Real eState
The Next Hot Housing Market Is Out of This World. It’s in the Metaverse.
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Despite the implosion of FTX and projections of a cryptocurrency winter, the metaverse real estate market is expected to grow by $5.37 billion by 2026.
In March, Gabe Sierra, a contractor whose family has been in the construction business for more than 30 years, will take offers for his latest creation: an 11,000-square-foot mansion with seven bedrooms and a pool in Pinecrest, Miami.
To sweeten the deal, he’s throwing in the exact same house and a King Kong-size, bright green gorilla that scales downtown skyscrapers and stalks the streets of South Florida.
The twin home is in the metaverse — a catchall phrase for the growing conglomerate of immersive digital worlds where avatars work, play and purchase goods. Pixelated parcels of land are being bought, sold and built upon in a market now worth $1.4 billion, making the metaverse a new frontier for real estate builders and investors.
Mr. Sierra, an avid gamer who uses a purple gorilla as one of his own avatars, paid $10,000 for a digital parcel in an online world called the Sandbox, and then partnered with Voxel Architects, an architecture firm specializing in virtual 3-D properties, to build the digital home to pair with the real thing. It all hits the auction block in March, and he’s hoping for a sale price of around $10 million.
“It’s a project that blends the line between physical and digital to the furthest extent that I could on a residential home,” Mr. Sierra said of the house, called Meta Residence One. “It pairs a real-world build and expands on it in the digital space. As these technologies get more immersive, it’s going to make a lot more sense.”
Much like real-world real estate, where pricing fluctuates according to the principle of supply and demand, metaverse real estate also operates on a fixed scale. The internet itself may be boundless, but most virtual gaming universes have already been sliced and diced into a set number of parcels, meaning as the number of buyers increases, prices go up as well.
Financial transactions in the metaverse are handled in cryptocurrency and powered by the blockchain — a digitally distributed public ledger that eliminates the need for a third party like a bank. Despite the implosion of FTX and projections of a crypto winter, the metaverse real estate market is expected to grow by $5.37 billion by 2026.
In the Sandbox, one of the most popular metaverse worlds and where Mr. Sierra made his $10,000 purchase, much of the virtual land rush has been at the hands of global corporations like Adidas, Atari and Warner Music Group, who have bought spaces to create entertainment, sell goods, launch virtual headquarters and host immersive gatherings for employees and fans.
Last year, the total value of land in The Sandbox, which is sold via a nonfungible token, or NFT, was estimated to be $167 million. And while land purchased directly from the Sandbox goes for about $400 a parcel, there’s an active secondary market where prices can be many times that. Proximity to land owned by celebrities and big-name brands drives up prices, too: After Snoop Dogg purchased parcels in the Sandbox and christened them “Snoopverse,” one buyer paid $450,000 just to become his neighbor.
“Land is becoming the infrastructure of the metaverse,” said Sebastien Borget, the Sandbox’s co-founder. “In this ecosystem, there are actors that are developing and offering services for people to find the right land, buy the right land and understand the value of that land.”
The metaverse has been around since 2003, when Second Life, a three-dimensional virtual world platform, came onto the scene. But virtual real estate didn’t truly take off until late 2021, when Mark Zuckerberg announced that the social media platform formerly known as Facebook would now be called Meta, placing a hyper-public bet on the future of the next digital frontier.
Since then, land sales in the metaverse have climbed into the seven figures, including a virtual estate purchased for $2.4 million in November 2021 in Decentraland and another for $1.65 million in Otherside in May 2022.
And now, in addition to billboards and burger joints for avatars, homes are being constructed on these parcels of land. They don’t offer shelter or a place to sleep. But they do offer our increasingly-online selves a place to gather — and show off.
“Buying a piece of real estate for a residential purpose in the metaverse is a kind of prestige,” said Kristi Waterworth, a journalist and contributing analyst for The Motley Fool who writes regularly on metaverse real estate.
It’s also a chance to bend the rules of physics. Everyrealm, a metaverse technology and infrastructure company, partnered with artists including Misha Khan and Daniel Arsham to create the Row, a futuristic collection of digital homes marked by melting, Salvador Dali-esque angles and dreamlike floating spheres. The homes premiered at Art Basel in an immersive exhibit and are not yet for sale, but Janine Yoriro, Everyrealm’s chief executive, says she anticipates each will sell for about $75,000.
Buyers will receive a certificate of authenticity as well as 3-D models of their home, and then be able to place it on a plot of land in the online gaming world of their choice.
“We called upon a bunch of cultural references, one of which was the idea of a Sears home, when back at the turn of the century you could buy plans for a home and then build it anywhere from New York City to Des Moines,” Ms. Yoriro said.
Some online worlds present a digital map of the earth, allowing buyers to purchase places or coordinates that hold sentimental or historic value. T.J. Brisbois, 37, a real estate investor in Detroit, owns about a dozen land parcels in Motor City, but not on Earth — in the Detroit of Upland, a gaming portal mapped to the real world. He buys them, marks them up and resells them. He estimates he’s made a 10 percent return on his money since he started in 2022.
