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Would You Pay More Than Double for a Waterfront Home?

If you want a water view then be prepared to pay more than double of the value of homes nationwide. Not surprisingly, the most expensive waterfront homes are in California and on the coast of Long Island Sound, and in Hawaii, while the most affordable can be found in the Midwest and in Florida.

The largest premiums for waterfront homes are found along the Great Lakes and in parts of Florida. Even though the premium for waterfront homes has increased, it has fallen overall since the peak of the housing market in 2007. Although having a waterfront home boosts its value to a certain extent, premiums vary across the country, and this report by Zillow points out that it can be difficult to put a precise figure as to how much more buyers will end up paying for waterfront properties.

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Zillow used its database of more than 100 million homes throughout the country, and analyzed the market for waterfront homes from 1996 to the present day. In doing so it was able to develop a unique Index for waterfront homes, both nationally and in cities. Homes were defined as being waterfront if they were located on lakes or ocean with 10 km² of surface area or more. Next the company looked at the difference between the values of waterfront single-family homes compared to all single-family homes in the area. It also identified where waterfront homes are most expensive in comparison to non-waterfront homes.

Just 20 years ago the median value of waterfront properties was 64% more than the median value of all properties, but today that has risen to 116%. The most expensive waterfront properties are in coastal California, with Laguna Beach top of the list at $10.1 million. If you want a waterfront home in Malibu then the median price is $6.3 million, while in Hermosa Beach it is $4.8 million.

Properties in Honolulu and Kailua in Hawaii are also pretty expensive. Prices are lower in Florida, as eight out of the nine cities with the cheapest waterfront properties are located in this state. Alternatively you could head to Conneaut in Ohio, where it is possible to buy waterfront property for around $117,000.

Zillow also examined the value of waterfront homes in cities and compared it to non-waterfront property, and this showed a huge difference between the two in certain cities. The largest premiums were to be found in Sarasota at 1132% and Riviera Beach at 1154%. However not all cities show these differences, as sometimes living on the water can be noisier, and there could be an increased risk of flooding.

Allison Halliday

Allison Halliday is a Realty Biz News contributing writer. She handles International Real Estate and is a seasoned blogger.

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