Opinion: Proptech’s big miss – HousingWire

Key Takeaways:

– The value of residential real estate worldwide is approximately $200 trillion, with the US accounting for around 23% of this value.
– The residential proptech market is growing rapidly, with a focus on three main categories: making purchase possible/financing, transaction and process improvements, and post-purchase maintenance and value management.
– Category 2 (transaction and process improvements) is the most established, with many companies offering services in this area.
– Category 3 (post-purchase maintenance and value management) is somewhat established, but there is room for improvement.
– Category 1 (making purchase possible/financing) is the least established and has largely failed to expand homeownership.
– Traditional finance has been a barrier to expanding homeownership, with intransigent capital and a focus on optimizing shareholder value.
– Proptech entrepreneurs can combat intransigent capital by assisting small builders in creating more housing units, developing innovative financing options for first-time buyers, and creating shared equity models to break dependence on financial institutions.
– The impact of rectifying the proptech market’s miss is significant.


The value of all residential real estate worldwide is approximately $200 trillion. Of this, the U.S. accounts for approximately 23%. Every year, transaction volume in the U.S. exceeds $1.5 trillion. The numbers are staggering so it is no surprise that residential proptech is a heady market, capturing the imagination of entrepreneurs and institutions alike.

I’ve been involved in this area for about eight years and have the pleasure of advising several leading companies. As a marketer by profession, I tend to put these companies into categories to create a narrative and to develop brand specificity. In my framework, there are three broad buckets:

  1. Making purchase possible/financing
  2. Transaction and process improvements
  3. Post-purchase maintenance and value management

We can quibble on the words, but the spirit is clear. 

Of these, category 2 is the most established. There are hundreds of companies that help with various parts of the transaction and process “supply chain,” from search and valuation to closing, from appraisal to title, from targeting to closing. Some companies in this space are better than others, but overall, the industry can give itself at least an A- in this category. 

Category 3 is somewhat established. There are dozens of companies in this space, many of which are focused on helping existing homeowners extract cash from or make improvements to their houses. Very few are focused on maintenance and “preventative health,” but for the most part this category earns a B or B+.

Category 1 is a different beast. Like the Roman god Janus, it has two faces. On the one hand, finance in general is a very well-established category with data-driven rules and clear processes. Yes, it is plagued by bias — both historical and present — but it is a known quantity. 

On the other hand, traditional finance has absolutely failed to expand homeownership, which continues to hover in the 63-65% range with enormous discrepancies when cut by race and class. This area is a failure of proptech, abject to be sure.

Why is this the case? Intransigent capital is the clear answer and the usual suspect.

Economic nostrums abound and are constantly diluted by mindless repetition.  Principal among these are:

  1. Invested capital “requires” the highest return.
  2. Investors’ No. 1 job is to optimize shareholder value.
  3. Markets equilibrate risk and reward via the pricing mechanism.

For many, these ideas seem normative and obvious. But they all lead us into economic myopia and societal spirals. 

There is no pre-ordained “rule” for capital that suggests its owners must be as extractive as possible. If that were the case, the government itself could charge individuals and institutions a usurious amount for loans or for the creation of infrastructure. If that were the case, parents who front money to children for home purchases would do so at high interest rates. People can make different decisions. 

Shareholder value optimization is a mantra that serves to do little other than to glorify often brutal austerity. Over the long term, reducing the short-term return while creating profoundly larger and newer markets can be a very good decision. In addition, in the case of housing the externalities related to lack of homeownership militate against the commonweal.

Finally, anyone who thinks that pricing is really the result of a fine-grained process and not fetishism refuses to see the evidence from the decades of claptrap called modern economics.

So, with housing, what are some ideas for proptech entrepreneurs?

I am offering three ideas below but invite HousingWire readers to add more. I am humble enough to understand that the audience for this piece is far more capable than I am in developing ideas and creating value.

Three ideas to combat intransigent capital:

  1. Assist small builders in rapidly creating more housing units (potentially built offsite) to level prices and boost inventory.
  2. Optimize technology to create innovative financing options for first-time housing buyers at lower rates and prices, sacrificing per-unit economics for volume and community-building.
  3. Develop “community pools” and shared equity models to break the dependence on intransigent and predatory financial institutions.

The job is not easy, but the impact is enormous. Proptech’s big miss must be rectified, or the market is frankly just more of the same.

Romi Mahajan is the CEO of ExoFusion and president of KKM Group.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story:
Romi Mahajan at [email protected]

To contact the editor responsible for this story:
Sarah Wheeler at [email protected]

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Property Chomp’s Take:

is a key element in web development and design. It is a fundamental HTML tag that allows developers to create divisions or sections on a webpage. These divisions are used to structure and organize content, making it easier to style and manipulate.

In the context of residential real estate and proptech,

plays a crucial role in creating user-friendly and visually appealing websites and applications. It allows developers to separate different components of a webpage, such as headers, paragraphs, images, and links, making it easier to style and position them on the page.

When it comes to proptech,

can be used to categorize and present information about residential real estate in a user-friendly way. For example, developers can use

to create separate sections for property listings, financing options, transaction processes, and post-purchase maintenance. This helps users navigate through the information more easily and find what they are looking for.

In addition to structuring content,

is also crucial for applying CSS (Cascading Style Sheets) styles to different sections of a webpage. By assigning unique class or ID names to

elements, developers can target specific sections and apply custom styles to enhance the overall design and user experience.

is a versatile and powerful tool in the world of web development and design, especially in the realm of residential real estate and proptech. It allows developers to structure and organize content, apply custom styles, and create user-friendly interfaces. Without

, websites and applications would be less organized, less visually appealing, and less user-friendly. So next time you browse a real estate website or use a proptech application, remember the importance of the humble

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