His purchases, he said, are just an extension of his business in the real world.
“I didn’t really get it until I got into it, and I was willing to put in a few real-world dollars,” Mr. Brisbois said. “It’s important for people that are in real estate, because there’s real opportunity here.”
Buyers concerned about real estate taxes on virtual real estate can breathe easy, said Mike O’Brien, who heads up the Web3 and Digital Assets team at Ernst & Young. Though tax law on virtual real estate is evolving, “we have yet to see property taxes on real estate that would be issued by a government,” he said, adding that indirect taxes such as consumer taxes, sales tax and gain considerations do often apply.
Mr. O’Brien is the owner of digital real estate — in Superworld, another digital world mapped over earth. He recently purchased the parcel of New York City land that is home to the bar where he met his wife.
Brick and mortar home builders are also tapping into the metaverse for opportunities to reach new customers. In January, KB Home, one of the largest homebuilders in the United States, cut the ribbon on a community in Decentraland, where potential buyers can enter, explore and toy with customization options on three of their model homes.
Buyers can swap out everything from countertop materials to overall architectural style. The move, said Amit Desai, KB Home’s chief marketing officer, is a natural outgrowth of the virtual walk-through options that have increased since 2020.
“Even before the pandemic, we were on this path of providing enhanced digital tools, but the pandemic accelerated the need for us to really allow prospective home buyers to search for a home from the comfort of their current homes,” Mr. Desai said. “The metaverse is just a nice extension of that.”
Real eState
Posthaste: Cottage real estate rush slows to a 'standstill' as remote-living honeymoon ends – Yahoo Canada Finance
Good Morning,
A chill has fallen over cottage country in Canada.
After a red-hot record run over the past two years, prices for recreational real estate in the country are expected to fall 4.5 per cent in 2023 as market activity slows, according to a Royal LePage report out this morning.
With the exception of Alberta, all of Canada’s recreational markets are forecast to see a decrease in single-family home prices. Quebec and Ontario are expected to see the biggest drops, falling 8 per cent and 5 per cent respectively.
This is a big difference from what the recreational market experienced over the past two years. Last year aggregate prices for a single-family dwelling increased 11.7 per cent to $619,900. The year before they soared 26.6 per cent.
“After two years of relentless year-round competition, Canada’s recreational property markets have slowed and returned to traditional seasonal sales patterns,” Phil Soper, president and chief executive of Royal LePage said in the report.
Soper said the recreational property market is less sensitive to rising interest rates because buyers tend to put more money down and borrow less, but overall inflation and a “severe lack of inventory” have led to a slump in sales.
Another factor is a reversal of the pandemic exodus out of the cities. During COVID-19 lockdowns when offices closed, many Canadians used their cottage as a second home and worked from there. But with companies requiring employees back in the office at least a few days of the week commutes have become challenging.
“For many, living in cottage country full-time has lost its romantic shine, meaning we are back to viewing the cottage, cabin and chalet as a weekend and summer escape from urban living,” said Soper.
In Atlantic Canada, a “pandemic relocation hotspot,” 46 per cent of brokers said they were seeing a trend of homeowners returning to cities after relocating to the region and demand for cottage properties has decreased significantly.
“The multiple-offer scenarios and homes selling over-asking are not as common today as they were during the pandemic boom,” said Corey Huskilson, sales representative, Royal LePage Atlantic in South Shore, Nova Scotia.
Cottage prices in Ontario climbed steadily during the pandemic years, with the price for a waterfront property topping $1 million in 2022. This year prices are expected to fall by 5 per cent.
“After two years of historically high pandemic-driven sales, activity in the recreational market came to a comparative standstill in the last half of 2022. Rising interest rates, buyer fatigue, and lack of inventory all played a role,” said John O’Rourke, broker, Royal LePage Lakes of Muskoka.
O’Rourke expects activity to be more balanced this spring, with traditional cottage buyers coming back to a market where they don’t have to compete with “the investment-focused buyer, a prominent player during the pandemic boom.”
Alberta is the one area of the country bucking the trend. Last year the aggregate price for a recreational single-family home here climbed 13.3 per cent to $1,165,500 from 2021. This year that price is expected to rise to $1,171,328.
Next door to Banff National Park and the home of many luxury properties, Canmore is a significant driver of prices in Alberta.
While brokers here are seeing lower inventories, demand has remained stable.
Moreover, 65 per cent of the brokers surveyed said they were not seeing the trend of homeowners moving back to cities after relocating, another factor contributing to the supply shortage.
“Buyer demand for recreational properties in Canmore continues to be driven by retirees and Albertans living in the surrounding cities, as well as residents from Ontario and Quebec. As Canmore attracts many cash buyers, higher interest rates have had little impact on this market, a factor that has kept prices stable,” said Brad Hawker, associate broker, Royal LePage Solutions.
One bright spot for all you cottage owners out there. Despite the declines forecast this year, the national aggregate price will still be 32 per cent higher than in 2020, after two years of double-digit gains.
