Attendees of a recent Arcadia Association of REALTORS (AAR) event in California were each given $1 worth of bitcoin as part of a 9th July talk centered on the technology.
The California-based trade organization offers behind-the-scenes services to real estate agents, including continuing education on subjects relevant in the San Gabriel Valley. The event was the organization’s first aimed at highlighting bitcoin and its potential use cases in real estate.
According to event emcee and Meson.re CEO Ragnar Lifthrasir, the emphasis for his talk at AAR centered on how bitcoin could be used in the lucrative international real estate trade as it relates to California.
With Meson.re, he said, his business focus is on helping mainland Chinese investors purchase real estate in the US, though Lifthrasir argues the service provides a prime example of how bitcoin could increasingly play a role in the real estate industry at large.
Lifthrasir told CoinDesk:
“I think there’s understanding of the problem and why there’s a need in China. They immediately got it. There are two ways to buy [now], the black and the gray markets. The black market is you know someone who knows someone and the gray market is I don’t know how it works but they money gets there.”
Using these options, Chinese investors purchased $22bn in real estate in 2013, up from $10bn in 2011 and accounting for 25% of all US house acquisitions by foreign buyers. Much of this sales process today involves complicated workarounds that could be simplified with bitcoin.
As for its part, the AAR felt this use case relevant due to the attractiveness of California real estate to Chinese buyers, though it said it is agnostic on the technology.
“Bitcoin is in the media and in the news,” AAR CEO Andrew Cooper said. “We wanted to educate our members on how it’s being used for real estate so they can have it top of mind if their clients ask for more information.”
The big opportunity, he explained to an audience composed of real estate agents hoping to lure investors from China, lies with a Chinese law that limits wire transfers to $50,000 annually per person, a restriction not currently applied to bitcoin.
Lifthrasir noted that his audience was receptive to this broad message, but that he was asked sometimes tough questions about whether bitcoin could serve the needs of potential clients.
For example, he suggested that one participant asked if bitcoin potentially violated the spirit of the law, and would therefore be only a limited-time option for Chinese buyers.
Lifthrasir, however, rebuffed these concerns, noting that bitcoin is being used to circumvent capital controls in Argentina, Greece and other struggling economies.
“I wouldn’t consider it a gray market, what we’re doing is legal,” he explained. “You can buy as much bitcoin as you want and there’s no issue with that. We help clients acquire bitcoin and if they want to purchase the property we help them convert that into dollars.”
Lifthrasir compared bitcoin favorably to the current system, suggesting that existing alternatives could also be considered loopholes.
“You don’t have to compare us to perfection, just compare us to the other options,” he said.
While Lifthrasir isn’t sure every attendee walked away from the two-hour talk with a solid grasp on the topic of bitcoin, he expressed his optimism it could emerge as a viable solution given recent volatility in the Chinese markets.
“When I left the presentation I was disheartened, a lot of them didn’t get it,” he said. “[But] in the last few weeks we gained interest in what’s been happening in their stock market, freezing their ability to move in and out of financial instruments.”
Perhaps given this connection, Lifthrasir’s talk was profiled by Chinese-language news outlets, though its reports also hinted at the confusion of some talk attendees.
Meson.re has not yet facilitated any sales as a result of the event.
Still, AAR’s Cooper chose to emphasize that the conversation remains useful given that bitcoin is projected to penetrate international commerce and cross-border payments.
Cooper went on to suggest that increasing awareness is a solid outcome given that many people simply don’t understand bitcoin.
“Attendees weren’t necessarily into purchasing bitcoin on their own but wanted to learn how it would work in real estate,” he said, concluding:
“The feedback we got was tremendous.”
Hong Kong real estate image via Shutterstock