In the United States, homeownership and the real estate industry are an integral part of the nation’s fabric. An impressive 67.9% of Americans owned a home in September 2020, 3.8% higher than the homeownership rate in the second quarter of 2019. However, by December the number fell to 65.8%, and by February 2021, the number had slipped further to 63%.
The decline is not due to the lack of demand. The US housing market is worth $33.6 trillion, and the value of US homes has increased by 7.2% since 2018. Meanwhile, US Housing Starts soar to a near 15-Year high earlier this month. The introduction of millennials into the housing cycle has also provided a boost. In 2007, around two-thirds of investors were primarily focused on the stock market. That number has now fallen to 50%, with many Millennials choosing to invest in real estate instead. In 2018, 37% of residential buyers were millennials. By 2020, the number had risen to 45%. According to forecasts, Millennials are expected to form more than 20 million new households by 2025.
However, despite the uptick in demand, active listings (the number of homes listed for sale at any point during the period) slumped 37% from 2020 to a new all-time low in February as the supply failed to meet demand. Meanwhile, renters have seen a steady increase in rent prices for over a decade.
Another issue is the cost. Asking prices of newly listed homes hit a new all-time high of $334,770, up 11% from the same time a year ago. Raising a deposit (average around 20%) is hard enough but with rents increasing, many are unable to afford to rent and save a deposit. We know from history that owning property, especially property that produces income, has long been one of the fastest paths to generational wealth So, with so many barriers, what is the answer? Blockchain technology and tokenization
Since Blockchain technology and tokenization entered the real estate industry, things have been changing for the better. Real estate tokenization has become one of the best cases of blockchain technology usage. Tokenization powered by blockchain technology gives investors unprecedented access to private real estate investments, transparency, and liquidity.
RealT Opens Up the Real Estate Industry
One company that is bringing tokenization and property ownership to the masses is RealT. The Florida-based company provides fractional and frictionless real estate investing in a fully compliant and fully digitized manner, Now, anyone with $50 and an internet connection can invest in the US residential market.
RealT offers a number of curated properties with ownership of each property distributed across a limited number of representative tokens. Token owners can collect revenue from rent, and vote on property decisions via blockchain in a way that is instant, cost effective and transparent.
Gone are the need for third parties and all the hassle they bring. Gone are dealing with expensive and time-consuming legal duties. Also gone are the delays with any bank transfers. Instead, rent payments are automatically sent to investors and can even be collected weekly.
Based on the Ethereum blockchain, the RealT internet-only platform enables anyone from around the world to grow a global, digital real estate portfolio in the United States. Each property is an asset registered as a separate LLC. This means tokens are representative of that asset only making the investment clear and safe.
With tokenization and the likes of RealT, building a profitable property portfolio has never been easier.
