[avidiax]

I've had a similar idea, just that you sell your (desirable, fully repaired) home to a housing credit union in exchange for a number of shares in that union, and move out immediately or pay rent at your discretion.

The shares are publicly traded, and can be used to discount the rent or purchase price on other available properties in the union.

So you gain liquidity, diversification, and fractional ownership at the cost that the union needs to defend the total value of the tranche (so requiring repairs, not buying risky property), and it may be difficult to adjust the relative values of the properties in the tranche to reflect market conditions.

All of this sounds perfectly legal under current frameworks, and doesn't require getting an algorithmic appraisal perfect or creating a new type of coin.

[pontifier]

You still need appraisals of some sort because no home is the same as any other, and the shares are basically the "coin".

The benefit of doing it algorithmically is that the algorithm can be updated periodically based on the time to re-sell so that it can take into account more diverse information.

As long as the appraisal is within 5% you're doing better than agent based sales, and you should get at least a 10% bump in value just for the instant liquidity factor.

I'm imagining a super fast drone appraisal process in which the entire house is scanned from every angle, and the condition of each part of the building is examined. Every facet of the property would be quantified, and objectively measured when doing the algorithmic appraisal. It could actually serve as a guide to what types of repairs will increase the value, and where maintenance is needed.

I see house flippers loving this system, so there is no need to restrict it to only homes in good repair. Contractors will be able to buy homes that need work, do work that actually increases the value as described in the appraisal system, then sell it back instantly when the work is done.