A list of cities in Florida is dominated by Miami and Orlando. However, Florida is a massive state. And you can find better opportunities on the long stretches of coastline that we rarely think about except as on the highway to the hotter real estate markets. On I-95, we find Melbourne, Florida. Is Melbourne, Florida a good place to invest in real estate?
Let’s learn more about the city before we say whether or not you should invest in the Melbourne FL real estate market. The Melbourne area seems to be a growing spot in Florida. It is home to around eighty thousand people. The Melbourne FL housing is much larger than this, because the city is part of the Melbourne – Palm Bay – Titusville metro area.
This places the Melbourne housing market in a metro area home to more than half a million people. That’s sizable in its own right, and it makes Melbourne part of the tenth largest housing market in the state of Florida. Price increases haven’t seemed to affect the market, leading homeowners to be able to sell their home quickly in Melbourne. The real estate appreciation rate in Melbourne in the latest quarter was around 1.82% which equates to an annual appreciation rate of roughly between 7% to 8%. This can trigger a massive interest in the Melbourne real estate investment.
Even small changes in the appreciation rate can change the long-term value of buying considerably. For sellers, a nice profit is on the horizon. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Please note that there are many variables that can potentially impact the value of a home in Melbourne (or any other market) and some of these variables are impossible to predict in advance. In this article, our focus will be on the current state of the Melbourne real estate market and how it can affect the investors and home buyers.
Melbourne FL Real Estate Market Forecast 2020 – 2021
Melbourne Real Estate is one of the most affordable in the state. What are the Melbourne real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. Since 2015, the median home prices in Melbourne have appreciated by roughly 45.5% from $162,000 to $235,759, according to Zillow’s index.
In the past year, the Melbourne real estate appreciated by 2%. The latest Melbourne real estate market forecast is that the home prices will continue to increase by 3.7% – in the next twelve months. The latest real estate data from Zillow shows that the current median home value in Melbourne is $235,759. Melbourne is currently a warm seller’s real estate market. The demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. In other words, there are less homes for sale than there are buyers in the marketplace. Zillow reports that 19.3% of the listings in Melbourne had a price cut in Jan 2020.
Here is the Melbourne, FL real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 3.7% till Feb 2021.
Melbourne FL Real Estate Market Trends
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Melbourne area from multiple sources and compare it with past couple of years. We shall mainly discuss about median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region.
Melbourne is a minimally walkable city in Brevard County with a population of approximately 75,624 people. In the past ten years, the annual real estate appreciation rate has amounted to 5.30% in Melbourne, according to NeighborhoodScout.com. High demand and low inventory is leading to the rise in home prices in Melbourne. Currently, the inventory remains low and the prices will continue to rise for the next twelve months.
On average, homes in Melbourne, FL sell after 68 days on the market. The trend for median days on market in Melbourne, FL has gone down since last month, and slightly down since last year. In a healthy, balanced market, it would take about six months for the supply to dwindle to zero. In terms of months of supply, the Melbourne market can tip to favor buyers if the supply increases to more than six months of inventory. However, looking at the current trends, we don’t see things stopping anytime soon. The inventory will decrease further and there may be an increase of 2 to 3 percent in home prices.
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units. With 2020 being, theoretically, in the middle of a boom, there’s still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
According to Neighborhoodscout.com, a real estate data provider, three and four bedroom single-family detached homes the most common housing units in Melbourne. Other types of housing that are prevalent in Melbourne include large apartment complexes, duplexes, row houses and homes converted to apartments. The median house price in Melbourne is $214,521, which indicates that home prices in Melbourne are well above the national average for all cities and towns in the United States.
Here is a snapshot that shows the median home values in the some of the popular neighborhoods in or around Melbourne.
Melbourne FL Real Estate Inventory And Sales Data
Melbourne has a mixture of owner-occupied and renter-occupied housing units. In the past month, 235 homes have been sold in Melbourne on Redfin.com, a national real estate brokerage. Additionally, there were also 163 condos, 153 townhouses, and 0 multi-family units for sale in Melbourne last month. The median listing price is around $275,000. The average sale price of a home in Melbourne was $245K last month, up 11.4% since last year. The average sale price per square foot in Melbourne is $147, up 8.9% since last year.
According their statistics, the Melbourne housing market is moderately competitive. Homes sell for about 3% below list price and go pending in around 70 days. A hot listing in the market can sell for around list price and go pending in around 42 days.
Trulia has currently 3804 resale and new homes for sale in Melbourne, FL, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median sales price of homes in Melbourne is $242,000 and homes are selling for about $143/sqft.
Currently, there are 404 homes for sale in Melbourne on Zillow, an online real estate database company. Additionally, there are 85 homes for rent. Under potential listings, there are about 0 Foreclosed and 110 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
- The median list price per square foot in Melbourne is $119, which is lower than the Palm Bay-Melbourne-Titusville Metro average of $120
- The median price of current listings is $269,000.
- Th median price sale price is $246,300.
