Wondering what makes the Palm Bay real estate market a great place to invest in 2022 or 2023. In this article, you’ll learn about the various trends that characterize the real estate market in the Palm Bay-Titusville-Melbourne MSA, so you can understand the investment potential.
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About Palm Bay, FL
Palm Bay is the largest and most populous city in Brevard County, Florida. Based on the most recent census, the city had a population of 119,760. It is also the principal city of the Palm Bay-Titusville-Melbourne Metropolitan Statistical Area (MSA).
With many attractions for out-of-town visitors, the city has evolved from a farming settlement to a thriving urban settlement. According to Center Square, Palm Bay has a thriving tech economy that employs approximately 16% of the working population.
Apart from having a future in tech, Palm Bay also has a reputation for being family-friendly and Brevard County’s public school system is among the finest in Florida. The city also enjoys proximity to many natural landmarks and infrastructure such as the Indian River and Interstate-95.
These factors have greatly enhanced the profitability of properties in the Palm Bay real estate market, causing home prices to appreciate over 180% within the last ten years.
Is Palm Bay, FL a Good Place to Invest in Real Estate?
The short answer is YES, Palm Bay is a great place to invest in real estate today! In addition to ranking as the second best-performing city in the US, Palm Bay has also been dubbed the “New Silicon Valley” because of its many technology companies and institutions.
Here are some of the reasons to invest in Palm Bay Florida real estate:
Lots Of New Construction Projects
According to the city’s website, there are over 30 new projects under construction, while 20 others are awaiting approval. Currently, 9 subdivision projects are underway in the city, and four are awaiting approval.
Some of these constructions are new residential apartments, some are public amenities such as the Brevard County Fire Station currently under construction. Other independent services are also under construction.
These upcoming projects are indications of a booming population and a thriving Palm Bay real estate market.
Low Cost Of Living
With a cost of living that is lower than the national average, Palm Bay is a good place to invest, especially in rental properties. The cost of living is affected by things like housing, healthcare, transportation, groceries, and other utilities.
Housing costs are the largest factor causing Palm Bay’s cost of living to be lower than the national average. Despite other factors being on par or slightly higher than the national average, Palm Bay Florida real estate is considerably cheaper than the national average.
When compared to other cities within the Palm Bay-Titusville-Melbourne metropolis, the cost of living varies widely. For example, even though Malabar and Palm Bay are neighboring cities, the cost of living in Malabar is significantly higher than Palm Bay’s. The cost of living is significantly higher in Grant-Valkaria even though the town borders Palm Bay.
Great Spot For Outdoor Fun
Palm Bay is a great place for outdoor activities. Featuring close to 30 parks and playgrounds, the city is a hotspot for Florida fun seekers.
You can enjoy kayaking in the Indian River Lagoon as well as in the Turkey Creek Sanctuary. Kayaking can also be enjoyed in other parks like Castaway Point Park.
The Turkey Creek Sanctuary offers a plethora of activities, including biking and hiking. There is also a nature center at the sanctuary, where you can see species such as pileated woodpeckers, turtles, and alligators.
The Palm Bay Aquatics Center is another place that offers loads of fun if you prefer artificial water bodies to natural water bodies. It offers swimming lessons, a water slide, and picnic tables for fun seekers.
If you’re in Palm Bay, you can also try golfing at the Majors Golf Course: it’s located in the Bayside Lakes area.
There are also beaches in the Palm Bay-Titusville-Melbourne metropolis such as Brevard Beach, Cocoa Beach, and Melbourne Beach. If you love visiting the beach, there are a plethora of options to pick from.
Home prices are rising, but still affordable.
Compared to 2-3 years ago, the prices of single family homes for sale in palm bay florida in Palm Bay has increased significantly as with the rest of the United States.
Home prices in Palm Bay have been rising steadily. Despite this, homes remain affordable, drawing new residents to the city.
Close to Orlando, Jacksonville, and Miami
Palm Bay’s location is another reason to invest in the city. The city is located in the east of Central Florida between Jacksonville and Miami in Northeastern Florida and Southeastern Florida respectively. The city is also southeast of Orlando in Central Florida.
The presence of establishments like Universal Studios and Disney World in Orlando has significantly impacted Central Florida and by extension, Palm Bay.
Since Palm Bay is near some of Florida’s largest cities, it is a popular spot for millennials seeking proximity to these areas without the hustle and bustle.
Palm Bay Real Estate Market Trends For 2022 & 2023
For Sale Inventory Will Rise Slowly
The Palm Bay real estate market has seen a significant drop in for-sale inventory over the last few years. In the months ahead, supply is expected to increase slowly and steadily, based on available data.
Thanks to its newfound status as a tech hub with a growing economy and an increasing population, Palm Bay has become the land of opportunity for home-construction investors. Generally, months’ supply of homes is increasing across the US according to data from the HUD.
But based on recent data, the inventory of single family homes for sale in palm bay florida is rising, albeit slowly.
