- 18 hours ago
In a conversation with HousingWire’s Zeb Lowe, Justin Baxley, chief product officer at Prophetic, discusses how AI and geospatial technology are transforming land acquisition for homebuilders. Baxley explains how whole-market land acquisition helps land teams move beyond reactive property searches, overcome fragmented data and build stronger acquisition pipelines. He also explores why human expertise remains essential to closing deals and how builders can use better market intelligence to prioritize investments, improve efficiency and navigate capital constraints heading into 2027.
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00:13From HWHQ, I'm Zeb Lowe, sitting in with Justin Baxley, the Chief Product Officer at Prophetic.
00:18Justin, thank you for joining me.
00:20For sure.
00:21Okay, so let's start with whole market acquisition.
00:23Can you explain that in terms that I would understand?
00:27Yeah, really, when we talk about whole market acquisition, what we're really talking about
00:30is kind of shifting the process on its head from this kind of very reactive parcel by parcel
00:35thing to this thing where you start to really look at the entire market and have it as something
00:39that you can really wrestle with the entirety of it.
00:42You could kind of think of it as that market is your oyster, so to speak.
00:46And some of that's about the volume of the market and how much you have to access, but
00:49a lot of it has to do with flipping the reactive versus proactive idea.
00:53I'm just going to hunt through that entire market and gather up enough that really I've
00:57got the entire market kind of as a basis for my projects.
01:01So is this something that's, is this a term?
01:03Is this an idea that's kind of always been around the industry?
01:05Is it more of a recent development that has caught up with the advances in technology?
01:09Well, I would say that I think it's like the idea as we talk about it is really sort of
01:13engaging, like people will master a market, right?
01:16And what that means is they kind of understand the conditions and the situations there.
01:19They know a lot about it locally.
01:21You know, I've got a cousin down in Southeast Texas, and he spent 20 years really mastering
01:25that market.
01:26And, but, but he kind of, he had to master the market.
01:28And at the end of the day, still, he doesn't have access to really the breadth of the data
01:32or the parcels available in his market, except for the stuff that he's encountered.
01:35He's gathered intelligence personally on.
01:36This is almost like giving an organization the ability.
01:39And it really is something that wasn't possible without the technology to say, I'm going
01:42to engage that whole market and everything in that market is going to be accessible
01:44to me.
01:45So that leads into my next question was that this parcel data has been public for decades,
01:50but, you know, from, in your opinion, why haven't land teams always, why haven't they
01:54always worked the whole market?
01:55Yeah, I think there's, there's a couple of reasons.
01:57So one of them is just, just math or physics, you might say, which is that a market's huge
02:02and all the data about the market is huge.
02:03And so if we just took the publicly accessible stuff, you're just talking about a tremendous
02:08volume of information.
02:09I mean, one, like we just say, like in any given market, the amount of parcels involved are
02:14pretty significant.
02:15Then you start to look at the utilities around that.
02:18You start to look at the, um, the zoning codes and those things, the way the zoning codes
02:22interpret is often a little bit unstructured.
02:23So you get this one that's like volume by itself would be hard.
02:26This is part of the reason why you sort of, you take good opportunities as they come to
02:29you and then you analyze them with a greater degree of intensity.
02:33But the second thing is, is that as, as you sort of start to wrestle with the data itself,
02:38some of the data is very unstructured.
02:41Like if you were to say like, I'm going to run a query or I'm going to explore something
02:44in a more technologically advanced way, you're going to say, that's great.
02:47Except that like, this is kind of room, room for interpretation.
02:50One of the ones we talk about a lot is just how many ways can you say single family attached
02:54in the United States?
02:55It's like a thousand ways.
02:57Actually, I think it's 9,000 ways.
02:58And so you go, that by itself would make it where you go like, this is just a trickier
03:02puzzle to crack open.
03:03Um, the public side of it is, is the other side of it about the public part is even though
03:08a lot of it's public, a lot of it's not, um, like the criteria might be public.
03:12So you take something like SB nine in California, where you say, well, everybody knows what the
03:16criteria are for a parcel that would qualify for this sort of affordable housing measure
03:21that, that they've done to create sort of exceptions around zoning.
03:23But you go, that's, that's public, but all the data criteria underneath it, you're going
03:27to have to hunt and dig and surface that stuff up.
