Buying with Bitcoin
With Bitcoin value jumping more than 183 percent in November alone, there’s no doubt that cryptocurrency is booming. But could it be a viable way to buy or sell a home?
Apparently, it already is.
Cashing in on cryptocurrency
As of Dec. 12, one Bitcoin was worth just under $17,000. And as the value of Bitcoin has grown in the past year, crypto-holders have started cashing out – and many are using that cash to buy real estate.
Several Redfin agents have already reported handling sales transactions with Bitcoin involved. San Diego agent Jeremy Paul, for example, recently had clients cash in two Bitcoins – for around $7,500 each – and use those funds to cover closing costs on their new California home.
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It’s likely agents will see more transactions like these in the coming months, too. Real estate offers a sound way to invest cash earned from cryptocurrency sales.
“For buyers who have made a lot of money on the recent surge in cryptocurrency value, buying a home is a reasonable way to use the proceeds,” Redfin reported.
Is selling for Bitcoin worth the risk?
Selling for Bitcoin is more tenuous than buying, as it’s essentially an investment in cryptocurrency itself.
“For sellers accepting Bitcoin,” Redfin reported, “it’s riskier because accepting cryptocurrency as payment is a bet that it’s going to continue to increase.”
Still, it seems sellers are willing to go out on a limb for crypto. According to Redfin, there are currently 75 listings on its site in which sellers will Bitcoin as payment.
Newsweek also recently reported that a Miami penthouse hit the market, listed at 33 Bitcoin. According to the publication, the seller refuses to accept any other form of payment for the home.
18 Bitcoin buys the average American home
According to Redfin, the average American home – which costs around $292K – would cost crypto-holders just 18 Bitcoin. In pricier markets, like Oakland and Orange County, California, it would run in 42 to 43 Bitcoins.
Buyers in St. Louis would need the least Bitcoin to buy a home in their area. For an average-priced home in the city – around $169,000 – they’d need 10 Bitcoin.
Despite the rising number of crypto-friendly real estate transactions in recent month, according to Nela Richardson, Redfin’s chief economist, it’s unclear whether the trend will continue for the long haul.
“It’s hard to say whether the use of cryptocurrency to buy and sell homes is a long-term trend or just a blip based on the recent spike in value,” Richardson said. “In some ways, cryptocurrency investors have just won the lottery, and so it makes perfect sense to buy their dream home. On the other side of the ‘coin,’ sellers probably wouldn’t accept lottery tickets as payment.”
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