Life is a series of bets. We bet on dating and marriage. We bet on universities and jobs. We bet on diets and outfits.
And of course, we make the ultimate bet when it comes to finances. Real estate is generally considered a sound one.
However, that song of real estate is now being sung in a different tune.
But first, some contextual preamble. In less than a decade or two, the world, including the United States, has experienced historic changes in socioeconomics, politics, and healthcare. Amidst the good and bad, technological advancements have been the surfboard upon which civilization rides the rocky ebbs and flows of the real world.
Technology startups and corporations have made many into millionaires, and some, billionaires.
Computer programmers turn code into cash by writing applications, some of which have taken the world by storm. Social media giants have given rise to “influencers”, a non-traditional form of advertising. Leveraging virtual social networks, influencers turn views, likes, and shares into cash.
Code can turn almost anything into cash through the blockchain. A blockchain is a decentralized database.
Decentralization has its appeal among those who want to build and rebuild on their own terms. In 2008, the narrative of confidence in American real estate was replaced by fear and distrust. The cold hard truth was made evident: there are no such things as safe bets. Disenchanted by traditional institutions, public hope shifted towards modern, technology-based solutions.
Fractional real estate ownership and investing may forever change the narrative of real estate: it’s not about making safer bets, it’s about making smaller bets.
Why might it be the time to make smaller bets right now?
Bloomberg reports that commercial real estate is negatively affected by remote work. Office vacancy rates are on the rise, as buildings in even the swankiest of districts are either out of fashion, lacking the latest design features and functions, or recently built but partially empty due to the popularity of hybrid and remote work. Along with many employees who prefer remote work given the comforts of working at home, some employers are also enjoying the cost savings of not having to rent or buy office space.
JP Morgan finds that residential prices across the United States will experience regionally varied price drops in the near future. Homes may be either overvalued, moderately overvalued, or not overvalued, depending on what city they are in.
These uncertainties, in addition to rising costs of living, make it all the more difficult for many to justify owning property. The purchasing of a home or any property is one of the largest capital expenditures in one’s lifetime for most Americans. However, ownership of a RealT Real Estate Token is a realistically feasible alternative to owning a property in its entirety. Fractional ownership is real ownership of a percentage of a property, which can be tokenized on the blockchain.
Smaller bets on a decentralized platform may be the future of the real estate. Tokenization on the blockchain can offer buyers and sellers security, efficiency, and transparency, while fractional ownership can offer affordability and liquidity.
