Want to live by the water? It might cost you less now.
The extra cost for waterfront living is at its lowest level since the second quarter of 2002.
Homes along the water aren’t commanding as high a price as they used to, according to an analysis by the real estate site Zillow.
Waterfront properties sold for a 36 percent premium in the first quarter of 2018, according to the report. The extra cost for waterfront living is at its lowest level since the second quarter of 2002, and below the average premium since 1996 of 41 percent.
Across the country, waterfront homes tend to have higher prices than similar homes in the same area, but the gap has closed over the past several years. Typical homes in the United States have more than recovered from the recession, but waterfront homes have not.
Zillow defines waterfront homes as those where the homeowner can get to the water’s edge, whether it is a lake, river, or ocean, without leaving their property. This analysis compares sale prices for waterfront homes with homes in the same metro area that have similar physical features, but do not have waterfront access.
“These homes are relatively rare, making up only a small portion of the housing market, and that scarcity keeps prices high,” said Aaron Terrazas, a senior economist at Zillow. “With inventory as low as it is, buyers are spending more just to get into the market, which has narrowed the gap somewhat between waterfront homes and inland homes. Still, having waterfront access is incredibly appealing for many buyers, and even as environmental risk factors like rising sea levels and storm surges gain more attention and make some buyers more cautious in the homes they consider, the premium for waterfront homes is likely to endure.”
In Boston, waterfront homes sold for an 11 percent premium in the first quarter of 2018. Zillow lists the median home price for a waterfront property in Boston as $463,700, but the website defines Boston as “metro Boston,” so it includes Suffolk, Middlesex, Essex, Norfolk, and Plymouth counties, as well as Rockingham and Stratford counties in southern New Hampshire.
Christine Masiello, a realtor with Coldwell Banker Residential Brokerage in Newburyport, said she is seeing lakefront properties in her area “going for less and sitting,” but that’s not the case for riverfront and oceanfront properties; “both those are going for a premium.”
In Falmouth, Greg Kiely, vice president and brokerage manager for Sotheby’s International Realty, said he hasn’t noticed a lack of premium for waterfront, but “I would assume that’s more for the year-round communities than it is for our seasonal vacation markets.”
Jared Wilk, a realtor with Benoit Mizner Simon & Co. in Wellesley, said he had a listing last year in Waltham that was on the Charles River, and “the house went for way more than the local agent suggested.”
In Boston’s Seaport District, they have “no problem selling at top market,” said David Bates, a broker associate with William Raveis Real Estate and author of “The Bates Real Estate Report.”
The markets with the highest premium for waterfront living may surprise you:
| Metro | Median Value | Average Sales Premium Since 1996 |
Share of Homes |
| Jacksonville, Fla. | $633,700 | 72% | 0.27% |
| Cleveland | $463,100 | 68% | 0.12% |
| Denver | $843,100 | 52% | 0.04% |
| Baltimore | $361,300 | 52% | 0.04% |
| Milwaukee | $569,800 | 50% | 0.32% |
Waterfront properties are most valuable in Los Angeles, where the typical home on the water is worth $2,018,200. In three other West Coast markets – San Francisco, Seattle, and San Diego – the median value of a waterfront home is also above $1 million.
Buyers looking for a waterfront home will have the most options in Miami, where 5.9 percent of all homes offer waterfront living. Here’s Zillow’s complete data for waterfront homes across the country:
| Metro | Median Value | Average Sales Premium Since 1996 |
Share of Homes
|
| United States | $426,300 | 41% | 0.47% |
| Atlanta | $644,800 | 34% | 0.08% |
| Austin | $572,500 | 42% | 0.16% |
| Baltimore | $361,300 | 52% | 0.04% |
| Boston | $463,700 | 11% | 0.06% |
| Charlotte | $697,600 | 41% | 1.03% |
| Chicago | $279,000 | 21% | 0.21% |
| Cincinnati | $166,600 | 5% | 0.04% |
| Cleveland | $463,100 | 68% | 0.12% |
| Columbus | $372,300 | 41% | 0.10% |
| Dallas-Fort Worth | $410,300 | 41% | 0.08% |
| Denver | $843,100 | 52% | 0.04% |
| Houston | $364,000 | 35% | 0.30% |
| Indianapolis | $493,000 | 42% | 0.16% |
| Jacksonville | $633,700 | 72% | 0.27% |
| Kansas City | $379,000 | 31% | 0.09% |
| Los Angeles-Long Beach- Anaheim |
$2,018,200 | 14% | 0.05% |
| Memphis | $398,300 | 6% | 0.08% |
| Miami-Fort Lauderdale | $369,300 | 38% | 5.86% |
| Milwaukee | $569,800 | 50% | 0.32% |
| Minneapolis-St. Paul | $483,500 | 32% | 0.13% |
| Nashville | $381,300 | 22% | 0.08% |
| New York / Northern New Jersey |
$665,700 | 26% | 0.18% |
| Orlando | $357,600 | 27% | 0.70% |
| Philadelphia | $185,400 | 9% | 0.03% |
| Phoenix | $413,600 | 29% | 0.11% |
| Pittsburgh | $153,300 | -11% | 0.04% |
| Portland | $625,900 | 24% | 0.22% |
| Riverside | $446,200 | 25% | 0.38% |
| Sacramento | $763,100 | 47% | 0.35% |
| San Diego | $1,014,800 | 27% | 0.72% |
| San Francisco | $1,175,000 | 8% | 0.48% |
| Seattle | $1,024,300 | 47% | 0.66% |
| Tampa | $496,200 | 39% | 3.31% |
| Virginia Beach | $487,700 | 36% | 0.97% |
| Washington, D.C. | $469,500 | 30% | 0.13% |
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