As if the current real estate boom wasn’t enough, the Covid pandemic is causing yet another unanticipated real estate boom. Many investors are indeed forking over millions of dollars for land — not in New York or Beverly Hills. The plots, in fact, do not exist in the real world.
As a result, the land is actually located online, in a collection of virtual worlds known as the “metaverse” by technologists. Facebook’s announcement that it was going all-in on virtual reality, even changing its corporate name to Meta Platforms, has resulted in a 500% increase in the price of plots.
Investing in metaverse real estate and non fungible token-related digital assets, CEO of Toronto-based Tokens.com Andrew Kiguel says, “The metaverse is the next iteration of social media.”
In Kiguel’s words: “A carnival, a music concert, a museum are all possibilities.”
As in a real-time multiplayer video game, avatars (cartoon-like characters) represent real people in these virtual worlds. Today, people can access these worlds through a normal computer screen, but Meta and other companies have a long-term vision of building 360-degree immersive worlds, which people will access through virtual reality goggles like Meta’s Oculus.
Crypto asset manager Grayscale recently released a report estimating that the digital world will soon be worth $1 trillion. Some of the biggest names in music have taken to the stage in the form of avatars, including Justin Bieber, Ariana Grande, and DJ Marshmello. Even Paris Hilton hosted a virtual New Year’s Eve party.
Decentraland, one of several popular metaverse worlds, recently saw a nearly $2.5 million investment from Kiguel’s company. Kiguel estimates that prices have risen by 400 to 500 percent in the last few months.
Janine Yorio’s virtual real estate development company spent $4.3 million on a parcel of virtual land in the Sandbox metaverse world. There are those who consider the digital world to be just as important as everything else in their lives.
Broker in real estate
Virtual private islands were sold for $15,000 each last year, Yorio tells CNBC. They are currently selling for $300,000 each, which happens to be the average price of a home in the United States,” she said.
A speculative bet
The digital world is as important as the real world for some people, says Miami-based real estate broker Oren Alexander to CNBC. “It’s not about what you and I believe in, but it’s about what the future does.”
Kiguel claims that in the metaverse, three things are as important as they are in the real world: location, location, and more location.
There are areas in the metaverse where people congregate, and those areas would be far more valuable than areas where no events are taking place, according to Kiguel.
There’s no doubt that the high volume of traffic in those areas attracts high-rollers
Think of the Monopoly board game as an analogy. Boardwalk and the surrounding area have been acquired by Kiguel, he announced. For advertisers and retailers, getting into places where people congregate is far more valuable. Someone recently paid $450,000 to be the next-door neighbour of Snoop Dogg, who is currently constructing a virtual mansion in Sandbox.
The CEO of the REPUBLIC OF REALM
Yorio agreed, saying, “I think it matters a lot who your neighbour is.” “Isn’t that the case with almost everything?” As in a club, you want to hang out with people who have similar interests to your own.
A developer or the platform itself can be used to buy land in virtual reality. Investors build on their land and make it interactive. In Yorio’s words, “You can decorate it, you can change it, and you can renovate.” This is code, you understand?
Digital real estate investments can be risky, according to Yorio
′′[It’s] extremely, extremely dangerous. Yorio tells CNBC that you should only invest money you’re willing to lose. In my opinion, it’s highly speculative. It’s also built on top of the blockchain. Moreover, as we all know, the value of cryptocurrency can fluctuate wildly at any given time. However, the rewards can be enormous.
Mark Stapp, an Arizona State University professor and director of real estate theory and practise, agrees. In this case, I wouldn’t risk money that I wasn’t willing to lose. Stapp says he has no intention of doing so. I don’t think it’s going to be a bubble if it keeps going like this. The product you’re purchasing doesn’t have any real-world connection to it.”