5-Year Study Finds Bitcoin Much Better Than Real Estate

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Real estate, whether land, business, or a single-family home, has long been considered one of the most basic elements of financial security in the United States.

The American dream, it’s called.

Unfortunately for Inman readers, homeownership is simply not the same balm for restless nights as it used to be, especially among millennials, whose number who expect to rent forever have almost doubled from 2018 to 2020, according to an Apartment List study from earlier this year.

Obviously, affordability remains the biggest hurdle. And, the more out of reach the cost of a home, the sooner and more often Americans will seek other forms of wealth creation.

Like Bitcoin.

An in-depth study released this week by Point2Homes.com revealed detailed ROI comparisons between one of the most popular forms of cryptocurrency and real estate. The results are astounding.

The intention of the five-year analysis was to compare the equal returns on investment in a median-priced home in the 100 largest US cities based on 2017 prices with a 20% drop, versus Bitcoin at $ 964. .

The results showed that both options offered notable avenues of financial gain, but the discrepancies are hard to ignore.

In 2017, the median home price in San Francisco was $ 1,252,543, requiring a 20% down payment, or initial investment, of $ 250,509. This initial investment would have made it possible to purchase 260.

Today, the median home price is up 22%, a gain of $ 270,280. If you had bought Bitcoin instead, you would have made $ 16.08 million.

Nationwide in Manhattan, 20% less than the median price of $ 1,451,250 would cost $ 290,250, or ₿ 301. Since the median price in Manhattan has fallen since 2017 to $ 1 million, selling today would result in a loss of over $ 450,000. Your Bitcoin, however, would be worth $ 18.6 million.

In a more down-to-earth market, like Columbus, Ohio, the 2017 home would require a down payment of $ 27,738, or 29 ₿. Today your 29 would be worth $ 1.78 million while the real estate gains on your Columbus would be around $ 76,000.

Laredo, Texas? $ 12,000 versus $ 2 million. Norfolk, Virginia? $ 57,000 versus $ 2.5 million.

And so on the examples go.

True, real estate was never intended to generate wealth overnight. Appreciation at historic inflation was generally all that was expected. Hang on to your house, pay off the mortgage, and retire somewhere warm.

Real estate offers ways to increase property value throughout with tactics such as renovations, additions, and landscaping.

But a new deck won’t do for your wallet what a few Bitcoins can.

Cryptocurrency is still a niche currency, and several variations of it have proven to be extremely volatile. Ethereum and Dogecoin are currently at the top of the list in this department, according to Yahoo Finance.

The Point2 study interviewed a well-qualified roster of experts in economics and the emerging world of cryptocurrency. The consensus on its dominant viability is mixed, but those who are unsure have offered several qualifiers on how it can become so.

In short, it is not as far from becoming “common” as some may think.

In fact, you don’t have to search much to find a financial planner who would recommend you buy crypto. The best will tell you to walk lightly, of course. Pacaso, the second home investment platform, allows buyers to use cryptocurrency. Inman reported on a number of homes purchased with blockchain-backed funds.

Ultimately, the rise of accepted alternatives to wealth building collides with the industry’s message that owning a home is the most proven and true method for financial well-being. Things are changing and this message needs to be massaged.

If real estate professionals continue to market their product as the quintessential American wealth creator, the comparisons with cryptocurrencies and alternative money makers (NFTs, anyone?) Go down.

The 2020 NAR Home Buyers and Sellers Generational Trends report states that Millennials make up 38% of today’s home buyers. An Inman report on Apartment List’s Millennial Homeownership Report 2021 said, “In 2020, 18.2% of Millennials who do not currently own a home are expected to still rent, up from 12.3% in 2019 and 10.7% % in 2018 ”.

And guess who is most likely to invest in cryptocurrency?

Millennials make up 74% of likely cryptocurrency buyers today, according to Gemini’s 2021 State of US Crypto report.

The real estate industry has waited years for them to arrive, viewing the well-paid, tech-savvy generation as an immeasurable dip in commission potential. Looks like cryptocurrency brokers are seeing this potential as well.

In summary, the largest population in the country is not that enthusiastic about owning a home.

And more and more ways to build wealth seem to grab their interest. Bitcoin is on your side.

Email Craig Rowe

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