- The median rent price in Melbourne is $1,475, which is lower than the Palm Bay-Melbourne-Titusville Metro median of $1,495.
There are currently 1252 homes for sale and 211 homes for rent in Melbourne on Realtor.com, a real estate listings website. According to their statistics, in February 2020, the Melbourne housing market was a balanced real estate market, which means there was a healthy balance of buyers and sellers in the market. Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Melbourne have managed to hold good leverage in these negotiations in the past month. On an average, they could sell homes for 97.81% of the asking price. A seller would always prefer scenarios which can yield a ratio of 100% or higher.
- In February 2020, the median list price of homes in Melbourne was $278,500, trending up 3.2% year-over-year.
- The median sale price was $255,000.
- The median listing price per square foot was $154.
- The median rent price was $1,500.
Single-family detached homes the most common housing units in Melbourne, FL. The asking price of single family homes in Melbourne can start from $75,000 and can go up to $2.45M for a luxury property located in the neighborhood with zip code 32934. Pineapple District has a median listing price of $439,300, making it the most expensive neighborhood in Melbourne. Mallards Landing is the most affordable neighborhood, with a median listing price of $108,200.
|Homes For Sale||1252|
|Homes For Rent||211|
|Median Listing Price||$278,500|
|Median Sale Price||$255,000|
|Sale to Asking Price Ratio||97.81%|
|New Construction Houses||185|
|Median List Price/Sq Ft||$154|
|Home Price Range||$6.9K to $5.4M|
|Most Expensive Neighborhood||Pineapple District|
|Most Affordable Neighborhood||Mallards|
Melbourne, FL Foreclosures And Bank Owned Homes Statistics 2020
As per the Melbourne foreclosure data by Zillow, the percent of delinquent mortgages in Melbourne is 0.8%, which is lower than the national value of 1.1%. The percent of Melbourne homeowners underwater on their mortgage is 4.8%, which is lower than Palm Bay-Melbourne-Titusville Metro at 4.9%.
There are currently 208 properties in Melbourne, FL that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 818. In February 2020, the number of properties that received a foreclosure filing in Melbourne, FL was 50% higher than the previous month and 17% lower than the same time last year.
|No. of Foreclosures in Melbourne||208 (RealtyTrac)|
|Homes for Sale in Melbourne||818|
|Median List Price||$249,900 (0% rise vs Jan 2019)|
In Melbourne, the zip code with the highest foreclosure rate is 32901, where 1 in every 1897 housing units is foreclosed. 32934 zip code has the lowest foreclosure rate, where 1 in every 3903 housing units becomes delinquent.
Is Melbourne, FL a Good Place to Invest in Real Estate?
Now that you know where Melbourne is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Is Melbourne a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Melbourne is good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2020.
If you are looking to make a profit, you don’t want to buy the most expensive property on the Melbourne real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Melbourne that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
Let’s take a look at the number of positive things going on in the Melbourne real estate market which can help investors who are keen to buy an investment property in this city.
Melbourne Real Estate Prices
On average, the cost of living in the Melbourne area is 90, where the national average is 100. However, the Melbourne FL real estate market is relatively expensive. This means that the cost of living in very affordable if you don’t have to worry about rent or mortgage payments. The average home in the Melbourne housing market costs around 230,000 dollars. That is close to the average home price in Florida, but that average is skewed upward by overpriced markets like Miami and Orlando.
This makes Melbourne real estate investment relatively affordable for a desirable Florida housing market, and it makes it cost-competitive in every way. Buy two or three Melbourne real estate investment properties for the price of one condo in Miami or Orlando or several homes in California. A rough rule of thumb for the Melbourne housing market is to multiply the square footage by 120 dollars to determine the value of the property.
The value of Melbourne real estate investment properties is relatively stable. Home prices increased two percent in 2019. They’re projected to increase three to four percent in 2020. The average rent for a 800-900 square foot apartment is around 1100 dollars a month. That means you could charge two thousand dollars or more for Melbourne real estate investment properties in the suburbs. Demand for rented out Melbourne real estate investment properties is better than average, because roughly half of the population owns while other half rents. This is not as high as Miami’s rental rate, but it also means that there won’t be a tenant’s union and demand for rent control in the near future.
The Job Growth in Melbourne
Melbourne is located sixty miles southeast of Orlando, Florida. It is located on the “Space Coast” of Florida. This area is home to the Kennedy Space Center and Cape Canaveral. This contributes to the relatively large number of high-paying, high-tech jobs in the area. The city is home to a number of defense employers, too, from L3 to Northrup Grumman to DRS.
The city is also home to Orlando Melbourne International Airport, and there are a variety of logistics and aviation firms in the area. As a regional services hub, it is home to several hospitals and schools. The area unemployment rate is between four and five percent, enough to prevent rapid inflation in home prices but not so high that home prices will fall. This gives the Melbourne housing market greater stability than areas reliant on tourism.
