Virtual real estate investment is expected to triple this year compared to last year, one expert predicted during a panel discussion at the Mansion Global Experience Luxury conference on Wednesday.
“Virtual land sales will exceed $1 billion by 2022,” said Noah Gaynor, co-founder and CEO of Parcel, which provides tools for finding homes in virtual worlds.
The virtual event focused on tech real estate with input from panelists discussing how the industry is adapting in an increasingly digital and high-tech environment.
The concept of a metaverse, having virtual online platforms rather than the real world, experiences and lifelike aspects including money, economy and property ownership can be a difficult concept to grasp.
“A lot of people are in it and they don’t realize it,” said Mark Norman, associate dean of NYU’s Shaker Institute for Real Estate. “Whether it’s playing cards at a casino, or playing a simulation game in a game. I think the way to look at it is One way is like a flight simulator, being able to do something and think about it, but not be in it.”
Real estate for sale in virtual worlds—whether on platforms like Decentraland, Otherside, or Sandbox—is primarily open spaces where people can build virtual stores or digital art galleries. But experts say a new wave of demand for prefab buildings is coming.
“We’re starting to see designers and architects creating these,” Mr. Gaynor said, adding that he expects the trend to grow over the next few years.
Michael Gord, co-founder and CEO of GDA Capital, a global digital asset investment and capital markets advisory firm, agrees. “There is considerable demand [prefab property] And there are new marketing strategies, like building marathons,” he said.
While there can be plenty of differences between virtual and real-world real estate, at least one factor overlaps, and that’s how they’re valued.
“What we’re seeing is actually very similar to the real world right now,” Mr. Gaynor said. “Like the real world, it’s more valuable if it’s near a road, near water, or somewhere with status. Now, it’s a lot like what we intuitively think would make land valuable.”
And, just like in the real world, the value may fluctuate.
“Prices of virtual real estate have come down,” Mr. Gainer added. “However, we’re seeing real estate sales make up an increasing proportion of NFT sales.” Virtual real estate typically accounts for 5% of all NFT transactions, but in the last quarter it was closer to 14%, he said.
Investors can position themselves, though, by developing their virtual land.
“Similar to the real world, if you just buy a piece of land and don’t do anything with it, your return is less,” Mr. Gold said. “It’s a high-risk, high-reward investment if you want to deploy capital into land, but if you don’t build on that, the risk is even higher.”
For those arguing for a buy, “From a fundamental standpoint, fundamentals are as strong as ever, and world developments are as strong as ever,” Mr. Gaynor said. With prices down significantly from their peaks, virtual real estate “is a great opportunity right now”.
Back in the real world, simplicity and security are hot topics in home automation, already at the top of buyers’ wish lists.
“At the heart of all our projects is the client profile, ensuring we are responsive to our clients’ requirements,” Natalia Miyar, founder of Natalia Miyar Atelier, said during a panel discussion titled “The Future of Home Design and Automation.” That increasingly means a complex and simple solution, she said.
“Our clients are looking for the easiest controls. In the days of having an iPad in every room, it just doesn’t work for our clients anymore. They want an on-off button,” she said.
In California, “our clients are definitely looking outside when it comes to home automation,” said Jaqui Seerman, CEO of Jaqui Seerman Design. “The exterior of the house, fire pits, pool lights, music, ambient lighting of any kind. These are equally important.”
Simple is also popular outdoors. “Everybody wants that very light touch and they can get close to all of that on their phone without having to run around the yard,” she added. Whether indoors or out, homeowners want fingerprints to control their automation, she said. Selman said.
Francis Nicdao, principal and chief creative officer at Pembrooke & Ives, said security is increasingly important to clients. “It’s super important right now, this kind of thing can make [clients] sleep at night. ”
With security tightly controlled and people sleeping more peacefully, it’s no surprise that there’s a renewed focus on master bedroom suites.
“Maybe parents want to run away from their kids, I don’t know what that is,” Mr. Nidow said. “But most importantly, the master bedroom has been turned into a command post where they can control security, lighting and more. [It’s] Pretty much a way to escape or spy on your kingdom. “
In a sustainable world, “sustainable luxury is here to stay,” said Scott Morris, director of carbon sequestration at Marisol Malibu. “These are the Teslas and Patagonias of the family.”
While green buildings can be considered modest, “I think that’s just plain wrong,” added Aandreas M. Benzing, founder of AM Benzing Architects, in a conversation titled “Zero Energy/Passive Home Innovation.”
“I think for luxury it’s a must,” he said. There’s no reason why we shouldn’t build prettier or bigger buildings. ”
In fact, sustainable choices can be made throughout luxury homes. “A lot of interior designers like to choose French white oak,” says Mr. Morris said he switched to American white oak from Allegheny, Pennsylvania. “We’re not skimping on luxury, it’s still a luxury floor, but better for the environment.”
However, Juhee Lee-Hartford, founding and managing principal at River Architects, said homeowners looking to combine luxury with eco-friendly practices may have to adjust their expectations a bit. It “could be challenging, the client wanted a lot of windows or a lot of space, so we had to balance that.”
One thing they don’t have to care too much about, though, is cost.
“Costs are always hard to pin down, but in general the cost of building a passive house won’t be much higher,” Mr. Benzin said. Owners can expect a premium of 0% to 5%, depending on the size of the building, he added.
Experts say the cost of adding energy-saving measures will soon be recouped in savings.
For high-end buyers in Southern California, seclusion is king, said Aston Rose co-founder and former basketball player Rod Watson.
“Privacy is always a top priority,” he said during a panel discussion titled “Future Players in the Market: Athletes Become Agents.” His clients were looking for gated properties with “limited access to even understand what’s going on there”.
Other amenities at the top of the wish list include an open floor plan, swimming pool, hot tub, gym, movie theater, and a basketball court for his NBA clients.
But while Michael Jordan’s massive, highly customized home with a full basketball court in suburban Chicago has been on the market for a decade, the same won’t happen to Mr. Jordan. Watson’s watch.
“It’s just being honest with the client. I’ve been in a situation where I had to tell the client ‘I don’t think it’s good for you to pay so much or own so much house,'” he said. “I think you just have to be honest and tell them it doesn’t make sense.”
But this doesn’t happen very often. Moving away from the “stupid athlete” stereotype, “today’s generation of athletes and entertainers, they’re smart,” he said.
What once helped drive the competitive nature of these real estate experts in their former professional athlete careers still helps today.
“At the end of the day, it’s about having a competitive drive, which definitely shifts. Perseverance and results-oriented,” said Viktor Simco, vice president of acquisitions at SRG Properties and former snowboarder. “I don’t mind chasing and getting into the weeds and finding the right deal.”