blockchain in real estate, climate fund, housing market, and more
In this issue - - -
# how blockchain can create trust in real estate # fifth wall closed $500 million climate fund # housecanary insights on the housing market # find reasons to smile # heard around the web3 # complete a 6-minute survey to win a $1,000 investment credit
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#How blockchain can create trust in Real Estate
Why we think this is important: Real Estate industry has historically been opaque and characterized by an inherent lack of trust between transacting parties. Blockchain can bridge the gap.
What we need to know: blockchain and the Real Estate industry
Blockchain is an exciting and still emerging technology that can be more revolutionary than evolutionary for the real estate industry. It could offer a more effective way to handle a wide range of transactions.
There is no question that the concept of blockchain has garnered a lot of interest from a diverse range of stakeholders, including Real Estate operators, financial institutions, governments, companies, and more. So let's begin with a review of what blockchains actually are and why they're important.
What blockchains are:
A blockchain is a decentralized ledger of transactions that exists across a network. Let's break this definition down.
A transaction ledger is simply a place where a record of a transaction may be made. Blockchains are referred to as decentralized ledgers since each participant on the network has their own synchronized copy of the ledger. Each and every participant is able to view and verify simultaneously that a transaction has taken place and has been recorded in the ledger.
What is so unique about these ledgers?
It all stems from the technology, which is built on applied cryptography.
Consider a participant who wishes to add an item to the ledger, such as when an asset's ownership is transferred. This proposed transaction is encoded using well-known methods, and all active network participants are alerted. Each blockchain is equipped with its own consensus mechanism to validate that the transactions are genuine and that information is recorded to the permanent record.
Once confirmed, the new transaction or ledger entry becomes yet another data block in a chain of connected transactions. And, because everyone is working from the same data, the transaction record, once completed, cannot be contested or modified.
Current state: A status quo for the last 20 years
Market participants currently rely on reliable records of the ownership of each asset in order to complete a real estate transaction. They often look for dependable intermediaries to facilitate different phases of the transaction and ensure that all parties are in agreement. Some of these intermediaries are:
a title company to confirm that the seller has clear title, which can then be transferred to the buyer;
a confirmation from the financial institution that the buyer has the necessary funds;
a mortgage lender to confirm that the buyer is eligible for a mortgage; generate mortgage documents, create a lien on the property, and then wire funds to the escrow company at the closing;
an escrow company to hold the earnest money; receive funds from the buyer & the buyer's lender; and disburse funds to the seller, mortgage company of the seller, real estate broker, etc.
and a few dozen other participants.
A summary of the current state: a ton of friction in terms of both time AND money.
Functions like custody, clearing, and trust are layered on top of one another in any traditional real estate transaction.
It takes a set of activities and steps to validate the paper trail of what took place in the past and generate a new paper trail during the execution of each transaction, which includes more reconciliations, confirmations, and identity management steps.
Stride in the right direction
Blockchain technology's potential to increase transaction speed, enhance transparency, streamline processes, and fortify security could significantly reduce transaction costs and provide greater liquidity to the real estate asset class.
Published first at Tirios blog.
Stay tuned for in-depth insights on Blockchain, NFTs, web3 mania, and how it all impacts real estate in upcoming issues.
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#Fifth Wall closed $500 million Climate Fund to invest in software, hardware, renewable energy, energy storage, smart buildings, and carbon sequestration technologies
Why we think this is important: Actions through innovation and technology, not hope, are the path towards a more sustainable future. Fifth Wall's fund is a leap into the future, and we wish them good luck.
Climate change is a big problem that requires out-of-box thinking and bold steps. The real estate industry accounts for approximately 40% of global greenhouse gas emissions.
We believe that investments in new technologies can make it possible to craft sustainable business plans for Real Estate Industry. In addition, the much-needed technological investments can accelerate the shift to sustainable energy solutions while maintaining, if not improving, the market competitiveness of the industry.
Background: Fifth Wall is the largest venture capital firm focused on technology for the global real estate industry. Read More on the Fund announcement here: CNBC Story
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photo credit: Scott Brundage, NYTimes
#HouseCanary sees signs of cooling in the housing market, however supply shortages continue to persist nationwide.
Why we think this is important: Despite high interest rates and a nationwide slowdown in home price increases, buyers continue to face a fiercely competitive market where supply restrictions outweigh a slowdown in demand.
According to HouseCanary: the nationwide median days on market (which is measured from the date of listing against the date when a home goes under contract) stood at 29 days. This is down 6.5% from where it was one year prior at 31 days on the market.
Tirios is currently active in the Texas market. The days on the market stands at 23 days in Texas. This is approximately 40% lower than pre-covid days, when the number was 39 days, and is 8% lower than July 2021, when the number was 25 days.
Elevated interest rates have undoubtedly had a direct impact on the number of qualified mortgage applicants in recent months, resulting in a slight slowdown in market demand. On the supply side, many of the homeowners who were thinking about selling are currently locked into historic low interest rate mortgages, and it may appear that they have decided to postpone their sale decision for the time being. The effects of the ongoing supply shortage are still visible on certain building materials, lowering the likelihood of excess new home inventory entering the market anytime soon.
It highlights the market forces currently at play, and while the days of receiving 50 offers on every single home are over, buyers are still facing fierce competition to secure the limited available supply on the market.
Please contact our team at members@tirios.ai if you would like to access data related to any specific locations or learn more about how Tirios is leveraging advanced analytics and AI-models to evaluate investment opportunities.
Background: HouseCanary is a technology company providing highly accurate home valuations and is one of the preferred partners for Tirios.
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#find reasons to smile
50 cent changes name to 85 cents to keep up with inflation
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#heard around the web3
The city of Miami has partnered with Time, Mastercard, and Salesforce to launch a collection of 5000 NFTs created by local artists. Mayor Francis X Suarez’s announcement continues Miami’s love affair with the emerging new technologies of Web3 and NFTs. Read here
El Salvador buys back debt after Bitcoin losses. Read here
CME Notches Record Crypto Derivative Trades in Q2. Read here
Tiffany & Co., one of the most prominent names in luxury goods for over a century, is launching a series of NFTs. The jeweler hinted at its upcoming sale, set to begin August 5, by tweeting out a video of a pixelated grid revealing: NFTiff. The tweet also specified a price of 30 Ethereum (just over $51,000 at the time of tweet). Read here