Tri Pointe Homes Stock

Tri Pointe Homes, Inc. (Tri Pointe) engages in the design, construction and sale of innovative single-family attached and detached homes in 15 markets across ten states and the District of Columbia.

In September 2023, the company announced its expansion into the greater Salt Lake City region with the launch of a new division in Utah.

Strategy

The company's growth strategy is to capitalize on high demand in selected core markets with favorable population and employment growth as a result of proximity to job centers or primary transportation corridors.

Segments

The company operates through three segments: West Region, Central Region, and East Region.

West Region: Includes Arizona, California, Nevada and Washington.

Central Region: Includes Colorado and Texas.

East Region: Includes District of Columbia, Maryland, North Carolina, South Carolina and Virginia.

As of December 31, 2023, the company's operations consisted of 155 active selling communities and 31,960 lots owned or controlled. The company's construction expertise across an extensive product offering allows it flexibility to pursue a wide array of land acquisition opportunities and appeal to a broad range of potential homebuyers, including buyers of entry-level, move-up, luxury and active adult homes. As a result, the company builds across a variety of base sales price points, ranging from approximately $213,000 to $3.3 million, and home sizes, ranging from approximately 1,190 to 5,220 square feet. For the year ended December 31, 2023, the company delivered 5,274 homes.

Lots Owned or Controlled

As of December 31, 2023, the company owned or controlled, pursuant to land option contracts or purchase contracts, an aggregate of 31,960 lots, comprised of 59% lots owned and 41% lots controlled.

Community Development

In certain of its markets, the company typically develops community phases based upon projected sales, and it constructs homes in each phase whether or not they have been pre-sold.

Construction

Substantially all of the company's construction work is done by subcontractors with it acting as the general contractor. The company also enters into contracts as needed with design professionals and other service providers who are familiar with local market conditions and requirements.

Sales and Marketing

In connection with the sale and marketing of its homes, the company makes extensive use of online and offline advertising and other promotional activities, including digital paid search and display advertising, its website, print media advertisements, brochures, direct mail and the placement of signboards in the immediate areas of its developments. The company sells its homes through its own sales representatives and through independent real estate brokers. The company's in-house sales force typically works from sales offices located in model homes or sales hubs close to or in each community. Sales representatives assist potential homebuyers by providing them with basic floor plans, price information, development and construction timetables, tours of model homes, and the selection of structural options. Sales personnel are licensed, if applicable, by the real estate bodies in their respective markets, are trained by the company and generally have had prior experience selling new homes in the local market.

As of December 31, 2023, the company owned 502 model homes that were either completed or under construction, including seven homes in backlog. The company frequently builds model homes at its projects and has them professionally decorated to display design features. In addition, the company has invested in online sales solutions, such as virtual tours, online design studios and interactive floorplans, to allow homebuyers to tour its homes virtually rather than physically. The company's model homes and digital assets play a significant role in helping homebuyers understand the efficiencies and value provided by each floor plan type. Interior decorations vary among its models and is selected based upon the lifestyles of its homebuyers. Structural changes in design from the model homes are not generally permitted, but homebuyers may select various other optional construction and design amenities. In addition to model homes and its digital assets, homebuyers can gain an understanding of the various design features and options available to them using design studios. At each design studio, homebuyers can meet with a design consultant and are shown the included and upgraded selections available to them.

The company typically sells homes using sales contracts that include cash deposits by the purchasers. However, purchasers can generally cancel sales contracts and receive refunds of cash deposits if they are unable to sell their existing home or if they fail to qualify for financing. The company's inventory of completed and unsold production homes was 263 homes as of December 31, 2023.

Homebuyer Financing, Title, Escrow and Homeowners Insurance Services

The company seeks to assist its homebuyers in obtaining financing by arranging with mortgage lenders to offer qualified homebuyers a variety of financing options. Substantially all homebuyers utilize long-term mortgage financing to purchase a home and mortgage lenders will usually make loans only to qualified borrowers. The company's financial services operation (Tri Pointe Solutions) consists of mortgage financing operations (Tri Pointe Connect), its title and escrow services operations (Tri Pointe Assurance), and it property and casualty insurance agency operations (Tri Pointe Advantage). Tri Pointe Assurance provides title examinations for its homebuyers in the Carolinas and Colorado and both title examinations and escrow services for the company's homebuyers in Arizona, Texas, Maryland, Nevada and Virginia. Tri Pointe Assurance is a wholly owned subsidiary of Tri Pointe and acts as a title agency for First American Title Insurance Company. Tri Pointe Advantage is a wholly owned subsidiary of Tri Pointe and provides property and casualty agency services that help facilitate the closing process in all of the markets in which it operates. While Tri Pointe Connect was formed as a joint venture with an established mortgage lender and operated as such during the year ended December 31, 2023, effective February 1, 2024, the company acquired the minority interest in the joint venture, upon which Tri Pointe Connect became a wholly owned subsidiary of the company.

Seasonality

The company has experienced seasonal variations in its quarterly operating results and capital requirements. The company typically takes orders for more homes in the first half of the fiscal year than in the second half, which creates additional working capital requirements in the second and third quarters to build its inventories to satisfy the deliveries in the second half of the year (year ended December 31, 2023).

History

The company was founded in 2009. It was incorporated in 2015. The company was formerly known as TRI Pointe Group, Inc. and changed its name to Tri Pointe Homes, Inc. in 2021.