Although the land may not exist in the physical world, early investors, celebrities, and even real estate agents buy into the metaverse. If you’re like most, buying and selling real estate that isn’t necessarily “real” is hard to comprehend and, in some cases, quite confusing. As the appeal grows for virtual reality and the interaction that comes with it, prices for “land” in this digital landscape have risen so rapidly that it’s impossible not to notice the potential in metaverse real estate investments.
Real estate sales in the metaverse exceeded $500 million
in 2021, and some investors are projecting over $1 billion in sales in 2022. With so much potentially at stake, metaverse real estate investment garners plenty of attention. Although the physical real estate market has enjoyed unprecedented growth in the past years, there is increased interest in the enormous possibilities of the metaverse.
Whether you’re curious about the metaverse or interested in making the most of an opportunity to invest in property, here are a few things to consider regarding the future of real estate and the metaverse.
What is the Metaverse?
The term “metaverse” doesn't refer to one specific type of platform or technology. Instead, the metaverse represents many possibilities concerning how we interact with social technologies. These include virtual reality — most often characterized by virtual worlds which exist continuously — and augmented reality, in which people experience a combination of physical and digital worlds.
Photo courtesy of CNET
Since its introduction in October 2021, Facebook’s new parent company Meta has heightened the public’s awareness and stirred intrigue in the metaverse. This technological marvel has been around for years, but more people engage with these virtual worlds and augmented realities with Facebook's announcement.
Additionally, there’s an economic element to the metaverse as well. Just like the physical world, users can create, buy, and sell various goods and services. Currently, most platforms have their own signature virtual identities, avatars, and inventories, but the future of the metaverse could allow you to create and use a persona across multiple platforms. The real estate market is just one of many areas of the metaverse which has benefited from the integration of virtual reality and the digital economy.
What is the metaverse real estate market?
There’s no doubt about it — the metaverse real estate market is booming by leaps and bounds. While there are only a few digital spaces in which investors can buy and sell real estate, the market for property for sale in the metaverse is appealing. For instance, there’s significantly less paperwork involved. In fact, there’s almost zero paperwork required in metaverse real estate transactions. Buyers use blockchain currencies — or cryptocurrencies — to buy land or other properties in the metaverse, so you’ll need some understanding of how these work to pursue metaverse real estate opportunities.
While the possibilities for economic growth in the metaverse aren’t clearly understood, the potential for serious gains — and losses — are fascinating. While the purpose of buying property in the metaverse isn’t as clearly defined as the physical world, real estate investors have the opportunity to either develop it or even lease it out to a third-party entity. Unlike the physical world, anyone can invest in metaverse property and land. Property comes in all shapes, sizes, and locations and is available on many platforms.
What is the future of real estate and the metaverse?
Unlike the physical real estate market, it is uncertain how investors will use the property for sale in the metaverse, especially since investments are still highly speculative. Most metaverse real estate transactions have occurred on four platforms: Decentraland, Sandbox, Somnium Space, and Crypto Voxels. While the market isn’t limited to these, property (or “parcels”) in these spaces seem to have the most increase in value. A property’s location in the metaverse can be just as important
as a location in the physical world.
Although the metaverse is expected to grow immensely in the coming years, it’s still a relatively new industry, and its stability and volatility require attention. For example, if a metaverse platform goes offline, any land or assets you own are potentially gone forever.
However, we’re still in the early stages of working with real estate in the metaverse, so this issue could be alleviated in the future. Its youth and open-source nature make the metaverse attractive for users looking for something they can take ownership of and control. As a result, the future could encourage the creation of more investment opportunities outside of real estate. Decentralization is a critical component of the metaverse — making the future digital landscape more accessible to all.
Do I need help from a real estate agent to purchase property in the metaverse?
Working with a real estate agent is critical to successfully navigating this brave new world of the metaverse real estate market. A realtor with a deeper understanding of these platforms and experience working with cryptocurrencies could be a tremendous asset, especially if your knowledge and experiences are limited. As the metaverse expands and more people become interested in the possibilities associated with metaverse real estate opportunities, the market will become even more complex and competitive, underscoring the need for an agent with this specialized knowledge. Our partners at ONE Sotheby’s International Realty are selling a real-world mansion through the metaverse. This is the first of its kind. The buyer will be able to acquire the same property in real life and in the metaverse.
This upcoming year promises to be an exciting time for metaverse real estate opportunities. When you’re ready to learn more about the metaverse real estate market or are interested in investing, please don’t hesitate to reach out to Magda Sarkissian, Lydia Sarkissian, or Bill Bullock - the Sarkissian Bullock Team at Golden Gate Sotheby’s International Realty. an agent at the Sarkissian Bullock Team
for expert guidance
*Header photo courtesy of TechCrunch