Anaheim, California
Adobe Stock Anaheim, California

As the Pacific Coast Builders Conference (PCBC) kicks off in less than a week, industry professionals are making their way to Anaheim, California, to learn, collaborate, and explore. From a Southern California’s builder’s perspective, there is a lot to compare notes on, according to Tom Grable, California Building Industry Association (CBIA) chairman and Tri Pointe Homes Orange County-Los Angeles division president.

“Our industry is a relationship industry,” Grable says. “Home building is a team sport, and no one does this alone. It is also an extremely competitive industry but very collegial one—there’s a lot of collaboration that goes on. As I like to say, 'we’re going to fight tooth and nail during the day, but we’re all friends after 5 p.m.' PCBC gives us three or four days where it’s all ‘after 5’ and we’re able to share ideas.”

From meaningful conversations with fellow builders and suppliers, manufacturers, trade partners, and consultants, to expansive educational tracks and insightful keynotes, Grable says that he always comes away with new ideas. And new, innovative ideas are desirable as the California home building industry navigates several challenges.

A Glimpse of the Landscape

What is fairing out to be a ‘pretty normal’ year with sales rates in Tri Pointe's communities going as expected, Grable says for the Southern California division’s absorption rates have somewhat normalized in terms of absorption on a monthly basis. He points to resale market options being limited as a reason behind the healthy sales.

“The new home market is kind of picking up the slack,” he says. “We’re able to sell homes because we just don’t have the competition from the resale market and needs-based buyers are still looking for homes.”

Tri Pointe—No. 18 on the 2024 Builder 100—is also able to offer buyers allowances, often referred to as incentives by other builders, to help buy down interest rates—an advantage the resale market doesn’t currently have. Grable also thinks people are becoming more comfortable with rates the way they are as long as they don’t get too far above 7%.

Yet, with the sales rolling as expected, the home builder is burning off lot inventory quickly which is lowering community counts in a lot of the Southern California submarkets, Grable says. “People are pushing to get product back in the ground, but there’s going to be a lull and community count is going to decline before it picks up again which is creating a pinch in supply,” he adds.

The top concern for Grable along with other builders is land. “The land acquisition market is very frothy. There’s a lot of activity and it’s very competitive. There are a lot of builders who are constrained so they’re frantically trying to restock their lot inventory. The problem is that everybody else is also doing the same thing so we’re fighting over a scarce commodity right now, specifically land that has a shorter lead time to bring to market.”

As the window closes for potential end-of-2025 deliveries, Grable says that some builders are moving focus to 2026 and beyond. While supply chain continues to have its challenges, he says it isn’t as big of a concern as the labor shortage they are facing. “A lot of our trade partners are challenged just bringing on employees to staff our jobs,” says Grable. “We need to attract more people faster in order to meet the demand.”

A 40-Year Challenge

With his CBIA chairman hat on, Grable says the Association is really placing the housing crisis where it actually resides. “We don’t have a housing crisis in terms of our ability to build homes. If we have the ability to build homes to meet the demands of the market, we can do that. We can solve supply chain issues. We will get labor to our sites,” he shares. “So really, we do not have a housing crisis. Instead, we have a housing policy crisis. One that’s been brewing for the last 40 years.”

While there has been good intentions, Grable says a lot of legislation that was created has artificially put a cap on supply. “It is coming to a head. A lot of bad housing policy at the state level as well as the local level is starting to manifest itself.” One area in particular being the push to develop into infill spaces and limiting the urban footprint.

“By constraining the urban footprint, there just aren’t enough opportunities in the infill space to satisfy the overall demand for housing, but also too, not everyone wants to live in those spaces. From a preference standpoint, most consumers would rather a more traditional home rather than being in a high rise, dense type of living environment,” he says.

In order to overcome these challenges, Grable says there needs to be a shift not only on a local level but a state and national level so that the cities can function and accommodate the ever-changing population. Regardless of the challenges, the resilient home building industry will persist.

Development Prevails

In the Inland Empire, Tri Pointe has a couple of larger developments underway including one with 188 home sites and another with 515. Both being former dairies within close proximity of each other, Grable says. Nearby in Ontario, there are another 120 sites. “We are doing a lot of concentration of housing in the Inland Empire in what’s called the dairy lands, which would be Chino and Ontario specifically.”

In addition to future sites, there are housing products available in Santa Clarita, including an age qualified 55+ active adult community within the home builder’s Skyline master plan. Grable says Tri Pointe is moving a little more into the active adult space and is developing more attached homes.

“We’re coming to a point where we're going to be building more attached homes, than single-family detached homes on an annual basis because it opens up more housing opportunities for first-time buyers,” he says. “We’re excited about expanding the types of products we’re doing and expanding different kinds of specialty markets.”

No matter the challenge or future product, Grable says even after almost 40 years in the business he can’t think of doing anything else. “We’re one of the only vocations that affects people’s lives on a daily basis. We create the spaces where people lay their heads down at night, where they get up in the morning, where they live their lives,” he concludes. “We consider it a privilege to do what we do.”