Beachfront Properties: Rare Real Estate Locations With Increasing Property Values

William Huston, AIF®, AIFA®

"Every investment is a seed for the future. Impact investments are seeds for an equitable tomorrow."

William Huston, AIF®, AIFA®

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Beachfront Properties: Rare Real Estate Locations With Increasing Property Values

rare beachfront property

Picture this: waking up to the sound of gentle waves crashing against the shore, feeling the soft sand between your toes as you take a morning stroll along the beach, and soaking up the warm sunshine as you relax in your beachfront property.

It's no surprise that beachfront properties are some of the most coveted and desirable real estate locations in the world. With stunning ocean views, easy access to recreational activities, and a relaxed, laid-back lifestyle, it's no wonder that these properties come with a hefty price tag.

This blog post explores the allure of beachfront properties, why they're considered scarce real estate locations, and the rising prices that come along with them.

Key Takeaways
  • The allure of beachfront properties goes beyond their location and recreational benefits; owning a beachfront property is a symbol of status and luxury, attracting high-end buyers.
  • Factors that influence the price of beachfront properties include location, size, condition, view, and water depth. Water views are a significant factor that affects the price of waterfront property.
  • Investing in beachfront property can yield high ROI and provide a hedge against inflation and market fluctuations.
  • When choosing a beachfront property, consider market conditions, property management, economic growth, the local tourism industry, and location.
  • Owning a beachfront property can be a worthwhile investment, but it's important to carefully consider factors such as market trends, property maintenance costs, and potential risks.

The contents of this article are for educational purposes only. They are not intended to be a source of professional financial advice. You will find experts on financial planning, financial management, and real estate here. More on disclaimers here.

The Allure of Beachfront Properties

beautiful beachfront property

The allure of beachfront properties goes beyond their stunning views and access to recreational activities. For many buyers, owning a beachfront property is a symbol of status and a way to showcase their wealth. As a result, the beachfront property market has become part of the luxury market, attracting buyers who are looking for the ultimate in high-end living.

One of the most significant indicators of the allure of beachfront properties is the occurrence of bidding wars. With limited inventory and high demand, bidding wars can quickly drive up the prices of beachfront properties, often resulting in sales above the asking price.

These bidding wars can be intense and stressful for buyers, but they also demonstrate the immense appeal of beachfront properties and the lengths that buyers are willing to go to secure their dream home.

In addition to the prestige associated with beachfront properties, there are also several practical benefits. For instance, beachfront properties tend to have higher levels of natural light, increased privacy, and a greater sense of space compared to properties located in crowded urban areas.

Moreover, living by the ocean can have significant health benefits, such as reduced stress levels and improved respiratory health due to the high levels of negative ions present in ocean air.

Overall, the allure of beachfront properties goes beyond their stunning location and recreational benefits. The luxury market status, the occurrence of bidding wars, and the practical benefits of living by the ocean all contribute to the allure of beachfront properties.

Benefits of Waterfront Property

<img alt="child playing at the beachfront"" src="https://images.pexels.com/photos/16401259/pexels-photo-16401259.jpeg?auto=compress&cs=tinysrgb&w=400">

Living in a waterfront property is a dream come true for many people, and it's not hard to see why. Here are important benefits of owning a waterfront property:

1. Stunning Views

Waterfront properties offer breathtaking views of the water, from serene lakes to expansive oceans. The view alone can be a significant selling point for buyers looking to invest in waterfront property.

2. Access to Recreational Activities

Living near the water provides access to a wide range of water-based recreational activities such as swimming, boating, fishing, and kayaking. Waterfront properties often come with private docks or beaches, making it easier for homeowners to enjoy these activities without leaving their homes.

3. Improved Air Quality

Living near the water can also have significant health benefits, particularly for those who suffer from respiratory issues. The air near the water is cleaner and fresher than in urban areas, which can improve lung function and reduce the risk of respiratory diseases.

4. Increased Privacy

Waterfront properties often offer increased privacy due to their location away from busy roads and urban areas. This privacy can be particularly appealing for those who value peace and quiet and prefer to avoid the noise and congestion of urban living.

5. Potential for Investment

Waterfront properties have historically been seen as a solid investment due to their limited supply and high demand. As a result, waterfront properties tend to hold their value well over time, making them a potentially lucrative long-term investment.

In summary, waterfront properties offer numerous benefits, from stunning views and access to recreational activities to improved air quality and increased privacy. Whether you're looking for a peaceful retreat or a solid long-term investment, waterfront properties are an excellent option worth considering.

Why Are Beachfront Properties Considered Scarce Real Estate Locations?

rare beachfront location

Beachfront properties are considered scarce real estate locations due to a number of factors, including limited availability and high demand. With a limited supply of coastal land and strict zoning regulations, developers and builders face significant obstacles in creating new beachfront properties.

