THE VIRTUAL WORLD AWAITS!
A “housing market” is rapidly evolving with the rise of the Metaverse – an artificial, computer-generated environment where people can interact with each other using virtual reality technology. The concept of “virtual real estate,” where people can buy, sell, and rent virtual land has gained traction, with some experts predicting it will become a multi-billion-dollar industry by 2026.
The potential uses for this surreal form of real estate are certainly intriguing. Individuals can use these “properties” to socialize, host gatherings, neighbor celebrities, and indulge in ownership bragging rights. Kristi Waterworth, The Motley Fool journalist and analyst, has observed that, “Buying a piece of real estate for a residential purpose in the metaverse is a king of prestige.” Upon purchasing a virtual home, buyers will receive a letter of authenticity and 3-D models of their property. They can choose a plot of land and place their “home” right in the midst of their preferred online-gaming world.
On the commercial side, businesses can set up virtual storefronts and offices to reach customers in the Metaverse. For example, KB Home, a national homebuilder in the United States, inaugurated a community called Decentraland, which allows prospective buyers to enter and explore the builder’s model homes and experiment with various customization options.
Contractor Gabe Sierra recently opened bidding on his newest venture, an 11,000-square-foot mansion in Pinecrest, Miami. The deal includes an identical digital replica of the mansion in the Metaverse, which Sierra describes as a pairing of “a real-world build and expand[ing] on it in the digital space. As these technologies get more immersive, it’s going to make a lot more sense.”
With the Metaverse rapidly evolving, it certainly has the potential to transform the real-estate market, as we now know it, and will likely create new opportunities for investors and developers alike. But given that it’s still in a nascent state, this space still faces a number of challenges, including the exposure to virtual real-estate tax, and other governing regulatory schemes, that will need to be addressed before it can reach its full potential.
(That virtually exhausted me.)
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