Photo: Zach Copley/Flickr
Cryptocurrency penetrated nearly every market in 2017, including real estate, despite its volatility. More and more home listings accepting Bitcoin are popping up, notably in California and Florida.
And just last month the cryptocraze came to NYC when a pair of Manhattan condos at 389 E. 89 were put in contract to sell using Bitcoin.
But given the highly risky nature of cryptocurrency and its massively fluctuating values, is it a smart idea to buy a home using Bitcoin in today’s housing market?
The short answer is a resounding maybe, according to a report released this week by the listing site PropertyShark.
To determine how sound an idea purchasing a home with Bitcoin is, PropertyShark set up a hypothetical sale using actress Demi Moore’s former $45 million luxury condo in the San Remo building.
The unit sold in April 2017 and PropertyShark calculated its monthly price tag in Bitcoin currency (BTC) for each month from the time of the sale through March 2018.
The results proved one real estate idiom to be true — timing is indeed everything.
If Demi’s pad had sold using Bitcoin, it would have taken about 37,000 BTC to have the bragging rights to live in the famous actress’ former home. At the time of sale, 1 BTC translated to $1,206 in USD.
However, just one month later, the condo’s sale price would have fallen to 24,000 BTC. Bitcoin’s value jumped to $1,895 in May 2017.
Bitcoin’s value trended upward through June 2017, before falling 4 percent. The price of the condo hovered around 17,000 BTC. And at the Bitcoin’s peak point in December 2017, when 1 BTC equaled $17,000, the condo’s price tag would have amounted to roughly 2,700 Bitcoin.
“In hindsight, the amount of Bitcoin that was needed to buy a $45 million condo in April 2017 could have landed you 13 condos by the end of the year,” PropertyShark says in the report.
Given the overall unpredictable nature of cryptocurrency, buying real estate with Bitcoin could either be a great deal or a very costly one.
“Trading in cryptocurrency requires in-depth knowledge of the business, not just speculation or luck. It’s safe to say that the technology is here to stay, although there’s a long road ahead for improvements,” PropertyShark cautions in the digital release.
But like it or not, some real estate developers think Bitcoin is here to stay — like Ben Shaoul, the developer of 389 E 89.
“Cryptocurrency has established itself as a force within the marketplace and it’s quickly showing no signs of stopping,” Shaoul told BuzzBuzzNews.
Click here to read the entire release.