Quality of Life
Areavibes gives the area an A+ for amenities and safety but D for housing prices. The schools receive the highest rating of A+. For comparison, the job market was only a B, though weather was an A. Then again, this area does enjoy a sub-tropical climate. It rarely freezes, but it isn’t as hot as south Florida. One point in favor of Melbourne real estate investment is that people move here from Orlando for quality of life as well as for work.
The Tax Climate
The tax climate in the Melbourne FL real estate market is as favorable as the weather. Florida doesn’t have an income tax. They make up for this in property taxes and sales taxes. Sales taxes don’t affect the value or ongoing costs of an investment property in the Melbourne FL real estate market. Property taxes are the only concern, and the Melbourne FL real estate market offers a relative bargain here. The average property tax rate in the United States is around 1.1 percent.
The average property tax rate in Florida is 1.0 percent. The property tax rate in the Melbourne housing market is roughly 0.9 percent. And this relatively low property tax rate is applied to the reasonably priced Melbourne FL real estate market. This results in an average property tax bill of around two thousand dollars a year. This is several hundred less than you’d pay for a comparable property in Miami-Dade. And the slow appreciation in the Melbourne housing market means you won’t be hit with a sudden tax increase as they saw in Miami in 2019.
The Legal Climate
The state of Florida is generally landlord friendly. The state doesn’t limit the size of the security deposit, though it says you must return it within a month of someone leaving. There is no limit on late fees for the rent. Tenants have three days to pay overdue rent in the Melbourne housing market. At that point, the property owner can file for eviction. The only exception is when there are major repairs necessary; the tenant can withhold rent in these cases.
Tenants can be evicted for intentional destruction of the unit or other tenant’s property. You can also evict people for multiple lease violations. If you file an unconditional quit notice on that basis, they have seven days to move out before you can file for eviction. The courts generally side with landlords in eviction cases.
Florida has state laws that prohibit rent control. This protects property owners from being told they can’t charge market rent that covers their expenses. For the worst case scenario, see New York and Oregon’s recent rent control and tenant protection legislation.
Investing in Melbourne Real Estate: Advice For New Buyers
Maybe you have done a bit of real estate investing in Melbourne, Florida but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. The Melbourne real estate market is steady, stable and generates reliable income. Properties here would make a great addition to a real estate investment portfolio, especially if you want to offset the risk of investing in tourism dependent areas like Orlando or Miami.
A good cash flow from Melbourne investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Melbourne real estate investment opportunity would be a key to your success. If you invest wisely in the Melbourne real estate, you could secure your future.
The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Melbourne investment real estate and you should be able flip it for a lump sum profit.
The neighborhoods in Melbourne must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools and shopping malls. Some of the best neighborhoods in Melbourne, Florida are The Sanctuary, Big Pine, Palm Bay, Ocean Shores, Lake Washington, Seaside, Latana Oceanfront, Mid Reach, Live Oak, Indialantic by the Sea, Lansing Island, Cypress Springs and Sheridan Woods.
As with any real estate purchase, act wisely. Evaluate the specifics of the Melbourne housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Melbourne. If it is your first time to invest in Melbourne real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your own research or hiring a real estate investment specialist for guidance.
Other Hot Markets In Florida To Invest In Real Estate
Apart from the Melbourne real estate market, you can also invest in another hot market in Ocala, Florida. Ocala is an affordable real estate market for investors who can still reap a decent return on investment. The area has recovered from the Great Recession, and a number of factors will insulate it from a future downturn. The Ocala housing market is buoyed by several nearly recession proof industries. It is quite affordable for investors compared to the rest of Florida markets like Tampa where the median home value is $221,500. The median home price in Ocala is around $163,179. You can buy several homes in the Ocala FL real estate market for the price you would of one mid-market condo in Miami.
Also, given that this is Florida, it shouldn’t be surprising that retirees are a disproportionately large source of demand for Ocala rental houses. The large number of retirees here creates significant demand for medical professionals and caregivers. The horse-centered community offers a number of good paying jobs to trainers, veterinarians and animal caregivers. There are several manufacturers in the area such as mobile home manufacturers and an EMS vehicle maker.
Another market that we suggest is the housing market in Lakeland, Florida. The Lakeland FL real estate market presents the perfect balance of currently affordable real estate for buyers and future growth. We can expect the population of the area to grow rapidly, and the renting population will grow even faster. The time to buy real estate in Lakeland is now. While the Lakeland FL real estate market is cheaper than Orlando and Tampa, it is not a good overall value given the lower average wages of its residents.
That explains why U.S. News and World Report gave the city an index score of 5.5 out of ten. This is due to the average resident earning around $23,000 a year, several thousand less than the U.S. average. Median household incomes are no better. The median household income in Lakeland, Florida is around $40,000, more than ten thousand dollars below the national average. This creates strong demand for Lakeland rental homes, especially those that low income residents can afford.
Let Us Help You In Buying Your First Investment Property
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
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All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching top real estate growth markets and structuring complete turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Remember, caveat emptor still applies when buying a property anywhere. The aim of this article was to educate investors who are keen to invest in Melbourne real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
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