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The World Bank is warning of a lost decade, saying that potential global growth has slumped to the three-decade low of 2.2 per cent a year through to 2030.
Crisis after crisis including the COVID-19 pandemic and Russia’s invasion of Ukraine have ended almost three decades of sustained expansion, says the new report.
With nearly all the economic forces that powered progress and prosperity over the past 30 years fading, potential GDP growth is expected to decline by about a third from what was seen in the century’s first decade. The decline is even steeper for developing economies and if the current banking turmoil explodes into a global financial crisis or recession, the declines will be steeper still.
The World Bank says its report offers the “first comprehensive assessment of long-term potential output growth rates in the aftermath of the COVID-19 pandemic and the Russian invasion of Ukraine.”
“A lost decade could be in the making for the global economy,” said Indermit Gill, the World Bank’s chief economist.
Expanding labour supply, boosting investment in sustainable sectors and cutting trade costs could increase GDP growth, but failure to reverse the slowdown would have profound consequences on the world’s ability to tackle climate change and reduce poverty, warned the report.
Federal Budget. Get primed for the budget which will be released at about 4 p.m. ET with Financial Post coverage here
Josie Osborne, minister of energy, mines and low carbon innovation, will make an announcement about support for leading-edge clean energy, such as projects advancing B.C.’s ocean economy
The U.S. Consulate General in Vancouver and MAPLE Business Council co-host a SelectUSA conference to inform small and medium-sized Canadian businesses, entrepreneurs and others about how to expand a business or invest in the United States.
Today’s Data: U.S. Advance Economic Indicators Report, U.S. Conference Board Consumer Confidence Index
Earnings: Lululemon Athletica
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It’s Budget Day in Canada today, and Jamie Golombek has gleaned some insight on the potential impact on our pocketbooks from the pre-budget Report of the Standing Committee on Finance, which contained 230 separate recommendations for tax changes and spending. Read on to find out how the capital gains tax and other changes could target higher-income Canadians in the budget. Then check back after 4 p.m. ET tonight when Golombek will have the latest news out of the federal budget 2023.
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Today’s Posthaste was written by Pamela Heaven, @pamheaven, with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.
Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com, or hit reply to send us a note.
Real eState
B.C. real estate: 2 resort properties on sale for $8.25M | CTV News – CTV News Vancouver
A pair of sprawling resort properties in B.C. – complete with a hotel, ski runs and lifts, lakefront cabins, a campground, and a pub – are on sale for less than the price of some Vancouver tear-downs.
Colliers has listed the Powder King Ski Resort and its “sister property” The Azouzetta Lake Resort for $8,250,000. It’s being billed as a “once in a lifetime opportunity” to purchase the two properties, which are located at the base of the Pine Pass in Northeastern B.C.
The properties are remote, located 67 kilometres east of Mackenzie and 195 kilometres north of Prince George.
This image from an online listing by Colliers shows a resort property for sale in Northeastern B.C. (Image credit: collierscanada.com)
The ski resort, according to the listing, has been rated number 1 for snow in Canada, getting an average of 12 metres of snowfall each winter. In total, there are 364 hectares of skiable terrain, comprised of 37 runs serviced by three lifts.
Accommodations at the ski resort include a 50-room hotel, two cabins for staff, a lodge with a licensed pub and a cafeteria. The possibility for expansion is built in, the online listing says, noting the resort has a master plan with the province.
“There is a three-phase development plan which allows for land acquisitions, real estate development, commercial development, ski runs, lifts, and summer recreation activities,” the realtor’s website says.
This image from an online listing by Colliers shows a resort property for sale in Northeastern B.C. (Image credit: collierscanada.com)
The second resort is roughly six kilometres away from the ski resort, situated on the “pristine,” 340-acre Azouetta Lake. The property includes several rustic but fully equipped A-frame cabins, RV sites, a campground, and on-site accommodations for a manager.
“The lake supports rainbow trout and an array of natural wildlife as well as numerous recreational opportunities such as kayaking, canoeing and boating as well as mountain biking, hiking, and other pursuits nearby,” the description from Collier’s says.
This image from an online listing by Colliers shows a resort property for sale in Northeastern B.C. (Image credit: collierscanada.com)
The property also has a gas station, a convenience Store and a restaurant called Café 97 which is open seven days a week, year-round.
A video tour of the property shows more of what it has to offer.
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The Royal Lepage Real Estate firm is predicting a slow down in cottage sales.
The three per cent decline in the price of a single family cottage in the Atlantic region follows an 18 per cent jump over the past two years.
It’s a smaller dip than the national average, which saw a four-and-a-half per cent drop from last year.
“The days of the multiple offers, well over asking [price], sight unseen type of buyers seem to be behind us,” said Corey Huskilson of Royal Lepage Atlantic. “Buyers are taking their time, they’re doing their research and they’re just waiting it out.”
The forecast says the average price of a cottage in the Atlantic region currently sits at $279,000 with the cheapest vacation homes found in New Brunswick’s St. Stephen region at $184,000. The most expensive is in Shediac, with an average price of $337,000.
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