Why Are Waterfront Properties More Expensive?

Waterfront properties are any property located near a body of water, including lakes, rivers, and the ocean. Waterfront properties are highly desirable and given a choice, most individuals would choose to live near the water. But why are they so expensive?

Waterfront properties are more expensive than any other property due to the simple concept of supply and demand. Given a choice, most people would opt to live near the water. With this desirability in mind, the scarcity of waterfront property creates a disparity in supply in demand, naturally boosting the prices.

Numerous lifestyle factors create a demand for waterfront property, and people are drawn to the waterfront for several reasons. The price of waterfront properties is influenced hugely by several factors, and there are certain areas of the country where waterfront property is exceptionally more expensive.

Why Are Waterfront Properties More Expensive?

Waterfront properties can range anywhere from 146% to over double the price of an inland property. In areas such as Miami, the increased value can range from 38% to 104%.

Waterfront property is highly desirable for several reasons.

People are generally drawn to the water for its simple beauty. Views of the water are highly desirable, even more so if these views are unobstructed. Investors in waterfront property are often drawn to the fact that it would often be impossible for anybody to build in front of their property, thereby obstructing their views.

Proximity to a body of water creates feelings of tranquility and peace, and homes near the water often provide unparalleled privacy.

Lifestyle is often a major drawcard for living near the water, where individuals can enjoy their favorite water-related activities such as fishing and boating.

Given a choice, the majority of people would opt for waterfront living. This desirability translates to higher demand. Since there is not much waterfront land in the United States upon which it is possible to build, the scarcity combined with desirability naturally pushes the prices ever higher.

The higher price of waterfront property is also attributed to issues of demographics. Because the land itself fetches a far higher price due to the high demand and low supply, higher-paying clients are naturally drawn to these locations.

As a result, the houses built are often built for a higher-budget client, so they usually fall under the category of luxurious houses. Naturally, this combination of expensive land and high-budget buildings will create a much higher price for the area.

The desirability is affected by views, whether unobstructed or fully obstructed, proximity to water, direct water access, and outdoor amenities. Closer proximity to water and easy access to the water will result in a much higher property value.

Individuals who wish to live on waterfront property will prefer more direct access to the water for recreational purposes. If you can open the door and walk straight across to the water, the property will fetch a far higher price than if you had to walk a significant distance or make your way through a long path to get to the water itself.

Climate issues also play a major role in the prices of waterfront properties. Certain coastal areas, for example, suffer major storms and sea surges. Other waterfront areas may pose flood risks.

As a result, insurance costs are far higher for properties in these areas, pushing up the property price significantly.

This includes homeowners’ insurance and flood insurance if the property is located within a flood zone.

What Is Defined As Waterfront Property?

Waterfront property is defined as land or a dock area directly on a body of water such as a river, lake, or ocean.

The best part about purchasing this type of residence is that the views are permanent and indestructible, compared to buying in an area still being developed, where one cannot know what the view would be in a few years.

Another attractive aspect of a waterfront property is that it permanently feels like a vacation when at a waterfront residence.

Why Are Waterfront Properties More Expensive 00

Positive Aspects of Purchasing Waterfront Property

While waterfront property and the lifestyle associated with this type of home are extremely desirable, several downsides must be considered when investigating the purchase of a property of this type.

Firstly, waterfront property has an extremely high potential for value appreciation, showing consistent value growth compared to any other type of property in the country.

Demand for waterfront property continues to grow and remains consistently at the highest level of demand compared to any other property type.

Waterfront properties possess great investment potential in the Airbnb and short-term rental market. Especially during the holiday season, waterfront property is in high demand. Families and individuals flock to waterfront destinations throughout the summer seasons to enjoy many recreational activities involving water.

Due to this high demand during the summer season, waterfront properties can fetch a high rental, enabling investors to gain a prime return on their property investment.

Permanent views are another positive feature of waterfront properties. When purchasing a waterfront property, especially one located right on the water’s edge with nothing in front of you other than the water, there is almost no chance of further construction occurring in front of your property which may reduce your view.

This is different from construction in a city or suburb, for example, where your views are not guaranteed to last indefinitely as cities grow and develop.

Permanent views which are guaranteed not to change are a major selling point. This will always fetch a higher price and be guaranteed to give owners a higher return on their investments should they decide to sell in the future.

As attractive an investment as waterfront property may be, there are many downsides to investing in this property type that one should be aware of before making any major purchasing decisions.

Negative Aspects of Purchasing Waterfront Property

Besides the higher cost of purchasing waterfront property, several other pitfalls can be potentially off-putting to any prospective buyer.

The most prime waterfront locations such as Malibu, Manhattan Beach, California, the Hamptons, and Nantucket are guaranteed to have far higher costs than any other waterfront location.

