According to Vista Point Advisors, the second quarter of 2025 reinforced PropTech’s central role in reshaping real estate, even as housing supply remained tight and transaction volumes lagged. Technology continued to push the industry forward, with AI tools, automation, and digital platforms driving efficiency gains across leasing, property management, and financing .

Market performance and deal flow

Venture capitalists put $292 million to work in Q2, favoring capital-efficient business models with recurring revenue and durable value creation. The biggest bets landed in mortgage automation, rental payments, AI-driven underwriting, and climate-aligned building technology .

M&A activity remained steady but subdued in size. Buyers favored small strategic acquisitions in AI leasing platforms, smart building technologies, and agent productivity tools. The gap between buyer and seller valuations kept larger deals on the sidelines .

On the public side, PropTech software companies lagged the broader market rebound. While the S&P 500 gained more than 10% and the Nasdaq nearly 17%, the PropTech index managed just 5% growth. Rate sensitivity and muted transaction activity weighed on valuations .

Housing and mortgage dynamics

Housing inventory remains a structural constraint. Newly listed homes fell from 813,000 in mid-2021 to just 559,000 in June 2025, despite higher population growth. That scarcity, combined with the lock-in effect, has kept existing-home sales under pressure, slipping 3.4% year-over-year to an annualized rate of 3.93 million in June .

At the same time, mortgage activity is showing resilience. Purchase originations jumped from $272 billion in Q1 to $367 billion in Q2, buoyed by spring demand and expectations of rate cuts later this year. Refinancing is also trending upward as borrowers look to capture better terms .

Technology themes to watch

Several innovations stood out in the report.

  • AI-led rent optimization is becoming mainstream, helping property managers balance occupancy with revenue.
  • Predictive maintenance powered by IoT is extending asset life while cutting costs.
  • Digital twins are moving from pilot to adoption, enabling real-time forecasting and management.
  • Sustainability is drawing investment in green materials and climate-aligned operating systems, pointing to longer-term shifts in development and asset management.
  • Tenant engagement platforms are gaining ground as landlords seek to differentiate properties through community features and integrated services .

Outlook

The second quarter highlighted two clear realities. First, PropTech is no longer a peripheral category—it’s where capital, innovation, and operational improvement converge. Second, the industry remains rate-sensitive and inventory-constrained, making capital efficiency and durable growth strategies more important than ever.

Narrow View

As you review the report, play close attention to the companies they include that shape their perspective. The majority of the report focuses on public companies. I was surprised to see ICE have a 13.2% revenue growth followed by CoStar at 10.7x and Zillow at 6.9X. Ice is the only company that is profitable. 

Most Acquisitive

Stone Point did 11 investments, Aquiline did 8. They included Compass in the analysis and included their broker purchases to tally 7 acquisitions. I found the inclusion of brokerages like Realty Austin and Latter and Blum as misplaced since those are not tech companies. LoneWolf tally was at 6 – but they counted trades that happened years ago like CloudCMA, Lion Desk, ZipLogix, and Teradatum. The same was true for Zillow who landed on the list with 5 and CoStar that landed on the list with 5. 

Anyway – all in all – an interesting report.