BAHAMAS REAL ESTATE PHILADELPHIA — The real estate market is hot.
It’s not just because of the surging prices for the most expensive homes in the country, or the influx of money from overseas.
It is also because of a new, unregulated virtual currency called bitcoin.
In some ways, bitcoin is more disruptive than real estate.
Its anonymous nature makes it easier to speculate on the market.
But as real estate values have gone up, so has bitcoin’s popularity.
The digital currency is now being traded in the thousands of real estate transactions a day.
And the number of bitcoin purchases has surged, rising more than 5,000% since the beginning of this year.
Bitcoin has been used to buy thousands of houses for more than two years.
This week, it was reported that more than 500 bitcoin were bought by buyers in New York City, a city that is one of the fastest-growing cities in the U.S. bitcoin has been gaining in popularity.
“There are hundreds of people in this world that want to buy and sell bitcoin and have never heard of it before,” said Andrew J. Krieger, co-founder of Kriegers real estate consultancy, in an interview with Bloomberg.
“I think that’s really a huge opportunity.”
Bitcoin is not the only cryptocurrency used to purchase real estate in Philadelphia.
In February, a $2 million home in Philadelphia was listed for sale for $3.5 million.
But a month later, a second home was listed with a price tag of $4.5-5 million and a $5.2 million price tag.
Both houses were purchased with bitcoin.
According to data from the Real Estate Board of Philadelphia, bitcoin was used in more than 40% of all transaction in the city last year.
The Philadelphia Real Estate Association said in a statement that the city has a strong digital-first policy, which requires a one-click process when purchasing and selling properties.
“This is just another step toward our mission to be a digital-forward city where we value innovation and create jobs for residents and visitors alike,” said Kevin Johnson, the organization’s president and CEO.
Johnson noted that bitcoin is being used to make real estate purchases in more places than ever before, including the District of Columbia, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Virginia, Washington, and Wisconsin.
“We are just seeing the first signs of the bitcoin phenomenon in real estate as a whole,” Johnson said.
Real estate is a growing business in the digital economy.
Since 2014, more than 1.3 million properties have been listed on Realtor.com.
The average price per square foot increased from $11,972 to $16,919 in the past three years, according to Realtors.com, a site that compiles data on listings and transactions.
But bitcoin’s rise is just the tip of the iceberg, said Kevin Saylor, who teaches real estate at the University of Maryland, College Park.
“The bitcoin market is a very exciting new trend,” he said.
“Its popularity is not only in the area of real-estate transactions but is also seen in the market for bitcoin as a way to transact with other businesses and to do it anonymously.”
The real-world example is a house in San Francisco, where the buyer paid $5,000 for a home that has a $1 million asking price.
But the price was $6.5.
The buyer then sold the home to a different buyer, who paid another $1,000, Saylor said.
The seller of the $2.5 Million house, a former employee of a tech startup, then purchased it for $7.5M, a price that was also $1.5MM.
“It’s really the most transparent market there is,” Saylor explained.
“And bitcoin has a lot of similarities to that.”
For now, it remains to be seen if bitcoin will replace real estate for real estate buyers.
However, its potential to provide a more convenient way to buy or sell property is an interesting trend.
“Real estate is the fastest growing market right now, and real estate companies are looking for ways to innovate to better serve the market,” said Jim Clements, a real estate broker at Clements Realty in Washington, D.C. “With bitcoin, I think there is a real opportunity for companies to do things that are more innovative.”