Homes situated along the water sold for a 36 percent premium in the first quarter of this year, according to new data from Zillow
. This represents lowest recorded premium level since the second quarter of 2002, when the premium was 54 percent. The first quarter is also below the average premium of 41 percent that has been in place since 1996.
Zillow defines waterfront property as being immediately adjacent to a lake, river or ocean. The West Coast is home to the most expensive waterfront: a typical waterfront home in Los Angeles sells for just over $2 million, while similar properties in San Francisco, Seattle and San Diego are above $1 million.
"Buyers are willing to pay extra for features that add a unique benefit to a home, and being right on the water's edge is one of them," said Zillow Senior Economist Aaron Terrazas. "These homes are relatively rare, making up only a small portion of the housing market, and that scarcity keeps prices high. 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."