There are many positive factors that encourage people to purchase properties in these locations, and they are highly attractive locations for several reasons. However, these prime locations come with a host of extra expenses that may not have been made initially obvious.

For example, many waterfront areas are subject to additional regulations which would not apply in inland areas. There may be rules that restrict what you can build, how you can build it, and the size to which you are permitted to build.

There might be certain restrictions that govern the permitted aesthetics of your specific design, dictating aspects of the design which you previously would not have had to consider. Design freedoms might be limited or taken away, restricting your ability to create the home that perhaps you had wanted to create, to begin with.

Privacy is another concern of waterfront properties. While some waterfront areas may provide remoteness and tranquility with absolute privacy, some areas may attract large crowds during the busy seasons.

Popular areas attract many visitors and become highly populated during the holiday seasons. This can quickly increase traffic through the area while simultaneously bringing strangers into the area. This can, in turn, create more foot traffic through waterfront areas which can negatively impact privacy for residents.

Due to their locations, waterfront homes often need special finishes and possess certain maintenance requirements that would not be required inland.

Special impact windows, for example, may be required in areas with high storm frequency and would add a substantial cost to the overall price of the property.

Is Waterfront Property A Good Investment?

Overall, waterfront property is considered a good investment due to its usefulness in many aspects.

Location is an important factor to consider, and so when choosing a waterfront property to purchase, one should consider its location according to the potential needs of its users.

Waterfront property that fetches the best return on investment is that which is located close to recreational amenities. These recreational activities are a major drawcard for visitors to the area. So the proximity of a potential rental property to such activities will ensure steady bookings for your investment property throughout the year.

For example, visitors interested in fishing may have specific preferences depending on the type of fishing they partake in and will therefore have specific requirements for choosing appropriate accommodation.

Some fishermen, for example, may prefer deep-sea fishing, while others may be more interested in offshore fishing near their chosen accommodation.

Popular beaches, restaurants, or parks will bring many visitors to these areas, and so it is important to consider your property’s location in relation to such spaces.

In addition to the ability to bring in an income from your waterfront property, ownership of such an investment can bring you and your family many years of enjoyment.

As the owner, you can choose to enjoy holidays on your property at any time, saving large amounts of money that would otherwise have been spent on holiday accommodation.

Where Is The Most Affordable Waterfront Property In The USA?

Gulfport, Mississippi

Gulfport Mississippi

Due to all of the attractions, the growing population, the culturally diverse population, and the magnificent scenic beaches and wetlands, Gulfport is one of the best cities in Mississippi with warm weather.

The second-largest city after Mississippi’s capital, Jackson, is famous for its great fun and entertainment. Gulfport is known for fishing and beautiful beaches and an aquarium, malls, fishing piers, and parks, among many other attractions.

In addition, the residents of Gulfport experience a far lower cost of living than the US average, with housing costing less than half of the US average. If one is interested in buying a home, the typical, expected home price is around $112,000 – $128,000. Alternatively, one can expect to pay $1,050 for monthly rent.

Chestertown, New York

Chestertown, 60 miles north of Albany, is a southern Adirondack lake town, has a population of around 500 people. While it is not a commercially popular holiday destination, it is just as beautiful as other lake towns and costs a fraction of the price.

It is economical and offers a large variety of activities and attractions, such as the Chestertown farmers market, trips to parks and lakes, and horseback riding.

Overall, the cost of living in Chestertown is about 6,4% lower than the rest of the USA, with housing being up to 22,7% lower. One can expect to pay at least $500,000 for a property right on the water or go for the option of sharing rights and expect the price range to start around $300,000.

This year, second-home buyers have flocked to the small lakes around Chestertown, accounting for almost 80% of the real estate market.

Palm Bay, Florida

Palm Bay Florida

There is never a dull moment in this Space Coast community, where visitors and residents alike may enjoy many activities and entertainment. Palm Bay is known for its many parks, including everything from nature preserves to cyclocross (bicycle racing) tracks and paintball fields.

It also has golf courses and several trails for running, cycling, and other activities. The experience is rounded up with waterfront eating and a plethora of shopping options.

Palm Bay is located in Brevard County and is considered one of Florida’s finest places to live. Palm Bay residents enjoy a sparse suburban charm, and the majority of homeowners own their homes. There are numerous parks in Palm Bay.

Overall, the cost of living in Palm Bay is about 10,1% lower than the rest of the USA, with housing being up to 23% lower. The median house cost in Palm Bay is $178,100, with rent ranging from $690 to $1,800.


Waterfront properties are in high demand, and for a good reason. The positives of living near a body of water often far outweigh any possible negatives.

Besides a high return on investment when referring to potential rental income, enormous benefits come with enjoying the use of the property as the owner.