In this episode, the Reventure app has been integrated as mandatory due diligence for every deal Serious Land Capital funds, with Austin serving as the primary case study, a market that crashed 25% from its 2022 peak and remains 2.2% overvalued with an anticipated 5.5% further decline projected over the next 12 months. The analysis reveals buyer activity at record lows since 2013 (outside a brief pandemic blip), with Western US and Sunbelt sellers outnumbering buyers by 2X while even the strongest Midwest and Northeast markets only show 1.5X more buyers than sellers. The firm now systematically combines multiple Reventure data points to calculate precise exit discount requirements and avoid funding deals in overleveraged markets.
Key Takeaways:
- Add Overvaluation + Forecast for Exit Discount The firm adds the overvaluation percentage and 12-month home price forecast score together to determine the minimum exit discount required (e.g., Austin’s 2.2% overvaluation + 5.5% anticipated drop = 8% mandatory discount from current market value).
- 20%+ Overvaluation Demands Extreme Caution Markets showing 20-25% overvaluation require approximately 20% exit discounts even when 12-month forecasts show 4% appreciation, as affordability constraints create severe demand destruction regardless of bullish price projections.
- Days on Market Reveals Market Dysfunction Travis County’s 87 days on market represents the highest level on record and significantly exceeds the historical 70-day average, signaling that even discounted pricing may face extended hold periods in correction-phase markets.
- Birth-to-Death Ratio Predicts Long-Term Demand Austin’s 2.48 births per death (second only to Salt Lake City nationally) indicates sustainable organic growth and future buyer pools, while Gulf Coast Florida counties at 0.5 ratios face structural population decline that undermines long-term real estate fundamentals.
Listen to the full episode for the complete breakdown of how Serious Land Capital uses Reventure’s 50+ data points to systematically de-risk deals in the most brutal buyer’s market since the global financial crisis.
(Podcast transcript below)
Welcome to Get Serious, where at Serious Land Capital, we have successfully funded over $6 million worth of vacant land deals and have industry-leading 41 % operating margins. So today I wanted to read over the latest Serious News that came out titled, How We Spot 20 % Overvalued Markets.
If you’re not part of Serious News, you can sign up at siriusland.capital. It’s a free newsletter, shows up in your inbox just once a week. Pure value add, it’s our most highly positively regarded piece of content that we routinely put out here. It’s oftentimes guest posting on, or syndicated on REtipster.
Just FYI there, I talk more about the Reventure app in this article. I’ve mentioned that a few times on the podcast here, but in this article, I went in more depth. So I kind wanted to give a summarized version here as well as some insights on the market. So again, serious news, how we spot 20 % overvalued markets. What I’m thinking about, the widening gap.
between active buyers and sellers in the US real estate market. And notably, the absolute number of active buyers is the lowest on record. Data going back to 2013, this is from Redfin, outside of a tiny pandemic blip in early 2020.
So buyer activity has been on a downward trend for three straight years. And within the newsletter, I included the graphic from Redfin where you can see for yourself that buyer activity is at that lowest level when it’s just been a slanting downward slope with a widening gap between sellers.
Again, really indicating that this is the toughest buyer’s market, at least since the global financial crisis, GFC. So, you know, we should also point out that seller activity is also probably under-reported due to sellers sitting on the sidelines or pulling listings. You can see within the graphic, too, that the sellers…
even though there’s a widening gap between sellers and buyers, like the total number of sellers is also lower. Again, because a number of them are so concerned they’re not going to able to sell their property on the market or there’s some lock-in effect with mortgages that’s becoming less of a case here. I’m getting off track from the article. The Western US and Sunbelt markets, including my home city of Austin,
are seeing sellers outnumber buyers by around 2X. And to note, the stronger sellers markets in the Midwest and Northeast aren’t sporting 2X ratios in the reverse direction. In fact, they’re closer to roughly one and a half X in the best sellers market indicating there’s roughly 50 % more buyers than there are sellers.
in best sellers market in the country, which backs up the overall lack of buyers nationally since those ratios of sellers outnumbering buyers is more common and a larger delta. So all this being said, this isn’t subtle. This is as brutal as buyers markets get. while I’m certain they’re out there,
I’m not aware of any real estate investor who isn’t feeling the effects of this. With all of this in mind, and as we target higher value, more complex deals, our underwriting process continues to evolve to mitigate as much risk as possible. So how we’re using Revencher to avoid disasters. Every deal we fund now runs through the Revencher app.
