What I’m thinking about: Why land prices are moving faster than we’ve EVER seen them move…and the two rival scientists from the 1940s whose feud became my frame for navigating it.
Land is not supposed to move this fast.
Earlier this year we bought a rural Texas property at roughly $3K per acre (inclusive of some value-add work). Title issues dragged out the close, but the comps we ran through Q1 pointed to a reliable exit between $5.5K and $6K per acre…and conservative enough that listing at $7K per acre seemed reasonable given the property’s superior characteristics, and being close to the center of a local township.
We’ve cut steadily since. As of a week ago, we’re sitting at ~$4.2K per acre (there’s a serious lead expected to make an offer by end of month, after another lot she’s selling closes, but this is not a market we sit around waiting for ‘maybe, possibly’s’).
The read from our realtor (decades of local experience, sells more land in the area than anyone) was that everyone’s on summer vacation, and the buyers who shop for hunting characteristics (which our parcel allows for) only start their search in earnest in mid-to-late August.
Perhaps, but we’re not burning a season of carry on that rationale when price usually solves ~95%+ of any problem with a property…so I recently re-comped the whole thing from scratch.
If this exact parcel crossed my desk fresh today, I’d conservatively underwrite the exit closer to $4K per acre.
That’s a 20-30%+ swing in anticipated exit pricing in roughly two months, in an asset class that almost never moves that fast. (The realtor also noted that the market had shifted since we purchased).
What makes it sting more is that we’ve barely pulled the trigger on ANY deals this year…and one that made the cut is performing below our already conservative expectations. That’s how unforgiving this market is right now.
Even after a swing that dramatic, though, our basis, plus closing costs, still sits under the fresh-underwrite number. The profit lands smaller than modeled, but the downside protection built in at purchase is what’s expected to carry the deal through the fastest correction we’ve ever operated in.
The weak markets are pulling the strong ones down with them
Zoom out and this deal stops looking like an outlier. The buyer’s markets across the South and West are well documented (we’ve been navigating the most difficult real estate market in modern memory through ~4 years of plateaued bottom), but even the stronger sellers’ markets in the Midwest and Northeast keep compressing…when enough of the country softens, the strongholds get pulled toward the mean.
Roughly, orange/red indicates a seller’s market while blue indicates a buyer’s market. At the state level, 76% of states buyer’s markets as of July 2026 (data via Reventure.app)
Nationally, asking prices just logged their steepest annual decline since 2017 per Realtor.com, the eighth straight month of drops (there’s real nuance in how to interpret that data, which goes beyond the headline, and I’ll break it down next week).
Follow the Reventure data and you’ll see the human side too…owners who bought in the last ~3-5 years eating $100K+ losses on homes, investors and regular homeowners alike. It’s particularly painful for owners who bought after late 2021 at higher interest rates.
So our conservatism, already high, ratcheted up further. We value liquidity MORE than ever, and we’re tightening the buy box toward markets that are at least stable on Reventure home-price forecast, with sub-10% overvaluation rates (hard to find, as the map above makes clear).
If comp-level underwriting can be right at purchase and still watch the anticipated exit move 20-30% in two months, the margin of safety has to be further reinforced by local price forecasting (versus historical data, even from the recent past).
With a combination of macro-level data and anecdotal evidence, it’s hard to avoid a self-reinforcing cycle of second-guessing and ‘impending collapse’ predictions.
The wizard and the prophet
The frame I keep returning to for all of this came from a 600-page book I was never going to read cover to cover (The Wizard and the Prophet by Charles C. Mann). So I ran it through my ‘Learning Accelerator’ skill (after purchasing the ebook, of course) in Claude, which filters any non-fiction down to what actually applies to my business and life, and had the whole mental model inside a day.
The wizard is embodied by Norman Borlaug, father of the Green Revolution, credited with saving a billion lives through wheat engineering (with a Nobel Peace Prize to show for it). The wizard worldview says innovation breaks through any apparent limit…keep pushing, engineer more, the ceiling isn’t real.
The prophet is William Vogt, founder of modern carrying-capacity thinking. Limits are real, second-order effects are lurking, and the durable move is living within constraints rather than assuming them away.
