While Facebook founder Mark Zuckerberg says that the world’s future is in the metaverse, some believe he’s a little late in making those claims. The term was coined back in 1994 when sci-fi author Neal Stephenson used it in a book in which characters found their way through a new virtual world.
Science fiction, inevitably, made its way into real life. Since the early 2000s, millions of people have socialized, played, and worked within online games such as Second Life. Though that game’s mechanics and graphics are more rudimentary than those made by companies like Microsoft and Meta, the idea of metaverse worlds is not a new one. Here, we’ll outline how the metaverse is affecting the real estate industry now and how it will shape it in the future.
Decentraland and its Effects on the Real Estate Market
As of now, Decentraland is one of the most popular metaverses, having encouraged people around the world to play games, interact with one another, and invest in digital assets. It was founded in 2015, with an ICO or initial coin offering worth roughly $26 million. There’s a lot to do and see in Decentraland, and it has created immense interest in the virtual real estate field.
A Monetized Metaverse is Changing Real Estate as we Know It
Over the past couple of years, it’s become clear that commercial investments in the metaverse will play a significant role in the world’s real estate industry. At the end of 2021, Tokens.com publicized its plans to purchase half of the Metaverse Group’s digital portfolio, with plans to market it as the first digital REIT (real estate investment trust). The public listing could come as early as the end of 2022.
As more investors buy and sell digital assets, the Metaverse Group and other companies will fulfill many of the same functions currently undertaken by conventional real estate companies. As digital real estate prices increase and buyers jump into the market, many believe that it is not a viable long-term investment. Despite some investors’ reluctance and sharp price increases, interest in these assets is steadily growing.
Even Traditional Real Estate Buyers are Getting Into the Metaverse
While Microsoft and Facebook have long held a stake in the metaverse, others are ready to throw their hats into the ring. Just as conventional real estate assets hold their value during economic downturns, properties in the metaverse are steadily increasing in price despite cryptocurrency market fluctuations.
The immense popularity of NFTs (non-fungible tokens), as well as that of online worlds, lies in stark contrast to the finite amount of land within the metaverse—thereby keeping prices elevated. For instance, there are only 90,000 land parcels within Decentraland. Well-known investment firms are now wondering how they can take advantage of everything the metaverse has to offer.
The Metaverse Isn’t Going Anywhere
Popularity, high prices, and the simplicity of trading virtual assets all mean one thing: that the metaverse is more than a passing phase. Just as many investors snapped up domain names during the internet’s early days, savvy buyers are snapping up the metaverse’s best properties.
As the online world expands, so will the virtual real estate market. To maximize the value of these investments, it’s best to assume that the metaverse and its ‘properties’ are going to become a permanent part of our world.