Days On Market Will Rise
As the economy and real estate market recovered from COVID-19, the median days on market also decreased as more properties were selling fast. However, in the coming months, the median days on market is expected to increase.
The increasing population in the past 18 months led to increased demand for homes plus a decrease in for-sale inventory which ultimately led to a drop in the days on the market figure for the real estate market in Palm Bay. However, as for sale inventory rises, it is expected that there would be a steady rise in the days on the market.
Price Per Square Foot Will Decrease Slightly
Due to massive inflation in the US real estate market, prices per square foot for properties has increased since 2020. It is however forecasted that home price appreciation should cool off in the coming months. Some sellers will have to lower their prices to “more normalized levels” as fewer people buy houses. In Palm Bay and throughout the United States, this will result in modest decreases in prices per square foot.
Population Growth Will Keep Driving Rental Demand
With a population growth rate of about 1.4% annually, it is expected that the demand for rental properties will keep rising. Considering that most of the migration to Palm Bay in recent years has been from upwardly mobile individuals who are not in a rush to own homes.
With the recent establishment of high-tech companies in Palm Bay, there is a rising demand for rental properties in the city. This trend is expected to persist into 2023.
How To Buy Investment Property In Palm Bay
Here are some tips on buying investment property in Palm Bay.
Understand The Costs
Before you invest in rental properties, it is wise to prepare for the costs:
- Initial Costs: Apart from the selling price, the initial costs also include other costs like legal fees, stamp duty, landlord insurance, and other administrative expenses.
- Running Costs: You should note that as the owner of an investment property, the onus lies on you to keep the property in proper shape before you make any returns on your investment. Always keep in mind that you will bear the cost of fixing a leaking pipe, or faulty faucets, etc. To help you manage this cost, it is wise to get Landlord Insurance.
- Property taxes are another cost you have to keep in mind. However, property tax is based on the fair market value (FMV) of the property you own. Brevard County property tax rates are one of the highest in Florida with the county collecting an average of 0.87% of a property’s FMV as property tax.
- Rental costs such as legal fees for drawing up tenancy agreements, or costs that come up when the apartment is unoccupied.
Select The Right Property Type
There’s a lot to consider when choosing the right property type in Palm Bay.
The first thing you’ll want to look at is your budget. You will probably want to consider building or buying a home that can be rented out, instead of simply turning around and selling it after you’re done renovating it.
If you’re looking for more cash flow potential, then buying a new build-to-rent home could be a good option for you. These homes are usually part of larger communities that offer high end rental property management services. Your tenants have easy access to maintenance staff and other amenities like pools, fitness centers, etc. If you’d like to learn more about build to rent homes and communities, check out this article.
Get Flood Insurance
Make sure you have flood insurance for your rental property. Palm Bay is a participating community in the National Flood Insurance Program (NFIP) and the city is in Class 7 of the Community Rating System (CRS) which implies that residents can enjoy a 15% reduction in flood insurance from FEMA.
Use an In-State Attorney for Title Searches
Before buying a property in Palm Bay or any location, it is always advisable to carry out a title search to ensure that the property has a clean title. A title search will help you avoid losses you may incur from court injunctions and public record errors.
It is advisable to conduct a title search using a Florida-based attorney when buying property in Palm Bay. An attorney who is licensed to practice in Florida will be better informed about the body of laws that guide the Florida real estate market.
Calculate Potential ROI
In the US, the trend of rising prices and limited housing supply means it might take a while to find a resale rental that’d deliver a decent ROI in the first year. This is why many investors opt for build-to-rent homes, which offer more certainty in terms of cash flow.
You want to invest in a place where units are filled quickly, with very little issues in your first year. Ask your seller or builder for a pro forma projection or calculate your own by outlining gross rental income (projected income when the property is completely filled), NOI (net operating income, i.e income when all expenses are deducted) and cash flow (income from monthly rents).
New B2R Direct Products in Palm Bay with Huge Equity Potential!
We’re excited to announce a new product that we’ll be offering in Palm Bay soon. This new product will reduce your risk as an investor while providing you with the opportunity to capitalize on some serious appreciation opportunities. It all starts with buying a vacant lot in sunny Florida from B2R Direct.
How It Works
You purchase a vacant lot from B2R and take out a construction loan. B2R will act as your general contractor to build a 3 bedroom, 2 bathroom home. B2R will provide a draw schedule ahead of time.
You can refinance the loan into a mortgage for the property or you can sell the home for a profit.
How investors benefit:
You own the lot immediately and it is yours to do what you want with. If you choose to build with B2R Direct you’ll be looking at a total investment of $295,000. The current resale value for these new homes for sale in Palm Bay, Florida is $370,000. Your only risk is that you have to pay interest on the construction loan. However, you will end up with around $75,000 in equity as soon as the construction is completed.
Now you know what the Palm Bay real estate market has to offer you. Click here to sign up and view some of B2RDirect’s new construction homes in Palm Bay Florida.