Remember when home prices were ridiculously cheap? Me neither. What is still fresh in many Americans' memories, though, is the crazy spike in the prices of homes during the COVID-19 pandemic.

Sure, the sizzling-hot housing market has cooled off somewhat. However, this could only be a temporary reprieve, according to Shark Tank star Barbara Corcoran. She predicts that we could have a COVID-like booming housing market back before you know it. 

Through the roof

Corcoran acknowledged in a recent Fox Business interview that higher interest rates have impacted the housing market. The Federal Reserve aggressively raised interest rates throughout 2022. Those rate hikes continued into this year, although the increases were more modest. 

She noted that individuals who might be interested in selling their homes are reluctant to do so. Potential buyers are afraid to purchase a house. And it's all because of high interest rates.

However, Corcoran believes that the Fed's rate hikes will soon end. She even anticipates that interest rates will again begin to decline. Corcoran told Fox Business, "The minute those interest rates come down, all hell's going to break loose, and the prices [of houses] are going to go through the roof."

How much could housing prices soar? Corcoran predicts that a 2% decrease in interest rates could cause home prices to jump by 20%.

Not all real estate markets will boom

Different geographical regions will probably be affected differently by lower interest rates. Some areas have already experienced major rebounds in their housing markets. Corcoran pointed out that housing prices have jumped in some cities in the Southwest and in South Florida.

She also stressed that it's important to differentiate the residential and commercial real estate markets. Just because housing prices rebound doesn't mean that office real estate prices will.

The COVID pandemic is still affecting the commercial real estate market. Many Americans began working from home during the worst of the pandemic and have continued to do so.

Corcoran noted that office vacancy rates remain high in most big cities and even in secondary markets, saying: "I don't see that turning around. I think it's going to be a bit of a bloodbath before it gets better."

Where to invest

Fannie Mae and the Mortgage Bankers Association appear to agree with Corcoran's view that lower interest rates could be on the way. The organizations project that the average 30-year fixed-rate mortgage rate will gradually decline into next year.

Are there opportunities for investors if these predictions prove to be correct? You bet.

The most obvious choices are pure-play housing stocks, such as LGI Homes (LGIH 1.02%). The company ranks as one of the fastest-growing homebuilders in the country. It focuses on entry-level homes and operates in many of the most attractive real estate markets in the Southeast and Southwest. 

LGI's shares have soared close to 40% year to date. However, the stock still trades at a reasonable forward price-to-earnings multiple of 19.

The Home Depot (HD 0.94%) stands out as one of the best picks-and-shovels stocks to buy with a potential housing rebound on the way. And that's not just because the company literally sells picks and shovels.

Homeowners preparing to sell their houses often have some fixing up to do first. With its more than 2,300 home improvement stores throughout North America, The Home Depot would likely see its revenue jump in another housing market boom.

For investors who don't want to try to select individual stocks, the SPDR S&P Homebuilders ETF (XHB 1.22%) could be a good alternative. This exchange-traded fund (ETF) owns positions in over 30 stocks with ties to the housing market, including LGI Homes and Home Depot.

Corcoran told Fox News that when the Fed lowers interest rates, "it's going to be a signal for everybody to come back out and buy like crazy." If she's right, investors who own shares of LGI Homes, The Home Depot, and/or SPDR S&P Homebuilders ETF just might profit like crazy.