Is Cryptocurrency Going to Change Real Estate in Colorado?

We noticed that, earlier this year, a two-bedroom townhome in Arvada was on the Multiple Listing Service (MLS) as accepting crypto-currency in addition to traditional financing. This piece of news doesn’t exactly signal a sea-change in the housing market. Most buyers and sellers will use traditional financing and/or cash payment to buy a home and will continue to do so for many years. Yet, it also seems like we might be reaching the point where cryptocurrency isn’t going away. We’ve been reading and talking with some of our real estate friends about what this all means for the average Coloradoan. Most of their thoughts and comments surrounded two main points, one of them promising and one of them worrisome.


Getting Around the Banks—The big promise of cryptocurrency in the real estate market is the potential to reduce certain financial fees and to eliminate some of the closing costs altogether. In exchange for accepting cryptocurrency, the seller is helping to reduce the buyer costs and potentially get a better price for the home altogether. There are certain titling fees that may be unavoidable. You need the sale and deed recorded with the local county, after all. Verifying and transferring funds are a significant portion of the closing costs, nonetheless.


Opening the Colorado Housing Market to Foreign Investors—This is the one that has worried. Though certainly not the only ones, but arguably, the people who have the most to gain by getting around the banks are foreign investors who have the cash funds they need, just not in U.S. dollars. Creating a new segment of potential buyers would almost surely serve to raise property values even further. Now, this wouldn’t be bad for everyone, especially current Denver homeowners, but we worry that this development would make it that much harder for first-time home buyers.


We’ll be the first to admit we’re not exactly sure what the future of cryptocurrency is, much less the exact consequences on the real estate industry or individual buyers and sellers. And, of course, it’s not just tech-driven Denver or Colorado that will experience these changes. We’ve heard that there was already one home in Miami sold using cryptocurrency with more homes likely to follow the same path.


Most importantly, what we hope is that any major changes that are coming down the pike serves to make the Rocky Mountain lifestyle more accessible to more people. If it can make the real estate market more efficient by lowering the transaction costs for buyers and sellers, then that’s great. If this development also makes a huge swatch of Colorado’s Front Range some kind of haven for foreign investors looking to monetize our cherished lifestyle through tomorrow’s incarnation of AirBnB, then this leaves us feeling worried.