03:30I know that other industries kind of have made this shift years ago.
03:34Why do you think that, uh, it's taken the land side a little bit longer and why is it,
03:41I mean, is it, why do you think it's taken so long to kind of make this shift, uh, in,
03:45in this particular industry and how much of that is, is really tied to technology?
03:50Is it also just a way of an evolving way of viewing the, the market?
03:55Yeah, I think, I think there's a couple of things.
03:56So often you'll get a industry and people want to kind of dog on that industry for being
04:00not as technology forward as they could be, or having not really embraced the full breadth
04:04of what technology could have done for them.
04:06There's a couple of things.
04:07One, I think this industry has embraced technology with a lot of enthusiasm, but the technology
04:11has been very fragmented as point solutions here, you know, things to help you here, here,
04:14here or there.
04:15And that, that just means like people were willing to embrace it when it was useful, but there
04:18wasn't necessarily a coherent picture.
04:20But the other thing is the technology really couldn't handle the kind of data that we have
04:24in this industry up until very recent times.
04:27I mean, just one, the volume of information about any given parcel, there's, there's easily
04:32a hundred questions that anybody's interested in at any given time.
04:34And they come from maybe 80 different sources.
04:36So there's a hundred questions across 80 sources.
04:38It's a pretty significant amount of sort of source work that has to happen.
04:42And then because it's kind of what we would call it in the technology world, we call it
04:45unstructured, right?
04:45Which just means it's a paragraph somewhere.
04:47We got to read the paragraph.
04:49Well, then how do you search the paragraph?
04:51Things like search engines could go through web pages and tell you what's relevant, but
04:54the idea that I could really condense it, get it down to the meaning and make that sort
04:57of normal or repeatable across a lot of different parcels, across a lot of different markets,
05:02across jurisdictions, the tech just couldn't keep up.
05:04And that's one of the things that's for all the sort of hype around AI, its ability to digest
05:09a massive amount of information and start to really pull out the parts that are the relevant
05:13questions that you need answered.
05:14That's something that we historically couldn't wrestle with.
05:16But the other part is geospatial data is just one of the even trickier ones.
05:21So if you start thinking about even the cool things we've all been watching technology
05:23do over the last three years, it's only in the recent so many months that some of the
05:27best really like geospatial geometric things have really come to full maturity.
05:32And I think we're probably not done there yet either.
05:34Yeah, I was reading an article just the other day and it surprised me.
05:38I come from the mortgage space and work with a lot of lenders and so like AI in that world
05:45and even on the real estate side, that's just all the talk for the last three years.
05:49But I was reading that all the verticals in the housing industry that the home building
05:56space has adopted or has a higher rate of adoption than any of the other sub-industries
06:02that make up the housing industry.
06:03Were you surprised like whenever you came into this space, given your background, were
06:08you surprised at the rate of like tech adoption or tech forward thinking?
06:12I think it can be very different.
06:14Like I always tell people tech adoption is a little bit tricky to talk about why do some
06:20people do it, some people not?
06:22Like why do some industries do it, why do some not?
06:24Sometimes there's like really concrete impediments, right?
06:25Like so we were talking about a second ago, the data that we want to consume and the questions
06:29we want to answer, the tech couldn't keep up.
06:31But the reality of it is, is that this is a very blended atmosphere.
06:36So there's one where there's these very obvious places the technology could help.
06:39And in those places, there's a place where you're going to watch different businesses
06:42pursue that with like a tremendous amount of enthusiasm, right?
06:44Where you just go like, I'm asking specific kinds of questions and the technology is really
06:49good at keeping that.
06:50You go, okay, cool.
06:51Well, they're going to, they're going to jump on those fast, but there's also a deeply
06:54artistic side, right?
06:55So when you start talking about like home building, a lot of times, whether you're talking
06:58like the closing process and somebody's going after like the buyer seller relationship, the
07:02art of the deal, so to speak, those are a little bit more sort of intuitive things.
07:06And I think that the enthusiasm for technology is going to be where they see value return.
07:10And that's the way you should buy technology.
07:11You should be trying to pursue adoption in places that's going to add real value.
07:14Right.
07:14So back to the working the whole market.
