Like our climate, there is no denying that South Florida’s real estate market has been scorching hot. But while South Florida is well known for its real estate booms and busts, the current cycle is also running right into the latest technological wave – cryptocurrency.
Home prices have climbed to record numbers. Those prices have been driven by a lack of supply but also by COVID related work and travel restrictions, which make year-round warm weather climates like South Florida very attractive.
At the same time, and while more people are staying at home to work, we have also seen a surge in cryptocurrency demand. At the time this is posted, Bitcoin is trading at prices greater than $65,000 and analysts are predicting that its price will rise higher by year’s end and beyond.
Miami is currently undergoing a tech boom of its own. This tech boom coincides with the ongoing and growing demand for cryptocurrency coupled with its unique geographic location. Miami has hosted, and will continue to host, numerous high profile cryptocurrency events. And with those high-profile events we will see more demand for our real estate.
All this to say, it is only a matter of time before using cryptocurrency to purchase real estate becomes routine. We are not there yet but that day is coming.
Opening potential real estate transactions to crypto holders broadens the pool of buyers that sellers can sell to. But doing so is not without risk.
Crypto is unregulated and prone to fraud. Crypto transactions may violate certain laws and regulations intending to govern “traditional” transactions. For instance, the anonymity associated with cryptocurrency may prove challenging when trying to trace the source of the funds which is often a requirement for a “traditional” real estate transaction. Additionally, given the volatile nature of the crypto price fluctuations it may be difficult to peg the actual sales price of the real estate until the “very last minute.” And then there are numerous tax implications associated with any crypto transaction that may further complicate a real estate transaction.
While there are numerous challenges in rendering a crypto transaction common place today, with the advent of Web 3.0, and the continued growth of cryptocurrency, it is only a matter of time before real estate transactions are routinely funded in this way.
And Miami, with its booming tech movement and thriving real estate market, will be at the forefront of this coming trend.