The U.S. housing market is booming as of late, largely due to the effects of the COVID-19 pandemic. Many people who previously lived in urban areas have left their small apartments for larger-sized homes and properties in suburban and rural areas, where they can work remotely and avoid the higher costs of city living. In turn, this has driven up the price of buying a home nationwide.
Now, for the first time ever, a real-life home in the city of Gulfport, Florida was just sold as an NFT. Yes, a physical home is being sold as a non-fungible token (commonly associated with digital assets!) Propy, a real estate tech startup, is working to revolutionize how people buy/sell houses and already has more NFT property listings in the works for Florida and the rest of the country. Starting now, people can turn their home into an NFT and they’ll be able to buy and sell property using cryptocurrency.
Let’s take a deep dive into what an NFT is and how a home is being sold as one.
What is an NFT?
NFTs are a hot topic and have taken the world by surprise. All of a sudden, tangible items like art, memorabilia, and more are becoming digital collectibles (and now, “digital” homes). At first, many people paid no attention and just deemed NFTs as a fad, but some have sold for millions of dollars. The point is, NFTs are here to stay and they aren’t going away.
An NFT, to be precise, stands for non-fungible token. To break this out further:
- Non-fungible is a term used to describe things like a piece of fine art, a rare collectible item, etc.- They aren’t interchangeable for other items because they have unique properties.
- Token, in this case, represents Ethereum, or ETH. ETH is the blockchain that backs NFTs and the most common cryptocurrency used to buy and sell NFTs.
If you’re curious to learn more about blockchain technology and the Ethereum blockchain itself, take a look here!
The First Ever NFT House Sold
A gorgeous 5 bedroom, 3.5 bathroom, 2,164 square foot home located at 6315 11th Avenue South, Gulfport, FL 33707 was auctioned off, and is the first-ever house sold as an NFT!
Here are some key points to understand:
- This is a first-ever, historic transaction for both the real estate and the blockchain industries.
- The home is a Florida-based investment property.
- The NFT itself = ownership rights and that will be stored in a crypto wallet.
- The sale happened via a blockchain auction and was paid for in ETH.
- The owner has full ownership of the home.
- The NFT itself is a DeFi (deregulated financial) asset, that can be borrowed against.
The home sold at auction for 210 ETH, at an estimated value of $654,309.60 USD. So the new owner now has rights to the physical property but also to a virtual non-fungible token representing this home. The idea behind this is to revolutionize the way the real estate industry works. Buying and selling real estate as NFTs via secure blockchains, in this case with ETH, is a much faster and more seamless process than traditional real estate transactions.
“We truly feel that we made history, both for the real estate industry and for the crypto community,” said Natalia Karayaneva, the CEO and founder of Propy, which managed the online auction and transaction.
This historic sale will likely set a new trend in the real estate world as people continue to adopt cryptocurrencies in their everyday lives.
Why Would Someone NFT Their Property
Here are two key reasons why someone selling their home might want to NFT their property:
- NFTs allow for seamless transactions with cryptocurrency: The interest in real estate from the crypto community comes from the common desire to easily and seamlessly transact using cryptocurrencies. An NFT-enabled sales process provides just that!
- Real estate as collectibles: NFTs have become popular especially when it relates to collectibles. The idea behind NFTing a home not only allows for easier transactions via cryptocurrencies but also creates a sort of “collectible home” or “trophy home.” When a home is located in a prime location, an NFT home is considered a status symbol. This is a growing trend and people with a lot of income are increasingly interested. Owning a “digital home” is becoming a point of pride, just as one might collect fine art.
The Bottom Line
The real world today increasingly involves this new reality of NFTs, which are growing at an accelerated pace every day. Buying and selling real estate as NFTs using cryptocurrencies is a trend that’s likely to catch on. Not only does it facilitate a faster transaction, but it revolutionizes the way in which real estate transactions take place. If you’re interested in “NFT-ing” your property, Propy has a form you can fill out here. And, if you’re interested in buying some cryptocurrency so you can buy an NFT house yourself, check out cryptocurrency exchanges like Coinbase and Gemini or a trading platform like Robinhood.