07:17What is, what does a land team look like or what, what are land teams doing differently
07:21when they're working the whole market?
07:23Yeah.
07:23So, so there's, there's one very different thing that we see when we, people are, people
07:26are really working the whole market is you can almost think of it as I'm, I'm going through
07:30this sort of discovery phase where I'm collecting and validating at a very rapid clip and I'm
07:35just creating this nice, neat little pile for me to come back to.
07:38And there's, there's two things that come out of that.
07:39One of them is rather than just sort of like working what you got, you're working this really
07:44rather luxurious pile of opportunities, whether you need them or not.
07:48And that's one of the things I think when we start to wrestle with this question, people
07:50who often say, well, what if I don't need a bunch of opportunities right now?
07:52It's great.
07:53Well, you've created your pile.
07:54You've got, it's, it's your buffet to work from when you're ready for it.
07:57Right.
07:57So that's the first thing that's real different.
07:58It's just accumulating a lot of really promising prospects into a nice, neat pile and knowing
08:03kind of where they sit.
08:05The second one is having a very structured way to process that over time, because historically it
08:10was kind of like, if you felt like working in a certain way and I felt like working
08:12in a certain way, we didn't really care.
08:14And if one of us left, we kind of lost the history behind that.
08:16So really applying a lot of structure and history around that so that if we're accumulating
08:21something from two or three years ago, and now that we're revisiting again, two or three
08:24years later, that we've got all the history of where we've worked at before.
08:28So that sort of structure thing is another important part.
08:30And the third thing that winds up being really different when you can work that volume of
08:33opportunities is this place where you sort of sit up and go, hang on a second, rather
08:37than just trying to find that one deal that's really going to work for what we're trying
08:40to accomplish, I'm really looking at three or four deals that all are good deals.
08:44And I'm choosing between the best of many opportunities, as opposed to really just trying
08:49to find something that's going to work for what we're trying to accomplish as a company.
08:52I think one of the things that comes up in these sort of conversations is, and as we move
08:56forward, the human element.
08:58Yeah.
08:58And so to what extent, or does this take the human out of the equation?
09:02Where does human fall?
09:03That's a great question.
09:05So it's, you know, a second ago, I brought up this idea of like things being sort of more
09:08artistic or scientific, right?
09:09The things that the technology is really good at and the things that the humans really
09:12bring some, some artistic element to it.
09:14And one of the ones I always bring up is at some point, somebody's got to close it.
09:17Yeah.
09:18And like, like a closer is a real personality type.
09:20And, and, and, and, and there's a ton of validation that takes to actually decide this
09:24is a good deal, but convincing somebody to actually sell you that property is a completely
09:28different adventure.
09:29Right.
09:29And there's a ton of psychology in that, that honestly, like, well, we can, we could codify
09:33all the factors that make somebody decide it's really time for our family to let go of
09:36this piece of property, but the human and the emotional element that convinces somebody
09:40to like see the vision.
09:43You know, one of the ones we've got is we've got a tool that's a yield tool and it figures
09:46out like, well, how, how many lots can I get onto that property or what kind of, uh, we
09:50just released another one for multifamily that tells you how many apartment units you could
09:53fit.
09:54And what we found was we had a lot of our, our clients that would say, you know what I
09:58use that for?
09:59And we're like, no, what do you use it for?
09:59Cause we thought this is a yield tool.
10:01The whole point is to figure out what you can get on the property.
10:03And I said, I show people what we could do with their place and the op, the vision for
10:08what we're trying to accomplish with it is enough to get some people over the edge.
10:11And you go, well, that's a human's going to figure that out.
10:14That the, the seller on the other side needs to see something really amazing coming out
10:19of this property that they're going to let go of that they may be had their own plans
10:21for.
10:21And that aspect.
10:22So the judgment that comes from a buyer analyst, the sort of psychological element that gets
10:27a deal across the line, that the person who can actually get the signature, like
10:30that's not going to go away anytime soon.
10:32And so the combination, like your, your, your goal there is just amplify that person.
10:35The ones who's a really excellent analyst, really excellent closer, give them tools to
10:39make them even better than they are today.
10:40This might be leading you into the next, into the next question, but like, as, uh, as this,
10:46uh, the ability to work the whole market becomes more and more available to, uh, to companies.
