THE VERTICAL — Weekly Brief

Where housing, money & tech collide

Author

Jake Heller
August 14, 2025

A QUICK SCAN

  • Lumber tariffs jump to ~35%: And a second tariff could be coming. Builders may want to lock in bids now before suppliers reprice.

  • Inflation warm, Fed still likely to cut Sept 17: But don’t bank on lower mortgage rates unless the Fed hints at more.

  • Lot supply loosest in 5 years: Nearly 400K lots are teed up for 2026 delivery, setting the stage for land grabs now.

  • Private builders go “pace over profit”: Incentives are back in force; margins are shrinking, but more active communities.

  • Opportunity Zones permanent: Stricter rules, but new rural perks could be the sleeper tax play of the decade.

  • AI is transforming property ops: JLL’s new Prism AI predicts tenant needs, spots warranty savings, and answers questions in plain English.

  • Luxury + AI meets Hollywood: Adriana Lima’s $15.995M Brentwood estate comes with facial recognition cameras, laser beams, and 24/7 AI-driven security.

  • PS: Scroll down for this week’s ChatGPT Prompt: it’s the exact framework to stress-test your next deal like a skeptical institutional investor.

1) Lumber costs are climbing

The U.S. just raised two sets of tariffs on Canadian lumber, bringing the total to ~35%. Another “national security” tariff could be added soon.

Why it matters: Lumber is a major cost in new home construction. Builders may see higher bids and shorter quote windows.
Tip: Review active budgets now and add a cost buffer for new deals.

2) Inflation & rates: what’s next

Prices rose slightly in July, but not enough to change the Fed’s plan for a September rate cut (most likely). Mortgage rates already reflect this cut, so don’t expect a big drop on announcement day.

Tip: Have targeted promotions ready if rates dip briefly, but don’t base deals on a big rate fall.

3) Lot supply is improving

Zonda’s Lot Supply Index rose to 68.4, the highest in five years. About 400,000 lots are in late stage development, expected to deliver in early 2026.

Tip: Lock up land positions now for delivery in the next 12–18 months.

4) Private builders choose “pace over profit”

July sales beat typical seasonal declines, driven by more incentives and modest price cuts. Margins dipped, but community counts stayed high.

Tip: Use incentives strategically (e.g., rate buydowns for payment focused buyers) and streamline operations to cut waste.

5) Opportunity Zones 2.0

OZ program is now permanent, but with stricter rules and fewer eligible areas starting in 2027. Rural zones get bigger tax perks, including larger basis boosts after 5 years and easier improvement requirements.

Tip: If you’re in an OZ now, confirm qualification after 2026. Explore rural OZs for new deals.

AI in Real Estate Spotlight

1. AI loan officer for 3,200+ brokers
Tidalwave + Bevri.ai’s SOLO platform talks to borrowers, answers questions, collects docs, and runs verifications automatically.
Why it matters: Faster approvals, lower origination costs, cleaner pre-approvals for builders/sellers.

2. Quantum computing could create a new CRE niche
JLL estimates commercialization in ~5 years. Quantum facilities need special infrastructure (shielding, vibration control, heavy utilities).
First hubs: Chicago, Boston, SoCal, Maryland, Colorado.

3. Appraisal “ChatGPT” arrives
True Footage + Restb.ai now assess property condition from photos automatically, saving hours, improving consistency, and meeting new GSE rules.

4. My 10 AI assistants built with Lindy.ai
Built no-code automations for permitting, lead finding, deal screening, investor follow up, cutting 10+ hours/week for <$100/month.

5. Big PE bet on mortgage tech
Centerbridge to buy MeridianLink for $2B, powers loan origination for 2,000+ community banks.

6. Fast moving PropTech headlines

  • Boxabl → $3.5B SPAC to scale modular housing

  • Snappt → $50M-backed Trigo acquisition to fight rental fraud

  • FHFA → Doubled Fannie/Freddie affordable housing cap to $2B

  • Lindy 3.0 → New “prompt-to-agent” automation builder

  • RealReports → AI property insights for 70K+ CA agents

7. JLL’s Prism AI for property management
Analyzes service requests, flags warranty coverage, pulls quick answers from building data in plain English. Cuts costs and improves tenant satisfaction.

8. EliseAI wins “PropTech AI Solution of the Year”
Automates 95%+ of leasing and resident lifecycle, from inquiries to renewals to maintenance.

9. Luxury + AI in Brentwood
Adriana Lima lists her $15.995M estate with AI-powered security: facial recognition, laser beams, and 24/7 coverage.

💬 ChatGPT Prompt of the Week

You are a skeptical institutional real estate investor reviewing my deal pitch. I will paste my acquisition summary, underwriting model, and business plan. Your job: rip it apart like you’re protecting your own capital. Identify every gap, weak assumption, and missing piece of evidence that would stop you from wiring money today. Rank these from most to least deal-breaking. Then, for each point, tell me exactly what data, proof, or adjustment would turn a “no” into a “yes.”

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  • Custom prompts for CRE & development

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Membership will be $10/month when we open shortly. Stay tuned for the sign up link.