The Metaverse is booming, transforming the real estate industry

Real estate could be forever transformed thanks to decentralized technology. As the metaverse develops, so does digital real estate.

Mark Zuckerberg may claim that the metaverse is the future - but in the eyes of others, that future has already begun. Science fiction author Neal Stephenson coined the term "metaverse" in his 1994 novel Avalanche. In the novel, the protagonist Hiro Protagonist travels through the virtual world.

Since 2003, millions of people have also worked, played and socialized in the online Second Life metaverse. While the game was in its heyday in the first decade of the 2000s and featured some blocky graphics, a far cry from the modern metaverse visions put forth by the likes of Meta and Microsoft, there's a lot to be said about people in a virtual metaverse. The idea of interacting is not new.

Currently, Decentraland is arguably the most famous modern metaverse, inspiring users around the world to buy and sell digital real estate, explore, interact and play. The Decentraland Foundation was launched in 2015, and the project conducted an initial coin offering (ICO) in 2017, netting about $26 million at the time. While Decentraland is broad in scope and features many, the platform has drawn many attention to the lucrative and growing digital real estate industry.

On Nov. 25, the media reported that non-fungible token (NFT)-based real estate firm Metaverse Group bought a piece of “land” in Decentraland for $2.43 million to help with plans to enter the digital fashion industry.

Metaverse monetization shakes up the real estate industry

The Metaverse is booming, transforming the real estate industry

It will become increasingly clear that commercial real estate in the metaverse will play a huge role in the global real estate industry in the coming years. In the fall of 2021, Tokens.com signed a letter of intent to purchase a 50% stake in a digital real estate portfolio owned by Metaverse Group.

The popularity of buying and selling digital properties means that companies like Metaverse Group do much of the same buying, selling and marketing as traditional real estate companies do. With prices rising and buyers craving virtual land, some are skeptical that investing in digital real estate will prove prudent.

Yet despite the high prices, interest in Metaverse real estate continues to grow, especially as the coronavirus pandemic pushes more people online, making them more inclined to socialize virtually. Those interested in Metaverse real estate also face competition from celebrities who don't shy away from touting their digital real estate activities.

In late September, The Sandbox announced a partnership with legendary rapper Snoop Dogg to build his mansion and NFT series in that metaverse. Over the next month, Paris Hilton struck a partnership with Decentraland and Genies to be one of the leading artists for the first Metaverse Festival, which took place at the end of October.

How real estate investors are turning to virtual properties

Companies other than Meta (formerly Facebook) and Microsoft have not shied away from attention and interest in the Metaverse, and they are eager to get in on the action.

Like traditional real estate, which retains value even in difficult economic times, Metaverse real estate continues to boom despite the ups and downs of Bitcoin and other cryptocurrencies.

The popularity of NFTs, coupled with growing interest in online environments, contrasts sharply with the limited amount of land available in virtual worlds within the metaverse — keeping prices high.