Even though the role of the real estate industry in the global economy has changed over time, the factors influencing this market have remained the same. Demographics, interest rates, the economy, and government policies/subsidies have always affected the real estate industry and the various investments available to actual or potential buyers. Perhaps no one expected the virtual world would influence the real estate business as much as it has, but this is a trend we have certainly seen since late 2020.
The Business Of Virtual Real Estate
There are two ways to look at the virtual real estate business. First, there are digital solutions that help people shop for homes without visiting them in person. People can view and tour homes for sale online and even purchase them, expediting the time-consuming house hunting process. Shopping for homes online also means individuals get 24/7 access to different homes on the market, which helps them save time and cover more ground.
So far, virtual showings in the real estate business have been better received than initially thought. According to a recent survey of 836 home buyers, 57% of respondents said virtual showings of homes were better than they thought they would be. However, 94% of respondents indicated that sellers have an advantage over buyers in virtual showings. If virtual real estate is going to be a profitable business, some of these issues need to be resolved moving forward. That is because buying a home is one of the most important purchases someone can make, and finding the right home is crucial to people’s livelihoods.
No one wants to get the short end of the stick when buying a home, which can be the case with virtual home showings. Image and video quality can be misleading and crucial information can get lost in translation. That’s why many buyers use a mortgage broker when buying a home because they don’t want to miss any information when making important decisions. Mortgage brokers, such as Trussle, provide this safety and assurance by simplifying the process. They compare mortgage deals, teach people about buying a home, and ensure all buyers get the necessary information they need, such as how to get a mortgage in principle, to move through the home buying process. With virtual showings, it’s easy to get carried away and purchase a property during the same session.
Metaverse Real Estate
The virtual real estate business can also be looked at in terms of the Metaverse. In 2021, real estate sales on the four main Metaverse platforms topped $500 million, and investors and analysts forecast the Metaverse real estate market will grow at an annual CAGR of 31% between 2022 and 2028. Even though this market is still new, it’s already grabbing the attention of investors worldwide. Metaverse real estate refers to land parcels, or pixels, in virtual worlds representing a property worth real money. In 2021, a venture capitalist from Miami, alongside a group called the MetaCollective DAO, purchased 23 parcels in the blockchain-based virtual world The Sandbox. The price for these parcels reportedly started at around 1ETH, which equals about $3,000.
Like other areas of virtual real estate, if the Metaverse real estate market wants to develop into a legitimate investment, changes need to be made. For example, a Metaverse platform could fold since the market is still a developing field. If that happens, someone’s investment and property could disappear with it. Some investors may require more reassurance about this technology.
Technology has already changed the world so much, replacing retail stores with eCommerce platforms and now traditional real estate with virtual real estate. The virtual real estate market is on an upward trend, allowing prospective buyers to tour homes virtually, giving 24/7 access to what’s on the market, and even buying property in the Metaverse. However, like with retail, there are still advantages of doing things the old way, and in the case of the Metaverse, waiting until the technology becomes more legitimate.