We are experiencing a crisis that reminds us of the great recession of 2008. However, the COVID-19 crisis is related to health and not to the real estate segment. Although many say this is an equal or worse crisis, the truth is that it is fleeting and some economies are already showing a reaction. The Florida real estate market, as the economy reopens, has been showing even better numbers. The pandemic has already ended in several European economies and the pent-up demand is beginning to show its face in several segments. This is the case of the real estate market in Florida!
COVID-19 appeared last year, suddenly. The state of Florida, heavily dependent on tourism, suffered the most. The city of Orlando, used to receiving tens of millions of tourists every year, has seen this number plummet. Everything happened very fast! And everything tends to return quickly, although we know that some sectors will bring permanent consequences and transformations.
The Subprime crisis in 2008 was due to several complex factors that preceded the bubble burst. It has been years and years that the backing of the titles has been corroded, silently and slowly. People bought houses that they couldn’t afford with high-interest loans. The borrowers were unable to resell homes at a higher price and banks refused to refinance when home values fell below the mortgage, leading to mass exclusion. It was a structural crisis, calling into question the fundamentals of the real estate sector.
Orlando’s real estate sector heated despite pandemic
The proof that one crisis has nothing to do with the other is the resumption of the real estate market in central Florida. The average property price in Orlando rose 7% in May, year-over-year. The indicator shows the market is increasingly heated, even during the pandemic. The great demand, for the time being, was due to the American public.
Were it not for the suspension of flights from Brazil to the USA, sales would be considerably more heated. The Brazilian investor is one of those that buys most in Florida. In the last few weeks, we noticed a high demand from Brazilians and Latin Americans in real estate. Some purchases are already happening, even virtually, since the physical presence of the buyer is not mandatory. Everything is done digitally.
“Even with the high dollar, the Brazilian investor prefers to invest in a strong currency, since political and economic uncertainties in Brazil persist”, explains Carlos Barros, international investment consultant in Brazil. “A further appreciation of the dollar is possible”, he adds.