In the not too distant future, if someone were to ask, “How much did your home cost?” the answer would probably be, “18 bitcoins.” For that’s the going rate for an average American home in cryptocurrency, according to a recent analysis reported by Redfin.
Although most brokerage firms do not currently accept cryptocurrency as a form of payment, the report notes Redfin’s agents in cities across the U.S., especially California, have said they had conversations with people about using cryptocurrency as part of their transaction.
But is cryptocurrency set to become the payment of choice among homebuyers and sellers?
“It’s hard to say whether the use of cryptocurrency to buy and sell homes is a long-term trend or just a blip based on the recent spike in value,” said Nela Richardson, chief economist at Redfin.
While homebuyers and sellers seem optimistic about trading in bitcoins, the jury’s still out on this method of payment.
“I recently helped a client write an offer on a luxury home in Silicon Valley that was contingent on the sale of cryptocurrency,” said Carina Isentaeva, a Redfin agent in San Francisco, where a median home can cost 82 bitcoins. Though her buyer ended up backing out when his cryptocurrency didn’t sell, Isentaeva said she was confident that he would buy when it did.
On the other hand, Jeremy Paul, Isentaeva’s colleague in San Diego, recently worked with clients who cashed out two bitcoins valued at $7,435 each, to cover the closing costs on a home in Carlsbad, California.
For buyers who have made a lot of money on the recent surge in cryptocurrency value, buying a home in bitcoins is a reasonable way to use the proceeds. For sellers though, accepting bitcoin is riskier because accepting cryptocurrency as payment is a bet that it’s going to continue to increase in price.
“In some ways, cryptocurrency investors have just won the lottery, and so it makes perfect sense to use the proceeds to buy their dream home. On the other side of the ‘coin’, sellers probably wouldn’t accept lottery tickets as payment,” Richardson said.
For an analysis of median American home prices in bitcoins, click here.
In light of the new technology in an ever-changing digital world becoming a reality for the real estate industry, the inaugural Five Star Fintech Summit will convene on March 21 and 22, 2018 in Nashville Tennessee to address these changes. Speakers in the technology, operations, and mortgage industry will talk about the latest approaches to bringing financial technology into the forefront of consumers’ experience.The goal of this two day conference is to empower attendees and provide real benefit in terms of taking home actionable ideas and processes for their organizations.
Click here to register for the conference.