“The Next Hot Housing Market Is Out of This World,” announces The New York Times. “It’s in the Metaverse.”
The metaverse is an online landscape, which people visit using their own digital twins. Metaverse real estate deals, says the Times in its recent article, happen on the blockchain — a “digitally distributed public ledger that eliminates the need for a third party like a bank.”
And The New York Times says other-worldly real estate markets stand to gain strongly in the years ahead.
Seven Bedrooms and a Green Gorilla?
Gabe Sierra, a construction pro, has a new listing. A seven-bedroom mansion with a pool in Miami.
But there’s more. A digital twin of the home, for one thing. And a giant, green gorilla that climbs the Miami skyscrapers — or rather, their replicas in the metaverse.
The virtual land cost $10,000. It’s in The Sandbox MetaverseTM, trademarked by Pixowl Mobile Games Studio. The Sandbox came on the scene early, and has solid metaverse street cred.
Sierra worked with Voxel Architects to create the home for the newly purchased, internet-based plot. Voxel has a knack for creating 3-D and augmented-reality homes. Sierra’s virtual mansion, Meta Residence One, would become part of a $10 million listing, together with the posh Miami mansion that’s its real-life double.
Zuckerberg and Snoop Dogg Walk Into a Bar…
Snoop Dogg is one of the best-known residents of The Sandbox. To get a prime location near the Snoopverse, a buyer paid nearly half a million for a piece of virtual real estate. Funny how that works. As in the real world, people want the most prestigious areas. Prices quickly rise where the action is.
The Sandbox has its own shopping districts, too. Record labels and sportswear companies have designed virtual places to see and be seen, to hold festivals, to host corporate meetings, and, of course, to sell merch.
Mark Zuckerberg changed Facebook’s name to Meta to show off the social media company’s metaverse ambitions. It was just the latest signal. According to Voxel:
In the coming years, not having a Metaverse strategy will be equivalent to not having a website nowadays.
Staking a claim to metaverse real estate, then, is no joke. In the Sandbox, virtual real estate investors are buying, renting out, and selling their metaverse residences.
Virtual Investments, Real Profits
Some metaverse projects have mapped the actual Earth. This enables people to buy places on a map that correspond to places they love, but could never buy in the real world.
The New York Times mentions an investor who owns various parts of a virtual Detroit in a metaverse known as Upland. But here’s the kicker. After beginning to resell virtual Detroit land last year, this investor is reporting a 10% return.
The Times talked to Mike O’Brien, head of Web3 and Digital Assets for Ernst & Young. O’Brien says investors do not face traditional property taxes in metaverse worlds.
That noted, digital real estate transactions involve cryptocurrencies (like ether, the coin of the Ethereum blockchain) as the key form of payment. And there are taxes on cryptocurrency gains during conversion to U.S. dollars. So aspiring metaverse investors should map out expected taxes before designing any green gorillas or snapping up land near the virtual Motown Museum.
Developers Are Now Making Model Homes in the Metaverse
If all of the above sounds just a bit too fanciful for your tastes, consider what might just be the most practical real estate use case for the metaverse era. Actual building companies are creating digital models of the homes and developments they’re bringing to market.
KB Home is a major U.S. developer. This year, it’s open for business in the metaverse world called Decentraland.
Home shoppers can tour the virtual models and use online tools to put the finishing touches on their future homes.
As The New York Times put it: “KB Home Buyers can swap out everything from countertop materials to overall architectural style.”
For real-world real estate companies, working in the metaverse is just the next step in the evolution of virtual home tours.
Supporting References
Debra Kamin for The New York Times: The Next Hot Housing Market Is Out of This World. It’s in the Metaverse (Feb. 19, 2023).
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Photo credit: Konstantinos Eleftheriadis, via Pexels.