the local nuances.

How they see things

  • Recently, Tri Pointe has extended its footprint into more high-growth markets, including Salt Lake City, Orlando, and the Coastal Carolinas.
 
  • Of course, they look at the key indicators—growth, jobs, a friendly development environment—but Tri Pointe also gravitates toward markets where they can build communities for the long term and where the demographics fit their mostly move-up market niche.

How they do things

  • Tri Pointe is still mindful of sales pace and affordability. One of the ways the company battles rising prices and high mortgage rates is through the rate buydowns that have become so critical to the new home sector.
 
  • Doug sees the limited resale supply in most markets as a key to bolstering homebuilders’ outlooks.
 
  • Perhaps controversially, Doug does not view 7% mortgage rates as the boogeyman so many do. With Tri Pointe buyers usually armed with high incomes and solid equity to counter rates, the resale supply that higher rates sidelines makes seven percent seem like a sweet spot to Doug and Tri Pointe Homes. Doug and several builders echoed this sentiment at The Summit on May 14–15, our annual executive-focused housing conference in Laguna Beach, CA.

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About The Author

Dean Wehrli
Dean Wehrli
Principal
Dean helps housing sector clients figure out not just what might work and what might not, but why.

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