We don’t have an affiliate relationship there. I just really liked their app and it’s now part of our standard due diligence. For context, Reventure pulls up-to-date Zillow data, government level data and proprietary analytics around real estate trends. Similar to land ID, you could find most of this data for free.
if you wanted to dig through multiple sources, but Reventure presents it in an easy to navigate layered solution. I won’t break down every single data point available, which there’s probably over 50 of them. Instead, I’ll focus on the handful we use most and how we’re applying them in practice. So the granularity for the data ranges from national to zip code level.
though not all zip codes are represented, due to lack of population or data reporting to build a reliable trend. And for the purposes of this podcast, we’ll use Travis County, which, incorporates Austin, Texas, again, my home city as the primary example here. So the Austin story, which is really a boom, a crash and a bottoming out.
So Austin was by most metrics the number one boom town during the COVID bull run. Then it suffered the worst crash in the country from real estate perspective, a 25 % drop in home values and counting since mid 2022. The city became a national punching bag and admittedly there were growing pains, but the market has nearly bottomed.
The city’s livability has improved and I’d still rather not be anywhere else in the world for roughly eight to nine months of the year. The long-term promise remains and I see Austin as one of the most technologically progressive cities in the world over the next 50 years, which is absolute catnip to a futurist like myself. The trend has been Silicon Valley designs it.
Austin implements it. At this point, I literally can’t drive more than 10 minutes without seeing a driverless Waymo on the road. And the shock value still hasn’t worn off. But short term, we’re still in a correction. So the first data point that I look at on Revencher is the home price forecast score.
this score projects anticipated average home values over the next 12 months. They have strong historical accuracy on this metric. You can read about their track record on Revengers website. I think lately, you know, they’re sporting a, positive correlation of at least a 0.7. So those of you who might not be familiar with statistics, like a perfect, correlation is a one.
It’s on a zero to one scale, no correlation is at zero. So really anytime you’re above 0.5, you can start indicating that there is a positive correlation with comparing two different variables. again, they’re right a little bit above 0.7, which they claim is leading the industry. I haven’t seen anything better, but of course you have to.
review that on your own. And in Travis County, this particular score is indicating that they’re expecting home prices to drop another five and a half percent over this next year, even after losing 25 % since the peak in mid 2022. And the second data point that I review is the overvaluation percentage.
So this compares average home values to local median incomes. And at the end of 2021 for reference, Travis County was 40 % overvalued, a truly stunning metric. Today with this larger crash, it’s now 2.2 % overvalued. So incomes increased, home values dropped.
the market is much closer to an equilibrium from that perspective. By comparison, Dallas, Fort Worth and Houston haven’t corrected as hard from a home value perspective as Austin or San Antonio, but they’re currently 15 to 20 % overvalued, which would tell me and our firm that we would use more caution in those markets before
considering investing there. And then as part of our own flavor here, how we combine those two numbers, the home price forecast score and the overvaluation percentage. know, while it’s not an exact science, we will add those two numbers together to determine how roughly conservative we should be with pricing and asset in that area. For Travis County, for example,
As noted again, they’re anticipating a five and a half percent drop in home values over the next year. And it’s still rated as 2.2 % overvalued currently. So we’ll add those, know, those are both negative scores, right? So we’re adding those two together. So we end up with 7.7%, you know, round up to 8 % of a discount baked into underwriting, which translates into, you know, if we were buying an asset in Travis County,
with a conservative anticipated 12 month hold, potentially longer, who knows what you’re looking at. We need to price our exit at least 8 % below that current market value to protect our downside. As another example, let’s say a county with home prices is expected to increase 4 % over the next year. It’s kind of building a premium in there, but it’s overvalued.
by 25%, which sounds huge, but that is surprisingly not uncommon across much of the US right now. Counties and areas around the country are still riding a…
you know, equity value increase across real estate assets post COVID boom. Again, that’s why we’re in such a deep buyer’s market at the moment. So in a particular case like that, you know, I would take that 25 % minus 4 % of the premium. And so then I’d want to be baking in roughly a 20 % exit discount from current market value due to the lack of affordability.
