Shoreline Property Price is Receding, What is Moving People Inland?
Multiple factors are considered when homeowners are deciding where to buy or build their next perfect home. Employment rates, educational opportunities, climate, commuting needs, and other issues are usually important for those looking for new real estate. However, one trend seems to have remained solid, even as economic and cultural climates have changed. Dreams of waterfront living have always held strong.
Until now, that is. Homes near the water used to bring in a high premium, as high as 74%, but averaging around 41% since 1996. However, these homes commanded only a 36% premium during the first quarter of 2018, down from the highest average of 54% in the second quarter of 2012. So why the decline?
According to Zillow, who released these numbers as part of a study last week, there are several contributing factors. While these properties maintained their appeal during the bust, they have yet to return to their pre-recession highs. With the rest of the housing market is strong right now, these locations still enjoy a premium, just a more subdued one.
Mother Nature is also playing a role in keeping people away from shorelines. Rising sea levels in response to climate change is biting the waterfront property market, as well as erosion associated with sea level change. The increase in numbers of catastrophic hurricanes and its correlated fear factor most likely play a role as well. It’s possible that personal tastes change, of course, but it doesn’t seem likely that beach lovers have suddenly fallen out of love with the ocean.
The more logical answer appears to be the growing dangers of living near the water, especially with growing rates of flooding across the country. A report by the Union of Concerned Scientists estimates that homes all over the United States with a total value of $117.5 billion can expect that risk to continue to rise over the next 30 years. And with most consumers considering their home an investment, it makes sense that the strain on the pocketbook might be quieting the call of the sea.
