Ethereum mortgages (ETH) are one solution for San Francisco’s housing crisis. According to Bloomberg, San Francisco’s rent market has had to plummet in price after losing demand.
Many people upped and left to take advantage of their ability to work remotely. Amid the Covid-19 climate, the thriving tech city has sent many of its workers home to work remotely. San Francisco has experienced a 35 % decline in renting.
Danielle Hale told Bloomberg that tech companies are amongst the most flexible when allowing people to work remotely. The consequence of liberating employees to work anywhere they like is that they will flee to the suburbs where they can enjoy time with their family and enjoy lockdown walks, and save money.
It is unclear how much of an impact the flexible working conditions have had on demand for mortgages. There is likely less demand for mortgages because there is less of a need for people to live in San Francisco permanently.
In August 2020, CNBC said that San Francisco’s mortgage rates had hit an all-time low. What does not help San Francisco’s housing market is the sheer lack of housing supply, making prices high.
Around 60% of the people living in San Francisco said they could still not afford the housing prices. San Francisco’s housing market needs saving! Never fear, Sanfrancisco, Ethereum mortgages are here.
Ethereum mortgages came out as a concept in early May 2019 by fintech startup Fluidity. Fluidity’s idea was to have Ethereum powered mortgages in New York and California.
The company will use ETH coins and smart contracts for back end management. The idea was that ETH mortgages would have limited risk.
The borrowers pay back in dollars, so they do not have to engage with ETH and risk losing anything. Fluidity will not be able to impact the cryptocurrency at all because of its decentralized nature.
Borrowers would still need to present credit checks and personal information, which would be turned into a smart contract representing a mortgage. The mortgages can be sold as securities via the AirSwap exchange.
Ethereum mortgages help those who are discriminated against by banks as well as those who are low-income borrowers. ETH mortgages would be perfect for the people of San Francisco who are struggling to afford mortgages there.
The pricing for ETH mortgages would be better because there will be fewer external factors like domestic central bank governance policies and political trade winds. The prices of houses can be lower because ETH reduces costs, and this allows for more profit.
The ETH mortgages for people in San Francisco would be a game-changer as there would be plenty of incentive for people to buy a house. Given that San Francisco people are drawn there mostly because of the job opportunities, ETH mortgages would give people another reason to stay.
ETH mortgages are cost-effective, but they are more secure due to decentralization, and they also reap more rewards for the seller of the house and the buyer profit-wise. ETH mortgages could literally save the San Francisco housing crisis.