Non-fungible tokens (NFTs), the cryptocurrency phenomenon quickly materializing in a real world setting, are becoming harder and harder to ignore. Many industries have hopped on board.
What does this mean for the real estate market?
The metaverse, while online, is a universe of virtual space and digitized reality. The algorithm may only develop and adapt as we move into the future — and real estate transactions already occur on it.
The power of selling and creating in this digital world is possible — and it’s futuristic in a way which boarders on dystopian, but a trailblazing development, nonetheless. The end of 2021 saw new movements in NFT sales — Tokens, a blockchain tech company, bought half of Metaverse Group.
Metaverse Group is the world’s first virtual real estate company. Other sites like SuperWorld offer ways to purchase plots of real estate all over the globe — listing literally everywhere on Earth. For example, even the Taj Mahal — which is not actually for sale — is “listed” on the site. The creators are making a point of showing authentic real-life properties virtually to make an idealistic carbon copy of the original available in the digital realm.
In a property world which is all about location, location, location: virtual real estate allows access to all locations.
Real estate investment in the metaverse is a hot trend, but new and conjectural. Real estate is real, thus how may it exist on a nonexistent plane? The only ideas revolving around it are opinion based, and no one may say positively if today’s surging interest in virtual real estate investment is: “the new real estate boom or the next big bubble,” according to The New York Times.
To be or not to be real estate — digitally
The purchase of real estate is real whether one does it in credit, cash, or NFTs. The deeds are real, even though the virtual real estate process is not. When users buy digital real estate, the purchase stays on the blockchain while transfers send funds to the digital wallet. Titles for each individual plot of land exist, including proof of ownership. The only difference between real estate conducted virtually and through the real world is the use of cryptocurrency, which involves less paperwork.
Similar to video games where a person may use an avatar to explore, people may use their avatars in the metaverse to conduct work.
Real estate agents may use the digital world to show properties. Many potential homebuyers already property hunt online — thus, professionals conducting business in this realm need to familiarize themselves with it quickly to stay a step ahead of the trend. Anyone entering this territory also needs be wary of scams, but real estate professionals have an opportunity to help buyers and sellers navigate this new frontier safely by learning the signs of digital scams and staying well informed.
The real estate market post-pandemic is a mind field of price surges and spikes, pushing more interest in the burgeoning real estate/NFT market. The past seems broken after the trials of 2020-2021, and people are turning towards new and strange ideas to fix it.
As more and more idealistic individuals turn towards the abstract scope of the metaverse, one needs to beg the question: is the uncertainty of the ongoing pandemic and post-recession economy fueling the rapid shift towards digital realms? And if so, what happens when the asset markets return to “normal” activities?
Successful real estate professionals will be prepared for what’s down the line. The first step is to look ahead at what’s next for the digital real estate realm.
NFTs and the future of real estate
While NFTs belong to the ecosystem of cryptocurrency, artificial intelligence (AI) is essentially the ability for a computer or program to do human tasks which require human intelligence. A convergence between the two may be the next step.
In real estate, AI will impact home sales in a variety of ways, including:
- analyzing the value of similar properties in an area and adjusting an offer based on those calculations;
- guiding virtual tours; and
- producing an automated property report, according to Shore Agents.
NFTs also have the potential to impact mortgages. Borrowing may be possible through using NFTs which may have the potential to lower mortgage rates in the future.
This frontier is still new and full of scams and pitfalls — those looking to jump in headfirst need to proceed with caution. Consider watching The Matrix before making any life-changing professional decisions involving crypto and virtual real estate.
It’s all new, especially when trying to decipher which side of crypto will have any long-term potential. Stay educated, and if investment is the next step then try to only invest money which will be fine to lose completely. Crypto is the shiny new toy, but it’s best to not put all the eggs in one basket, especially looking at the potential for a crypto market crash. Real estate professionals, stay informed.