Um, so other data points that we’ll review on Reventure, again, not exhaustive, but, know, things that we’ll return to more often, uh, just looking at days on market. Um, so for example, Travis County currently averages 87 days on market, which is the highest on record. Um, and you can also compare the days on market DLM to the local historical average as well, which I think is closer to 70. Um,
I didn’t note that in the article, serving from memory here. We’ll also look at the volume of home sales and that is, you know, comparing the current throughput to historical averages or recent trends, for example, to gauge the market velocity. We’ll look at population growth, income growth, college degree rates.
because higher income and more highly educated populations tend to be more resilient in economic downturns. Plus, to an even greater degree than home buying, our typical land buyer demographic needs discretionary income to purchase luxury assets like land. Never forget that. Rental market data. For example, Austin’s rental market crashed alongside home prices.
but it’s now in the top five most affordable rental markets in the US, which is a complete flip from a few years ago. This is going to be more relevant to multifamily or PTR, bill to rent operators, but it’s worth noting that data is available. And a key one here is domestic migration. So Travis County, for example, lost.
13,500 citizens to domestic out migration in 2024. Many COVID boom towns have experienced domestic exodus and the population growth was propped up by international migration, but mostly due to federal policy shifts over 2025, to put a timestamp here, the net total inbound migration has reversed.
for the first time in at least 50 years. So, you know, regardless of your political flavor or opinions, the implications of this are certain to be felt in real estate as well as labor markets. Side note, most international immigrants are renters initially. Over time, they contribute to organic growth and become future home and land buyers. So have to keep that.
next point, which is related, is the birth to death ratio. So this is an excellent data point, more for long-term regional potential and anticipated real estate demand. and Austin, for example, Travis County, has a robust 2.48 births for every death. which is actually the second highest ratio in a major Metro in the U S outside of.
guess, Salt Lake City, which probably comes to the surprise of none of you all for obvious reasons. And you can compare this to many Florida counties, particularly along the Gulf, which attract older populations, but aren’t particularly friendly for young families. Several of those counties have birth to death ratios of around 0.5 or worse.
roughly meaning that for every one person being born, two people are dying. So, not sustainable for the local population. The last key data point that we’ll routinely look at is called a long-term growth score. So this is another proprietary venture metric indicating where home prices could be headed over the next five to 10 years, roughly.
based on underlying fundamentals. And Travis County has an above average score due to an educated population, strong organic growth and anticipated real estate appreciation, which is a good sign personally, since my wife and I had bought our home in Austin in late 2022, pretty much right at the peak of the market, but yeah, it’s what it is.
These data points, of course, don’t tell the full story. They relate to home prices, which correlate with land, but it’s certainly not a one-to-one. For example, these data points don’t discern between existing home sales and new builds, or even on a more granular level, the variance between different builder housing stock, like what is, for example, DR Horton or Linar.
adding to the local inventory, which, you know, that’s a key consideration for entitlement projects and major subdivisions in particular, as one intelligent land operator remarked to me recently. But reviewing Revencher’s market data certainly fills in a lot of gaps and in a market this brutal, you can’t be too careful. So.
Want funding from a fellow land operator who is constantly improving our best in class underwriting system with the profitable track record to back it up? You know, we write checks of at least $50,000 purchase price. We close 100 % of deals we commit to. And most importantly, we never give up. So let’s grow together. You can submit your deal at SeriousLand.Capital.
Looking forward to it. Everybody subscribe and share. I enjoyed this one. Leave a like if you you enjoyed this episode and help more folks find this as well. Take care now and bye.
