How The Real Estate Industry Innovates Without Becoming Obsolete

What’s new and shiny will someday seem old and obsolete. One of history’s greatest examples of obsoletion is the typewriter: A revolutionizing mechanic device that made writing 10x faster.

While there’s a lot of argument about who invented the first typewriter, it is commonly agreed that the first commercial one was the “writing ball” of Danish pastor Rasmus Malling-Hansen (1870), and from then, the story went on with various typewriters:

… Until the computer came and made the typewriter an object for museums around the world.

Rogers Bell Curve for innovation adoption

You might know Rogers’ bell curve. If not, it is pretty easy to understand: It is simply used to describe how technology is adopted in society over time.

Where we are on the curve is never easy to predict, but it is pretty safe to say that we are on the first part of the curve, somewhere between ‘Innovators’ and ‘Early Adopters’.

How blockchain and tokenization technology innovates the real estate industry

Real Estate is going to be traded on Blockchain. This has already happened in the European Union and the U.S.A, and it is going to become the new normal of buying and selling real estate because:

  • Automates legal and bureaucratic processes.
  • Democratizes real estate investment: More people can participate.
  • Assets are becoming transparent and liquid. Transactions are becoming fast, flexible and secure.

Real Estate won’t become obsolete — before humans become obsolete

… If humans are obsolete, your first concern wouldn’t be an investment.

The beauty about real estate is, that it is both an investment, and a consumable good, that doesn't disappear when being consumed. (Lived in day-by-day). Most likely the real estate will be improved over time, since owners might install solar panels, skylights, better heating or cooling, faster internet, or new furniture.

The richer we get:

The more square meeters we want.

The less we want to share walls with.

The more populated areas get:

The demands rise

The more we build to provide square meters for everyone.

So your urban real estate investment basically relies on two factors:

The urban population keeps increasing

Overall economic growth in society

… And how are these factors being predicted?

In 2050 UN expects the population to grow from 7.7b billion to 9.7 billion people.

That’s 2 billion people looking for a new home, equal to the sum of the population of Africa, The European Union, and the U.S.A in 2022.

The left graph shows the % of the population living in the urban areas and the right graph shows the absolute growth in human creatures on earth. Data from the World Bank.
Data from the World Bank

While the global GDP has grown about 65 times since 1960, you never know what will happen in the future.

The stable haven for investments: Real Estate

And what do wealth growth, population growth, and urbanization mean to the real estate market?

You probably guess it, but here's some data to underly the point.
Over the last 10 years the U.S.As mean price of new real estate has increased by 85%:

Data from the World Bank

Conclusion: Real Estate is becoming liquid, fractionalized, and easy to trade due to blockchain technology

For many years real estate documents and prospects had to be printed and delivered to you. This seems so obsolete nowadays where everything is just one click away.
What is changing while this article is being written, is that the real estate property is being tokenized, fractionalized, and traded on blockchain in real-time.
This is due to the Distributed Ledger Technology provided by Ethereum (among others), and companies combining their forces:

- Tokenization software providers like DigiShares
- Automated market makers like
Balancer
- Decentralized exchanges like
RealEstate.Exchange

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This is not investment advice, nor intended to be. This article is for entertainment purposes and uses only.

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