Waterfront Property Premiums Receding

The price premiums for waterfront homes today are down to 36 percent from the high of 54 percent in 2012, and the average 41 percent since 1996. Nationally, these homes are worth $134 billion today.

During the housing recovery, prices for non-waterfront homes have bounced back to pre-recession highs, but waterfront homes have not, finds Zillow, possibly due to climate change and natural disasters. In 80 percent of the 10 major markets with the highest average sales premiums over the past 22 years, home prices have been low, or waterfront homes have been scarce as they are situated on smaller bodies of water. 

The characteristics of single-family homes on the water have changed little since 1996. The median-priced waterfront home sold in 1996 had two bathrooms, three bedrooms, was 40 years old and measured about 1,700 square feet. While getting slightly bigger, until 2018, the other characteristics for this median home did not change. The same is true for the median-priced non-waterfront home. However, while the median home on the water appreciated during those two decades by 160 percent on average, the landlocked home appreciated by an average of 100 percent.

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