We’ve heard about listing agents marketing luxury property with a bitcoin price tag and attracting lots of attention on the market — both from the media and overseas buyers. But will the digital currency on the rise go down as a fleeting fad or become a permanent way of doing business in real estate?
Redfin chief economist Nela Richardson, who in a recent report by the tech-powered, Seattle-based real estate brokerage described cryptocurrency investors riding the bitcoin rollercoaster as a bit like lottery winners right now, isn’t quite convinced one way or another yet.
Over the last year, bitcoin’s value has accelerated 180 percent from $5,870 USD on November 12 to $16,650 USD on December 12 — quite the upswing. It means a San Francisco home that in January 2016 would have cost a buyer 2,805 bitcoins would cost just 82 bitcoins today. The average American home, on the other hand, would cost 18 bitcoins by today’s value, according to Redfin’s calculations.
At the moment, bitcoin’s surging value is having two immediate effects on the housing market: more real estate clients are talking to their agents about the cryptocurrency (and accepting it as payment in transactions), and investors are using their bitcoin gains to snatch up property. To those who have won big so far on bitcoin, “it makes perfect sense to buy their dream home,” said Richardson. On the other side of the equation, however, sellers are unlikely to accept “lottery tickets as payment,” she noted.
The red-hot digital currency is nevertheless weaving its way into transactions, for better or worse. The report described the recent experiences of a couple of Redfin agents:
“Carina Isentaeva, a Redfin agent in San Francisco, recently helped a client write an offer on a luxury home in Silicon Valley that was contingent on the sale of cryptocurrency. The offer was accepted, but the buyer ended up backing out when his cryptocurrency didn’t sell. Isentaeva said she’s confident he will buy when it does.”
“Jeremy Paul, a Redfin agent in San Diego, also worked with clients who held bitcoin. He said his clients cashed out two bitcoins, valued at $7,435 each, to cover the closing costs on a home in Carlsbad, CA.”
Overall Redfin, which at this time does not accept cryptocurrency as payment, reported finding 75 listings nationwide (pulled from the local MLSs in markets that Redfin serves) in which the seller said he or she was willing to accept bitcoin. Real estate agents in Boston; Chicago; Houston; Philadelphia; Washington, D.C.; and several California cities told Redfin they had talked with both buyers and sellers about using cryptocurrency in a transaction.
As to whether bitcoin’s astronomical growth will go the way of gold, or a crypto-bubble — that’s still up in the air, the report said.