Why Does Waterfront Property Cost More?


If you take two houses that are exactly the same but one of them is located on a waterfront property and the other is located inland, the home that is located on the waterfront will have a value that is more than twice as high as the other home. The residences are identical to one another. The only variation is the location, however the pricing is significantly different between the two options. Do you ever ponder the reason for that?

Basic Supply and Demand

The level of value is determined by supply and demand. When there is a low level of demand for an item but a high level of supply, the price of that item will be low. If there is a high demand for an item yet there is a limited supply, then the price will be higher. There is a significant amount of interest in waterfront properties because of the widespread perception that they are attractive. In spite of the fact that the United States has a great deal of water, there is a very limited amount of buildable land along its coastlines. Therefore, there is a limited supply of beachfront property. The combination of strong demand and limited supply drives higher prices.

Why Waterfront Homes Are Desirable

Many people’s ideal life involves being physically located next to a body of water. There is the scenery, the peace and quiet, and your own personal space. However, there is also a whole way of life that comes along with choosing to live on the sea. Living on the water allows you the opportunity to participate in your favourite water sports whenever the conditions are favourable, whether you choose to go paddling, swimming, sunbathing, or boating.

Property in San Francisco

One of the reasons why real estate in San Francisco is so expensive is because of the city’s proximity to the ocean. San Francisco is also known as the “City by the Bay.” Building upward is the most efficient method for increasing the city’s housing stock due to San Francisco’s location on a peninsula, which has a restricted amount of land available for development. However, local rules often place limits on the height of buildings. In some areas, the maximum height of a structure is limited to forty feet. Residents of San Francisco have also voted in referendums to restrict the height of buildings. The goal of these measures is to ensure that no public area or park is shaded from the sun by nearby structures. In San Francisco, there is a high level of demand, but the city’s rules often limit the construction of more homes, which keeps prices high.

Some Waterfront Properties Cost More Than Others

The term “waterfront property” may apply to land that is located on either the ocean, a lake, or a river. For instance, it does not relate to land that is situated on a stream that is so shallow that it can hardly be called a creek. But it still leaves a lot of room for uncertainty. As of 2017, Malibu and Manhattan Beach, both located in California; the Hamptons, located in New York; and Nantucket, located in Massachusetts are among the most expensive beach towns in the United States. Gulfport and Biloxi, both in Mississippi; Pensacola and Port Arthur, both in Florida; and Port Arthur, in Texas are among the coastal towns with the lowest average prices.

Luxury Homes

There are many levels of housing available, such as starter houses, residences for those looking to move up, and luxury properties, with the latter commanding the highest rates. Therefore, it should not come as a surprise that luxury residences are the ones that are most likely to be constructed along prime lakefront land. The market demography that is most likely to be able to afford the higher price of a luxury property can also most likely afford the higher price of a home that is located on the water.