Bitcoin’s rising popularity and price is starting to catch the attention of the real estate market. In November of 2017, a penthouse worth $3.5 million went up for sale in Miami Beach, one of the most popular luxury housing locations in Florida. What separates this property from several others is the announcement that the seller will be accepting payments made in Bitcoin and Ethereum.
Smooth Crypto Purchase
In September of 2017, Kuper Sotheby’s International Realty, a real estate brokerage firm in Texas, announced the completion of the first-ever property sale using Bitcoin. A broker associate of the realty firm, Sheryl Lowe, remarked that the process was unexpectedly smooth and was completed “in a matter of 10 minutes”. With the Miami condo going on sale just a couple months after, it seems as if other real estate brokers are also starting to indicate interest in accepting cryptocurrencies as an alternative method of payment.
Ever since its release, Bitcoin’s foundation has been laid down on the principles of decentralization and a general lack of authority. These characteristics have allowed the currency’s price to remain relatively the same around the world, except for some fringe cases where socioeconomic factors artificially limit availability. International buyers, who comprise a significant portion of the Miami housing market, can thus benefit from using cryptocurrencies as a payment method. After all, Bitcoin’s long-standing aim has been to do away with currency conversion problems usually encountered with cross-border transactions.
It is more likely that someone will use traditional fiat currency, and not Bitcoin or Ethereum, to purchase this Miami condo, however. In spite of that, the increasing adoption and willingness to accept cryptocurrencies might be the start of something new for both, the housing market and digital currencies.
Streamlining Integration into the Realty Market
The problem is that, in the case of both cryptocurrencies, their adoption in the housing market will not see an exponential increase unless the transaction process is more streamlined than it currently is. There is a whole range of accountability promises that cryptocurrencies fail to deliver, while traditional banks have managed to do so for years, either in the form of an escrow service or something similar.
Barring that, however, there is still the concern over the prices of digital currencies. For instance, in 2017 alone, Bitcoin saw a eight hundred percent jump in its price, while in the same time span, Ethereum became the second largest cryptocurrency by market cap. Given this volatility in prices, it is understandable that many people might not want to associate themselves with risks of this magnitude.
Real estate agents in Miami seem positive about the increasing rate of cryptocurrency adoption in the housing market. According to them, since usage of digital currencies are not banned in the United States, we will probably see an uptick in luxury house listings that can be bought using them. While logistically challenging to process, housing agents, like most other proponents of cryptocurrencies, believe that where there is a will, there is a way.