Article published on December 12, 2022.

No wonder, most people are aware of blockchain because of cryptocurrency. But the scope of blockchain even goes beyond that of just being digital coins. While blockchain technology has been a recent addition in many industries, real estate isn’t left behind. The real estate market has been slow to adopt this new technology, but it doesn’t lack improvement.

Blockchain technology has the perfect potential to disrupt the traditional real estate sector by changing how people rent and buy properties in the future. Besides, real estate comes with unique problems that blockchain tends to resolve.

Continue reading the post to know more about how blockchain technology is changing the San Diego real estate industry significantly.

Real Estate and Blockchain Technology

Typically, blockchain is a unique kind of data system that store transactional records alongside maintaining decentralization, transparency, and encryption. You may think of it as information stored in the form of blocks. Besides, there is no single authority who is in charge of managing the information.

Additionally, it is difficult to modify or even upgrade information after it is stored on the blockchain. For every transaction in the blockchain, the system needs to verify the user through a digital signature. When it comes to real estate, the sector has been functioning offline for several years.

As such, all kinds of data regarding regulations, property details, and transactions are used to manage locally through several middlemen and institutions. However, this kind of offline module is not only lengthy but completely inefficient as well. That way, it discourages many potential investors to explore the industry.

Through blockchain technology, sellers can list their property’s digital shares on online platforms. The information from the seller is available through a database that anyone can have access to. When both the buyer and seller come in contact with each other and access information.

The information includes the identities of both parties, the valuation of the property, and other related information. They can enter into a smart contract if everything works in their favor. Regulations surrounding real estate transactions are already laid in the database.

After that, a smart contract gets issued to make the property salable. Finally, both parties can get themselves engaged in a transaction that is free from middlemen and secured from every aspect.

How Blockchain Technology is Used For Real Estate Transactions

The real estate industry integrated with blockchain technology takes people to a whole new world in digital currency.

1.  Automated Transactions

The different stages of the real estate transaction revolve around this intuitive technology for simplifying data transmission while lowering the time between the deed of sale before the notary and the preliminary sales agreement. It’s extremely interesting to know that it eliminates corruption and improves transparency.

Blockchain helps you visualize the status of deeds and properties while granting complete access to the land or property. The information can be accessed at any time without limitations from real estate agencies, banks, sellers, and buyers.

2. Creation of Smart Contracts for Real Estate

Blockchain offers unmatched speed through smart contracts that don’t need the intervention of any third parties. Although they are digitalized contracts, they are equivalent to paper contracts. But they allow both parties to secure the information contained within and prevent further modifications.

Most smart contracts work in the automation of value exchanges in terms of virtual currencies. And, the accounting entries associated with the exchange of digital assets are recorded automatically in the blockchain. Also, the transfers are immutable and visible. The conditions described in the smart contracts don’t leave any room for interpretation prevalent in daily transactions.

Tokenized Real Estate Options on the Blockchain

With the advent of blockchain technology, assets can be customized and tokenized to meet legal compliance, distributions, transferability of ownership, and so on. The tokenization of properties opens the gates to real estate transactions and makes them happen digitally. The system eliminates the need for both sellers and buyers to interact in person.

By using blockchain technology, people can trade real estate assets in the same way as they do when trading stocks. As such, anyone can trade properties of small units, especially since the system works wonders for common people. Intuitive technology is important when it comes to changing the perception of real estate investments.

In addition, the technology eliminates the need for property agents, government officials, the enforceability of law, and so on. Because of that, the transactions are completed in no time. This intuitive technology enabled an effective and easy way of investing especially in San Diego real estate.

Blockchain technology has empowered several investors who can sell and buy property on their terms by accessing a database without the need to seek help from intermediaries. This new technology revolutionizes the way people looked at the real estate market and helps investors take advantage of this profitable sector.

The Future of Cryptocurrency and the US Real Estate Market

There is no denying that there has been an increase in people buying luxury goods using digital assets and real estate isn’t an exception. In general, sellers who accept cryptocurrencies believe that they are digital gold. Furthermore, with the rising interest in cryptocurrency globally, it is sure that cryptocurrencies are becoming a popular consideration for investing in real estate.

It is clear that during slow economic growth, cryptocurrencies aren’t spared. Rather, they are the ones that are hit the hardest. Therefore, when a recession arises, it is common for cryptocurrencies to lose around three-quarters of their value. The good news is that there is a silver lining between these periods.

Until the fears of recession fade away completely, both cryptocurrency and real estate would struggle to make dramatic gains. Apart from that, investors who took advantage of the depressed prices and lowered their cost basis had positioned themselves for gains similar to the bull runs during 2017 or 2021.

The bottom line is that no one can predict accurately the changing economic sentiments. Hence, no one can time the market. Still, with the improvement of macroeconomic conditions, people can expect cryptocurrencies to make recovery as they did earlier in the past.

Do you want to sell or acquire property?

JLM Real Estate in San Diego can help you today and provide you with a free property valuation.

Check out our team page and check which one of our advisors best fit your needs.