Not long ago, artificial intelligence was considered a headline-grabbing, yet futuristic and perhaps unreliable concept. Now, companies, including homebuilders, are increasingly leveraging AI in their day-to-day decision-making.
Oliver Alexander, Founder & CEO at Prophetic, an AI-driven platform that automates the initial land discovery and analysis process for developers and homebuilders, has seen this transition unfold first-hand in his own business, which he founded in 2024.
“The amount of engineers who are now comfortable using AI daily in their jobs is much different. Two years ago, it was ‘oh, that’s just hype stuff, and I don’t want to deal with that’, or ‘yeah, I’ve tried it, and it’s no good’, and they wrote it off. Well, now it’s very real, and it’s here to stay,” Alexander told HousingWire’s The Builder’s Daily.
Last November, Prophetic revealed that it had entered into an organization-wide, multi-year partnership with D.R. Horton. Getting a nod of approval from the nation’s largest homebuilder signaled that AI in homebuilding, particularly as it relates to land acquisition, could also be real and here to stay.
A rapidly accelerating AI environment
On Tuesday, Propehtic announced a new update to its SiteAI feature that produces automatic yield studies for parcels throughout the United States and delivers a zoning-compliant site plan for a potential development site within minutes.
Additionally, Acres, another AI platform, recently introduced an AI agent that helps land teams quickly evaluate zoning and entitlement requirements and potential development constraints.
Such innovations reflect a shift among homebuilders toward using AI to improve operational efficiency and evaluate land deals more quickly. Amid a tougher-than-expected spring selling season, marked by elevated incentives, compressed margins and the looming threat of increased construction costs, removing process time to gain efficiency has become a critical cost offset.
Practical tech solutions that subtract time and tedium also evolve in a rapidly accelerating AI environment. It’s now much cheaper for AI companies to run more experiments, allowing firms to test new ideas and experiment with strategies they once avoided because of financial risk.
“And then the models themselves, they’re of course getting much, much more intelligent. Even the flash models today…are very, very intelligent and better than what the pro models were a year or two years ago.”
Streamlining land acquisition
Prophetic aims to streamline the land discovery and analysis process by enabling firms to evaluate a parcel’s development potential and viability in just minutes.
The platform extracts key zoning requirements directly from municipal documents with cited sources. To keep requirements up to date, Prophetic reviews regulations for every municipality with more than 35,000 residents on a quarterly basis, and those under 35,000 twice a year.
Alexander acknowledged that some municipalities may not keep their zoning requirements current and that sometimes it may be difficult to track down all relevant documents. However, in his experience, this isn’t a major problem with sizable municipalities, especially those that have a lot of development activity.
“We don’t tend to find that that’s an insurmountable obstacle, but it can definitely be a couple of thorns in our side, spending a lot of time trying to get that one document that’s missing.”
Prophetic uses that zoning data to quickly generate buildable site plans to give land acquisition teams a visual and a reference point for how much density can be built on a particular site.
Users can also search parcels by development intent and criteria, and can view active subdivision projects, enabling developers to observe market trends and evaluate saturation points.
“We make sure that clients have the intel they need to make choices, so if you want to come build across the street [from an active subdivision], it’s crucial to know how well that project is performing.”
Another feature, DealDesk, acts as a land acquisition CRM that integrates every analysis, relationship and insight for any parcel into a centralized platform.
Amplifying human judgment
The new feature, dubbed SiteAI 3.0, produces an automatic yield study for each parcel. There’s a mathematical output that includes allowable unit counts, lot ratios, road footage, density per gross and net acre, wetlands requirements, and other information needed to determine whether to put a site under contract.
Before the update, users could generate a site plan within minutes, but those capabilities have noticeably improved with the new update, Alexander says. Prophetic now produces layouts that are both mathematically optimized and visually realistic, eliminating the awkward “honeycomb” lot designs that frustrated users in earlier versions.
The preliminary site plans are also more accurate now, with minimum lot-width and lot-depth incorporated into each site plan, and dimensions for each lot visible to users. Land acquisition teams, utilizing the new feature, also get insights into a site’s topography, including slope changes, flood zones and wetlands.
The goal, according to Alexander, isn’t to replace human judgment. Instead, it’s meant to amplify it. For example, users can verify and adjust site data to reflect real-world conditions observed in the field, such as disappeared wetlands, shifting rivers or dried-up ponds. Customers can also swap in regulations from nearby municipalities to test how a project could perform under different rules. This can be useful when developers are considering annexing a property into an adjacent municipality.
In that sense, Prophetic acts as a partner for land acquisition teams, instead of a replacement.
“Our goal is to always give you the information you need to make decisions, and then you, as the expert, can make those calls.”