Real estate — both in the real and virtual world — is increasingly expensive and, in some cases, even tied together.
A home dubbed the Beverly Hills Metahouse was recently listed for $9.4 million. What makes it unique is not its architecture or even the fact that the property has approved plans for a new house on-site — the current home will be razed — but that the buyer will have the option to purchase four parcels of land in Decentraland, a virtual marketplace, for $100,000.
The metaverse property is a replica of plans for the Beverly Hills home at 607 N. Arden Drive
Listing agent Rochelle Maize of Nourmand & Associates said she had the idea to tie the for-sale home in Beverly Hills to a metaverse property six or seven months ago, when she started to see more being written about the new virtual world.
“I’ve always been one to think outside the box in real estate, to learn different markets and diversify,” Maize said. “At first I was kind of scared of it, like, why do I need to read about this and it’s just so out there, but the more that I read about it the more I became intrigued.”
After learning more, Maize said “a lightbulb went off” and she decided to try the strategy of linking the property to one in the metaverse.
She began working with Santa Monica-based LEDY, which created the metaverse version of the home, to make that happen.
“I saw it as a huge marketing play, but I also saw the potential with it,” Maize said, referring to interest in the metaverse homes beyond just being a new marketing strategy.
Mark Emtiaz, Mark D’Andrea and Alex Yates founded LEDY last year. The company creates digital assets, a process that they kicked off with a virtual-world resort.
“There’s a lot of excitement about the metaverse,” D’Andrea said. “It’s a new space and it’s growing extremely rapidly. We’re seeing a lot of interest in these types of projects.”
And experts see future collaborations on the horizon.
“We hope that there would be further opportunities for us to work together and do the same thing,” Emtiaz said. “We are going to start seeing more and more real estate agents, sellers and buyers who see the value of combining the metaverse presence with the real-world presence”
Kerry Ann Sullivan, a partner at Pardee Properties, said she hadn’t done any work with metaverse yet and thinks “it will be interesting to watch what happens in Beverly Hills” with the metaverse house there.
Still, she thinks nothing will replace physical real estate, “With real estate, people are looking at something physical to house themselves in,” Sullivan said. “While this is cool…at the end of the day in residential real estate, you need something to cover your head. That is where the focus will be, but it’s definitely attention-grabbing and great for marketing and can be catchy and fun to play around with.
And while experts disagree about whether clients will want metaverse homes that mimic their real-world properties, most agree that the metaverse will grow in popularity as more people decide to invest in the new asset type.
The Metaverse
Real estate sales across the four biggest metaverse platforms — Sandbox, Decentraland, Cryptovoxels and Somnium Space— hit $501 million globally last year, according to data from MetaMetric Solutions.
This January, metaverse sales surpassed $85 million, leading MetaMetric Solutions to predict that investment in the sector could near $1 billion this year.
Piper Moretti, chief executive of Manhattan Beach-based The Crypto Realty Group, is a real estate agent by trade and has seen a lot of interest in buying homes using cryptocurrency. She said there is now interest in buying in the metaverse as well, and that people can even “make money flipping virtual land. There’s money to be made there.”
At the beginning of last year, the average parcel of metaverse land was priced at around $100, and by the end of the year it was $1,500, Moretti said.
“I see land getting more lucrative, more expensive, as it is here in the real world,” Moretti said. “We have crypto day traders now, you could be a full-time flipper in the metaverse, and I see that happening a lot more.”
Rob Dixon, who first found Decentraland while writing a science fiction story about five years ago, now owns eight parcels in the world and runs two districts: an amusement park and a market.
The amusement park has attractions, including one where people can ride a dragon. For the market, meanwhile, he is working on bringing in partners and even leasing out the space.
For his private parcels, Dixon, an artist, is creating a gallery.
“I am convinced of the potential. It’s definitely there,” he said of the metaverse and his decision to own land in it. “It’s going to be real stuff going forward, but we are definitely in the early days and I’m excited to see where we go.”
New concepts and roles
Maize isn’t the only real estate agent to notice promise in the metaverse.
Ania De Pourbaix and Jesse Ozar of The XO Group at Compass are working on metaverse real estate as well. Both operate in the L.A. area.
“We created a division out of our XO Group called the XYZ Group, which is dealing with all things metaverse real estate,” Pourbaix said.
The team has purchased a “meta mansion” that will be used as a virtual office space for the group. Ozar and Pourbaix said this is a way to interact with clients within the metaverse.
“One of the things that got us really hooked on this idea was not staying stagnant and always trying to look forward to the future,” Ozar said, adding that younger buyers are more comfortable with the idea of the metaverse.
“We see it becoming mainstream in the next few years,” Ozar said. “We want to be prepared to be the know-all resource.”
But some experts disagree on what the metaverse will mean for real estate agents.
Pourbaix said clients would “always need guidance.”
“The role of a real estate agent has changed from the holder of listings to now much more of an advisory role,” she said. “We plan on being the ones that can guide people.”
She said commissions would likely work the way they do now and be paid to agents for advising their clients.
Moretti, however, said Realtors “aren’t needed” for buying and selling in the metaverse.
“The whole idea of blockchain is to get rid of the middleman,” she said.
Future
Compass agent Aaron Kirman, who was No. 3 on the Business Journal’s list of top residential agents in L.A. with $1.2 billion in sales volume last year, said the metaverse would be “a major focal point” going forward.
“It’s a whole new destination for us and a whole new outlet of area, home and landscape. It’s the beginning of a new moment,” he said.
Discussing the metaverse’s prospects and future viability, Ozar said that it was not an if “but a 100% guaranteed when.”
Pourbaix added that the metaverse gives lower-income earners the ability to “own a version of a home.”
Ozar said that while there may be some concerns, the metaverse is here to stay.
“I recognize that there is a lot of fear and uncertainty and doubt within this landscape; you can kind of mirror it to Bitcoin,” he said. “It has a huge following, then catches on and there this massive exponential growth and then it has to have a generalized period of fallback…and then find its leveling and then starts to take off,” he said. “This metaverse might be changed like digital real estate is slowly going to be adapted. It’s not an if, it’s a when. I am really excited to see what it can blossom into and I know it’s going to be adopted whether people like it or not.”
Maize said she is interested in linking other listings to homes in the metaverse, depending on the price point.
“We’re definitely considering it, but it’s a cost,” she said.
Developing a home in desirable areas in the metaverse, she said, could cost around $100,000.
LEDY’s Emtiaz said the company had signed deals with another agent as well to work on projects and is in talks with others.
He sees the metaverse as the future.
“We’re in the early stages of how websites came about in the 1990s; if you talked about websites it was, ‘why would you need it,’ but now it’s the normal way of doing business and getting your brand up. That’s the way we see the metaverse,” he said.
