Are Waterfront Homes Selling For Less?
There are two reasons home buyers typically have to pay more for a house on the water. The first is that people want to live on the water. It’s a desirable location. Secondly, there are a limited number of houses with water access. And when you combine high demand and low supply, you usually have a recipe for higher prices. But new research shows that waterfront property isn’t selling at as high a premium this year. In fact, waterfront homes in the first quarter sold for a 36 percent premium, which is the lowest level since 2002. By comparison, the average premium since 1996 is 41 percent and in 2012 the premium was as high as 54 percent. In other words, the difference in price between homes on the water and those further inland is lower than normal. But since having an ocean or lake view hasn’t become any less desirable, what might be behind this trend? Well one explanation is that a lower overall number of homes for sale has helped raise prices for homes all over, which has narrowed the price gap between waterfront and inland homes. More here.