The real estate market is going through hard times, as it turned out. And this applies to many countries. However, to solve the problems that have arisen in this industry, the Web3 space comes to the rescue. And that’s how Web3 comes into play, using the example of the aggravation of the precarious situation in the US real estate market.
The main question that arises in any sector that has been built over decades, which has secured the definition of “traditional”, how the market will behave in front of blockchain technologies is whether, in this case, the real estate market will accept the technology that was called upon by this era to simplify many economic and not just questions.
Consider the real estate market situation in the United States, which can be a good example for any other country.
Housing prices are rising day by day for several reasons such as demand, speculation and lavish spending. If this trend continues, the US housing market will be on the brink of collapse, and eventually the entire industry could collapse. Most homeowners are staying put because of rising mortgage rates, which is creating a housing shortage. Statistics from the Federal National Mortgage Association, known as Fannie Mae, show that 92% of American homeowners consider their homes “somewhat affordable.”
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Be that as it may, the data shows that 69% of the population, consisting of both homeowners and renters, believe that affordable housing is becoming too difficult to find.
The emergence of Web3 business models revolving around NFTs, blockchain technology, and cryptocurrencies could be a suitable vehicle to address the situation that is currently plaguing the trillion-dollar US real estate market.
“Real estate, especially today, is expensive. Even if someone can get a mortgage, it often takes too much money for the down payment. The real estate process is also haunting as mortgages must be approved and the title process can take up to 60 days. Finally, there is not much liquidity in real estate. Therefore, sellers are likely to lose money if they want to quickly liquidate properties,” said Lofty Al CEO Jerry Chu.
How can Web3 solve real estate problems? Lofty AI is a tokenization platform created by Jerry Chu built on the Algorand blockchain and consists of several rental properties that investors can purchase for as little as $50:
“You can think of each property as your own mini-blockchain on the Algorand network. Assets, or unique tokens, are created for each property. The number of tokens is different depending on the value of the property”
This platform uses a shared ownership model. The documents for every property listed on the market are owned by a limited liability company. When investors buy tokens, they immediately become members of this company, which means that they own a percentage of the investment.
Loansnap , a platform for mortgage lenders, launched the Bacon Protocol mortgage exchange late last year. Web3 solutions will address many of the current challenges that homeowners and buyers face. Another notable player in tokenized real estate is Realt, which offers fractional real estate ownership across the US.
In fact, as Web3 evolves, many real estate companies around the world are actively exploring the services that space provides them and offering those services to their customers. Thus, the issue of introducing blockchain into the real estate industry around the world is only a matter of time, because all that remains for them is to respond to innovations.