Across a century of examples, neither worldview wins outright…each camp gets some things right and others spectacularly wrong. The synthesis is to take the win when innovation hands it to you, and price the second-order effects while you do.
Claude called out my bias
When I worked through the Learning Accelerator output (the skill is programmed to challenge me and the source content), it accurately pointed out that I’m a wizard on AI and technology…and a prophet on real estate underwriting (and personal finance, more generally).
On the AI side, it’s clear to anyone who’s been reading this newsletter for even a few issues that I am heavily in the optimist camp. Limits feel almost meaningless as this tech keeps improving, with physicist David Deutsch’s maxim as the backdrop, that problems are solvable (so long as nothing breaks the laws of physics).
Taking the win doesn’t mean ignoring the tab, though. The second-order effects of AI are stacking up in plain sight…a loneliness epidemic, slop flooding EVERY channel, atrophied critical thinking, and the growing issue of job displacement (more on this soon, I was at my brother’s wedding over the weekend, seeing it in my own extended family). We need to bank the productivity gains while keeping those costs squarely in view, and mitigate them wherever we can for the sake of the society we all live in.
Gain-of-function research is the sharpest analogy here (yes, the COVID lab-leak theory carries controversy, and settling the origin question isn’t the point). A wizard pursues research that could cure entire categories of disease, while a prophet asks what happens if it slips past the guardrails, a failure mode prophets were flagging long before 2020.
Whatever actually happened, the framework holds…pursue the breakthrough AND respect the tail risk.
The same split runs through my own week, often within the same hour…the wizard hat on while building our AI systems, the prophet hat on while underwriting dirt. It turns out you can hold both, you just have to know which one is driving in which domain.
What collapse forecasts get wrong (and what accurate ones share)
Holding both mindsets makes forecasting the interesting question, because doom has a terrible track record. The population bomb of the 1970s said humanity would outstrip its food supply…Borlaug’s wheat had other ideas. ‘Peak oil’ said the wells were running dry, yet the shale revolution made the US a net exporter of petroleum in September 2019, the first time since records began in 1949. Ray Dalio has been calling the collapse of the long-term debt cycle for at least ~10 years and counting.
The losing forecasts share a fingerprint…a single dominant mechanism, a current trend extrapolated straight to catastrophe, and an assumption that human behavior stays static. On that last one, the previous record for developing a vaccine was ~4 years (mumps), and the COVID mRNA vaccines shipped in ~11 months. Press humans against a hard constraint, and the historical base rates stop binding.
The winning forecasts run the opposite shape, with bounded scope, stable physical mechanisms (population momentum informing demographic trends, manufacturing learning curves like Moore’s law), and genuine humility on timing.
So when the trepidation creeps in (and in this market, it does), I check which kind of forecast my fear is making. “Real estate collapses indefinitely” has the loser’s fingerprint all over it.
My actual read is that we’re likely in this down cycle for LONGER rather than shorter…distress signals are building, which is exactly why we prize liquidity, yet foreclosures and delinquencies remain comparatively low versus prior downturns. That reads as a grind, and grinds reward the liquid and the patient.
As Taleb puts it, to make money you must first survive. Prophet rules on capital are what keep you alive long enough for the wizard bets to pay.
Betting on nanobots, still eating my vegetables
Ray Kurzweil predicts nanobots will patrol our bloodstreams within ~10 years and largely end human disease. Theoretically possible, and I’d love to see it, but you won’t catch me abandoning sleep, training, and nutrition on the bet. Fund the wizard’s upside while living by the prophet’s rules, in case the future runs late.
That’s how we’re running SLC through this correction…aggressively wizard on the AI systems compounding our speed, capability, and reach, while defiantly prophet on the underwriting protecting our capital. Take the win, and price the second-order effects while you do.
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If you’re an experienced operator with routine deal flow looking for a capital partner that stays disciplined, yet active, when markets move this fast, let’s talk. We write checks from $50K+, we close 100% of the deals we commit to, and our always-evolving underwriting capabilities are built for exactly this kind of correction.
