The inventory issue is permeating to properties on the waterfront.
Access to a beach or dock is expensive, but less so now than it was in recent years, according to an analysis newly released by Zillow. In the first quarter of the year, the average homebuyer paid a 36 percent premium for waterfront; in the second quarter of 2012, that figure was 54 percent. The additional expense is the lowest since 2002.
Why the comedown in cost? According to Aaron Terrazas, senior economist at Zillow, buyers are forking over more to overcome the shortage of supply, which is closing the gap between homes on and not on the waterfront—and, beachfront homes are lagging others in regaining value.
“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,” says 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.”
Despite the gap slimming, the additional cost is high in many markets. According to the analysis, Jacksonville, Fla., has the highest premium for waterfront, at 72 percent, followed by Cleveland, Ohio, at 68 percent, and Baltimore, Md., and Denver, Colo., both at 52 percent.
“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.”
For more information, please visit www.zillow.com.