10:51Yeah.
10:52Where does the advantage come into play?
10:54Yeah, that's great.
10:55That's great.
10:56Yeah.
10:56Well, I think the humans, humans, a big part of that, right.
10:58Which is your people are really the ones who are going to get the deals across the line.
11:01The second part is really everybody has very distinct products.
11:05Um, and your product differentiation of what you're actually going to develop, like that's
11:09going to ultimately be the thing where you start to intersect with the people who are
11:12going to turn that into revenue for you.
11:13And the quality of your product is one of those things that all the technological advantages
11:16in the world aren't really going to affect anything if you don't have quality product
11:20in the end of the game.
11:21And so I think ultimately at some point we're really, we're really far upstream from that,
11:24but a lot of differentiation is going to happen on how are you meeting people who are actually
11:28buying your product?
11:29Um, and so I think those are probably two big ones.
11:32Do you start to wrestle with what are you actually giving to the market?
11:34And then the people in the team that you have to execute it.
11:37So I want to, uh, shift gears for, uh, my last question for you, which is, you know,
11:44last couple of years has been great from, uh, the market hasn't been great and, uh, things
11:49are looking even rougher now and for at least for the immediate future.
11:53So what, what would your advice be for leaders, you know, what to take steps to take immediately
12:00going on into the 2027?
12:02Yeah, I think there's a, there's a few thoughts.
12:04One of them that we've had a lot of conversations with business leaders through the years.
12:07And one of them is that when things get a little squirrely, it's real easy to all of
12:11a sudden completely give up on your long game.
12:13Right.
12:13And so a big example in this industry of that is, uh, we didn't really cultivate a lot of
12:17land people in the, you know, the beginning stages of my career, 2007, 2008, because
12:22we were like, well, how are we going to pull somebody in this market?
12:24It doesn't look like a real great place to be working right now.
12:26And now we have this kind of gap, whereas some people are about to retire and we didn't
12:29have really a good replacement.
12:30There's kind of a gap.
12:31So it's very important to think long-term.
12:33But the other thing that I think is always important to think about is when you're investing
12:36in your opportunities, your technology, your adoption, any of those things, the things
12:41that are good things to spend money on.
12:43And when, when the cotton's high, you know, when, when things are really good and going well,
12:47are the same things that make sense to do when things aren't well, you're really
12:50trying to reduce drag on your business, what are things that are costing me money, costing
12:52me time, you know, they're making my people less efficient.
12:55And what are the things that are going to surface opportunities that I'd miss out on?
12:58And then ultimately like one of the big ones, and it comes back to kind of what I was saying
13:01about that third leg of what really changes when somebody works the whole market is you
13:05have to make sure that you're getting the right deal across the line, which means you
13:08have to have actually more visibility.
13:10I was having a conversation with a guy last week and he was telling me about having worked
13:14this deal all the way to conclusion and he was missing one or two data elements.
13:17And he realized towards the end of the deal, he's probably going to miss, you know, a few
13:21million dollars in return on this investment because of a piece of data that he was missing.
13:26And you look at it and you go, okay, well, he was chasing that with a vision of what
13:29it was going to be.
13:30And let's say that you compare that to another piece of property and you've got the full
13:34vision of both pieces of property.
13:36So both parcels, you have all the questions you can answer, including the one that wound up
13:39biting him in the end.
13:40And you have a chance to compare the two and say, I get a higher return on this one.
13:43When things are tough, you may not have that many bullets to spend.
13:45You may not have that much capital to, to exercise.
13:47Pick whatever constraints you want.
13:49There's going to be some moment where you have to say, I need to pick the one that's
13:53going to deliver the most on the lowest output from me.
13:56Right.
13:56So I want the highest return on my investment because I don't have that much investment
13:58to throw at it because things are a little bit slow right now.
14:01And I think that's going to be the trick is finding the tools that give you the edge
14:05to not just, you know, increase your efficiency on the whole, you know, find the opportunities
14:10you would have missed in the first place.
14:11And then if I've got a few opportunities, but I've got a limited set of chances to play
14:15the game, how to play the one that's actually going to win.
14:18All right.
14:18So thank you so much for coming on and sharing some time with us.
14:29You