Thanks to Covid-19, a new long-term housing market boom is upon us. According to Forbes, housing and economic cycles used to last five to seven years. However, due to several factors, the economy has shifted to longer cycles of seven to ten years. The National Association of Realtors released a report showing that sales of previously owned homes in 2020 were at the highest level since 2006. Here are some factors to believe that another long cycle is upon us:
1- An economic recovery
The pandemic affected many businesses and livelihoods. The housing market was one of the few areas of the economy that didn’t suffer a significant downturn due to Covid-19. Although many areas of the economy did suffer, there will be an inevitable economic recovery. Because of this, the housing market will continue to thrive.
2- Historically low interest rates
In addition to economic recovery, the federal government’s monetary response to the pandemic will continue to fuel the housing market. An example is historically low interest and mortgage rates. This has begun to drive up housing prices. In addition, according to Forbes, the Fed is signaling that the rates will remain low.
Technology is a big factor helping to improve the real estate industry as a whole. As the digital real estate infrastructure continues growing, the industry will see even more growth. Technology will continue to allow more participants to enter the housing economy in very unique ways.
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