How do cryptocurrency profits affect the real estate market?Informal report


Is there a bubble in the property market? Is the crypto party going to blow up?this Informal learning It’s interesting because it doesn’t come from the encrypted world. The author Rick Palacios Jr. is the research director of John Burns Real Estate Consulting. To say the least, the results are surprising. Especially considering how early we are. No matter which camp you are in, one thing is certain, cryptocurrency will become an important factor in the next decade. Maybe the whole century, even.

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Palacios Jr. first described the overall situation of the current situation:

“Low interest rates and a world full of liquidity have laid the foundation for today’s financial markets and asset value bubbles. As market participants, we wait and see with a moderate degree of nervousness. how long.”

Although the real estate market is on the rise, “this brief period of prosperity is unsustainable.” He hasn’t entered the rampant money printing his country is enduring, but we will. Inflation is one of the effects of all these inorganic dollars entering the market. Another effect is that people may subconsciously feel that their money is losing purchasing power and turning to hard assets. Before Bitcoin, real estate was the most difficult asset. It is logical that the newly printed money enters the real estate market and raises prices.

Informal survey and its surprising results

“Trying to measure the impact of the cryptocurrency and NFT boom on the real estate market.” To test his hypothesis, the researchers turned to Twitter. His question is, “Do you or someone you know use cryptocurrency and/or NFT profits to help pay for the down payment?” Within 72 hours, Palacios Jr. received 385 votes.

“To my surprise, 20% of respondents said yes, they did use crypto and/or NFT profits to help pay for the down payment. When I started the survey, my estimate would be less than 5%. If you Let me bet, maybe close to 1% or 2%. Yes, Twittersphere may know and use cryptocurrency/NFT better than the average adult, but it’s still 20%!”

If NewsBTC conducted this poll through our Twitter account, the high number would be somewhat surprising. However, Palacios Jr.’s audience is not an encrypted audience. His tweets are usually about the real estate market. Therefore, these numbers are excellent. What happened here?

BTC price chart for 11/25/2021 on Coinbase | Source: BTC/USD on TradingView.com

Conclusion on the housing market

After the investigation was over, Palacios Jr. turned to his contacts in the real estate industry. He found that “the percentage of homebuyers who voluntarily record encrypted accounts during mortgage underwriting has risen from almost 0% a year ago to between 5% and 10% today.” However, in the case of a down payment, “I interviewed Most lenders and builders who have ever estimated this percentage to be about 5% or less. Sometimes, 10% to 15% will be noticed, which means a higher price point and/or the community tends to be younger buyers who are more familiar with crypto .”

Therefore, this phenomenon is real. In addition, please take into account that “most home buyers will not disclose encrypted accounts because this is voluntary and not required.” In addition, there are still some stigmas associated with cryptocurrencies. In order to qualify for loans and obtain liquidation from real estate agencies, “Most homebuyers liquidate the encrypted proceeds before buying the house so that the funds appear “mature” during the underwriting period (usually staying in traditional checks or savings for two to three months) account ).”

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So, is there a bubble in the cryptocurrency and real estate market? They may well be, but we cannot be sure. The conclusion of this informal study is that the cryptocurrency market may be driving the growth of the real estate market. To what extent? This is a problem worth millions of dollars.

Featured Image by June on Unsplash - Charts by TradingView





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