2024: Året for stigende boligsalg og krypto-interesse
Believe it or not, 2024 may be a popular year for homebuyers. The National Association of Realtors (NAR) recently predicted that home sales will begin to rise next year, with 4.71 million existing homes forecasted to be sold in 2024. According to NAR, this would represent a 13.5 percent increase in home sales compared to 2023.
Industry experts are also predicting that the price of Bitcoin will go up in the coming year. The increasing interest in real estate, coupled with a new bull run, may lead some to wonder whether or not they should purchase real estate using cryptocurrency.
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Buying real estate using cryptocurrency: A growing trend
Although buying a home with cryptocurrency may not yet be a common practice, some industry experts believe that this will be a trend in 2024 and beyond.
Natalie Karayaneva, founder and chief executive officer of Propy – a company that automates real estate transactions using blockchain technology – told Cryptonews that 11 percent of all homebuyers used cryptocurrency for down payments in 2021. Karayaneva mentioned that the 2021 bull run likely helped drive this interest. “Each bull run cycle will often result in a growing trend of people interested in buying real estate with cryptocurrency,” she remarked.
According to Karayaneva, Propy has processed thousands of transactions since the company’s inception in 2017. “Propy has surpassed $4 billion worth of volume on our blockchain network, handling millions of dollars in crypto payments,” she said. Karayaneva further believes that the first home sale conducted by Propy paved the way for other sales. She said:
“The first home sale conducted by Propy was wrapped as a non-fungible token (NFT) and bought within 5 minutes by a Gen Z, who paid ETH directly to a smart contract. Another sale was made using Bitcoin to Bitcoin, as the home seller wanted cryptocurrency.”
Unsurprisingly, the home buying process using cryptocurrency has evolved over time. For instance, Karayaneva explained there are now several steps involved when it comes to buying a home through Propy. She mentioned that interested buyers first need to register on the Propy platform, undergoing Know Your Customer (KYC) and Anti-Money Laundering (AML) verification processes. Users can then initiate a purchase by making a cryptocurrency transaction for the selected property. “Propy facilitates each transaction through its platform, allowing users to pay in various cryptocurrencies, utilizing third parties licensed for exchanging, or crypto-to-crypto facilitation,” Karayaneva explained. Propy then employs smart contracts to execute the transaction. “These contracts ensure the terms of the agreement between the buyer and seller are met. Propy Title – an escrow and title licensed company – executes on title search and transfer,” she added.
Upon successful completion of the transaction, the property title is recorded in the local county and put on the blockchain. Karayaneva added that transfer of title can be completed via an NFT process, which often requires a two week preparation for the seller.
Some platforms are also enabling crypto holders to purchase portions of real estate using stablecoins tied to the US Dollar. Jerry Chu, chief executive officer of Lofty AI – a real estate tokenization platform – told Cryptonews that all of the transactions on Lofty settle using the blockchain and USDC, which is a US Dollar pegged stablecoin. Chu believes that through this process there isn’t a strong shift from the traditional method of buying or selling real estate with fiat. “The shift is more so to using the dollar in a more efficient manner to enable a better transactional experience for these users,” he said.
Mortgages and insurance for crypto real estate transactions
As using cryptocurrency to purchase real estate gains traction, it’s also important to consider the role of mortgages and insurance.
Loans and mortgages play an important role for crypto holders wishing to purchase real estate, with options like traditional mortgages, smart loans, and leverage crypto loans available in the market. BitPay also offers a feature called “Bill Pay” that allows users to make mortgage payments with Bitcoin and other well performing cryptocurrencies.
In addition, regulatory uncertainty around digital assets in the US and other regions of the world will likely impact the process of buying real estate with cryptocurrency.
Advantages and disadvantages of using crypto to buy a home
There are both pros and cons to consider when using cryptocurrency to purchase real estate. Cryptocurrency payments enable global accessibility, allowing individuals across the globe to participate in real estate transactions. Faster transaction time, leveraging blockchain technology for security and transparency, and the diversification of investments are major benefits.
However, there are some disadvantages that may come about when deciding to purchase a home using cryptocurrency, such as unwillingness from sellers to accept crypto payments, price volatility, and regulatory uncertainty around digital assets.
Embracing a new era in real estate
Using cryptocurrency to purchase real estate will likely be a growing trend as interest in digital assets continues to increase. While platforms like Propy, BitPay and Lofty seem to be gaining traction, other options are becoming readily available. However, it’s important for potential home buyers to work with licensed crypto-friendly companies and always do their own research.
All things considered, using cryptocurrency to make home purchases is likely one of the best use cases for well performing cryptocurrencies, along with blockchain technology.
