Bitcoin’s rising mainstream appeal is opening up innovative avenues for the housing market to entice a new type of customer, and other cryptocurrencies are starting to build momentum within the real estate industry. The industry is already trialling the use of digital currencies to pay for things like services, rent, services and sales deals.
Many businesses across the globe are now merchants that accept cryptocurrencies and the number is quickly growing.
There are already many news stories around of real estate agents and brokers accepting bitcoin as payment, and developers are also doing the same, with recent news headlines of a New York property developer accepting bitcoin for payment on a whole complex.
Blockchain and cryptocurrencies, although still in their early stages, have so much potential to change the way real estate is attained and traded.
The main potential change is when cryptocurrencies, like Bitcoin and Litecoin, become more widely accepted as a form of currency to conduct property transactions.
The main issue with buying property with cryptocurrencies, is that the market is highly volatile, meaning that in the time it takes for a sale to go through, the price could increase or decrease in value substantially. If you take a look at the3 average time it takes for a home sale to close, (lets say 50 days as an example) and we look at the bitcoin price from November-December last year.
Bitcoin’s price on 6th November 2017 was $7,300USD, and roughly 50 days later, it hit record highs of $19,783USD. Now in the grand scale of things, that’s a huge difference for both parties involved in the sale. So, the volatility of the currencies like this make it very difficult to lock in a guaranteed price on a sale, and when you’re talking median house prices of around $550,000, using cryptocurrencies can seriously impact an end price for a contract.
Although the volatility of cryptocurrencies will remain an issue for some time, the technology driving it however, is a completely different story. New technologies based on the blockchain technology, like smart contracts will be used in many ways throughout the industry to increase security and will significantly reduce the time of real estate transactions.
This tech will allow contracts to be immediate, as well as instantaneous fund transfers, saving the broker ridiculous amounts of time.