Pete Flint Founder of Trulia says it has never been a better time to invest in Real Estate technology.

Pete Flint tells Fortune Terms Sheet - There has never been a better time to invest in real estate start-up technologies. Flint was the founder of Trulia.

Trulia is an American online real estate marketplace that is a subsidiary of Zillow. It facilitates buyers and renters to find homes and neighborhoods across the United States and Canada through recommendations, local insights, and map overlays that offer details on a commute, schools, churches, and nearby businesses.

Pete Flint knows about bad timing. He founded one of the most popular online real estate marketplaces, Trulia, in 2005, just a few years before the onset of the financial crisis wrought by the massive bust in the housing market. About three years after the crisis, he managed to take his company public via an IPO, before merging it with Zillow in 2015. Now a general partner at early-stage VC firm NFX, Flint has a different perspective. And while the market today is nowhere near as dire as 2008, he says now is actually a good time to invest in real estate startups.??

As an investor, it’s a “tough sector, because you’re not only seeing the multiple compression on the tech side, but you’ve also seen a decrease in demand. …Transaction volume has come down” for housing, Flint told me recently at the New York Hilton Midtown hotel bar on the sidelines of a real estate conference. But, “The flip side is, it’s probably the single best time to be investing in real estate startups,” he argued.?

Flint’s reasoning is that, considering the rapid changes in the housing market in recent years, it’s creating new opportunities for “fast-moving startups to more effectively serve market participants in ways incumbents are unable to do.” He notes that while that’s true for all sectors when there’s a dislocation, housing transactions, in particular, have?dropped over 30% ?in the last year (through December), while interest in new startups that help boost revenue for agents and brokers is rapidly increasing. “It’s a lot of these B2B tooling [things],” notes Flint: “How can you help agents make more money?” (Flint also recently penned a sprawling think piece?on the future of real estate ?ownership.)?

Meanwhile, as mortgage rates?have risen in the last year ?(based on the latest estimates, the average 30-year fixed rate is?at 6.5% ), Flint says it’s creating an opportunity for startups and products that “can help lower the expense of managing or renting properties, or those that can reduce mortgage cost and complexity by tapping into people’s home equity.” Think startups like Tomo, which is focused on streamlining the mortgage approval process, and Hitch, which enables quick access to home equity—both NFX investments. Flint says roughly 50% of his focus at the firm is on proptech.?

The startups Flint is interested in now are “probably the opposite of what was interesting two years ago,” like low-margin businesses fueled by low-interest rates. Right now, in proptech, he’s looking for “cool technology, really hard to replicate the technology, really clever go-to-market,” and “high” operational efficiency.?

He also believes that as we continue to see what the post-pandemic landscape looks like for where we live and work, the new environment will create more opportunities for companies working on addressing the changes happening in commercial and residential real estate.?

Flint isn’t alone in thinking it’s prime time for disruption in the real estate market:?Last summer I wrote about ?why VCs think startups in the sector are hot, including how companies like Arrived, which enables fractional investing in real estate, have been picking up traction. And let’s not forget infamous WeWork founder Adam Neumann’s?new residential real estate endeavor, Flow , which was funded last year with a?whopping chunk of cash ?from Andreessen Horowitz.?

Despite its challenges, the mood in the real estate market now is definitely better than when Flint was building his own company. He recalls that during the financial crisis, “It felt like this was the worst time to be doing what I was doing. …That’s the sort of perspective that is helpful to offer: It did feel awful coming to work every day and your clients were going bankrupt [and] the headlines were saying, ‘real estate is going down.’”?

The housing market is currently?nowhere near as bad ?as it was back then—or even last fall, for that matter—but the proptech space still faces challenges. VC funding into proptech?dropped in 2022 ?after a boom in 2021, mirroring?most other sectors . Flint says that generally the seed stage (where NFX invests) was less affected by the slowdown and that NFX is “always” looking for and investing in proptech deals.?

But unlike other flashy parts of the tech landscape, Flint adds “It’s not like real estate is going to be superseded by some other technology. …It’s not like a smartphone,” which could be replaced “by some other wearable. It’s going to ebb and flow,” he notes.

Anne Sraders - Fortune Term Sheet.

Mark Borkowski is president of Mercantile Mergers & Acquisitions Corp