Cryptocurrencies Might Change The Real Estate Market
What exactly are Cryptocurrencies?
You’ll read or hear about Bitcoin and other Cryptocurrencies everywhere you turn. But what exactly is “Crypto”? Cryptocurrencies are digital or virtual currencies secured by cryptography. Encryption makes them impossible to counterfeit or double-spend. Cryptocurrencies store value and can be used as a means of payment, backed by a secure database of transactions known as Blockchain.
These two attributes (value storage and payment acceptance) work like any other currency. However, they are 100% digital, with no bills or coins and no backing from the Federal Reserve or Central Banks.
How does Cryptocurrency play a role in real estate?
You may not know it, but some highly publicized real estate transactions featured Cryptocurrencies. For example, in December 2021, a $22 Million Condo in Miami changed hands and became the most prominent known real estate transaction featuring digital currency. One of the advantages of dealing with Cryptocurrencies is precisely privacy. We live in a world where not all wealthy individuals have the freedom to move their money and invest. Rich people who want to invest in luxury real estate value their privacy. Cryptocurrencies’ freedom from financial authorities provides just that.
Will it become a trend outside of luxury real estate?
I can foresee that more and more transactions will close in Cryptocurrencies, especially in the Bay Area. Areas that attract international home buyers will see the transformation before others. The Bay Area attracts waves of foreign newcomers due to our superb educational, diversity, and business opportunities.
The Cal Agents experience
Recently, Nikki represented a seller and managed the sale of a $360,000, 1-bedroom condo in the East Bay. The home received multiple offers, and the seller had a list of buyers to choose. One had $240,000 cash on hand plus $120,000 in Ethereum.
While the seller had some excellent options to choose from, they had concerns about the value in Dollars of the Cryptocurrency portion and the volatility of Ethereum. In the end, the seller passed on this buyer’s offer and went with a safer choice. We can see that cryptocurrency impacts not only on high end luxury markets. There is a whole generation creating new wealth and benefiting from it. It will work its way into many aspects of real estate.
At The Cal Agents, we can assist in all real estate purchase transactions. Additionally, we have the expertise to facilitate any purchase in cash, Cryptocurrencies, or a combination.