This scarcity drives up housing prices, making beachfront properties a luxury that only a select few can afford. Additionally, beachfront properties often offer desirable views, proximity to water-based activities, and a relaxed lifestyle, further increasing their appeal in the housing market.

What Factors Influence the Price of Beachfront Properties?

expensive beachfront location

The price of beachfront properties is influenced by a variety of factors, including supply and demand, location, property features, and economic conditions.


The location of the property is a critical factor in its value, with properties closer to City Dock commanding higher prices. Buyers can use Google Maps to estimate the value of a property using concentric circles with City Dock at the center.


The size of the property is another important factor, with larger homes generally commanding higher prices. Buyers should look for properties that match their needs, whether it's a small condo or a larger home to accommodate extended family or a work-from-home setup.


The condition of the home is crucial, with well-maintained homes commanding higher prices. Sellers should consider getting their homes show-ready before putting them on the market, while buyers looking for bargains may want to consider properties that need a little work.


Water views are one of the most significant factors that affect the price of waterfront property. However, views are subjective, and there may be trade-offs. For example, while a waterfront property on the Bay may offer the widest and deepest views, the bay's water can be shallow and rough, not ideal for larger boats with deep drafts.


Water depth is another crucial factor in the value of waterfront property. In certain locations such as the Bay area, a dock with 5 to 6 feet of water is considered "deep-water," but if you own or want to own a larger or deeper-draft vessel, you'll need a home with a deeper slip.

Falling Inventory

As inventory continues to fall, beachfront properties continue to increase in demand and prices. As more and more people are attracted to the allure of waterfront living, the limited supply has caused bidding wars and increased competition among buyers.

This has resulted in a significant increase in the average price of beachfront homes, making it a challenging market for those seeking to invest in waterfront property.

Additionally, the rising prices of beachfront properties have also had a ripple effect on the overall housing market, with some experts suggesting that it may contribute to the overall increase in home prices and home sales.

Mortgage Rates

Rising interest rates and mortgage rates can have a significant impact on the housing market, including the beachfront property market.

As mortgage rates increase, it becomes more expensive for buyers to finance their purchases, which can result in fewer buyers in the market. This can lead to a decrease in demand for beachfront properties, which may cause a decrease in housing prices.

On the other hand, if the demand for beachfront properties remains strong despite rising mortgage rates, then the prices may continue to rise as buyers are willing to pay a premium for these highly desirable properties.

Foreign Investors

The rise in price of beachfront properties may also be as a result foreign investors pushing property prices up.

Foreign investors have been identified as one of the factors contributing to the rise in house prices in certain markets including housing markets and luxury homes such as beachfront properties.

With their financial power and willingness to pay top dollar, foreign buyers are often able to outbid domestic buyers, leading to bidding wars and driving up beachfront property prices and home prices.

This has resulted in increased competition for waterfront property and home sales, making it challenging for locals to enter the sellers market.

Other Factors

Acreage is also a crucial factor in the value of waterfront property, with larger lots generally commanding higher prices.

Finally, economic conditions such as general housing demand, interest rates, inflation, and job growth can also have an impact on housing prices, including those of beachfront properties.

Overall, the price of a beachfront property is determined by a complex interplay of factors, both within and outside of the housing market.

The Potential ROI of Beachfront Property Investment

luxurious beachfront properties

Investing in beachfront property can be a wise financial decision with the potential for high returns on investment (ROI).

In the current housing market, beachfront properties are considered a luxury investment that can provide a hedge against inflation and market fluctuations.

A well-placed beachfront property can also generate significant income through short-term rentals or long-term leases, particularly in areas with a thriving tourism industry.

Working with knowledgeable real estate agents can help you identify opportunities in the market and make informed decisions about which properties are likely to provide the best ROI.

By carefully researching the market and working with a trusted advisor, investors can take advantage of the potential financial benefits of beachfront property investment.

Challenges of Owning a Beachfront Property: What You Need to Know

extreme weather conditions at beachfront property

Owning a beachfront property may be a dream come true, but it's not without its challenges. Here are some of the challenges you need to be aware of before investing in a beachfront property:

1. Higher Costs

Beachfront properties are often more expensive than properties located inland due to their location and the demand for them. Additionally, the cost of maintenance and repairs can be higher due to exposure to saltwater, which can cause damage to the property.

2. Insurance Costs

Insurance costs for beachfront properties can be significantly higher due to the risk of natural disasters such as hurricanes, flooding, and erosion. As a result, insurance premiums for beachfront properties can be several times higher than for inland properties.

3. Natural Disasters

One of the significant challenges of owning a beachfront property is the risk of natural disasters such as hurricanes, tropical storms, and flooding. These events can cause significant damage to the property and pose a risk to personal safety.

4. Extreme Weather Events

Even when there is no major natural disaster, beachfront properties are still exposed to the elements. Strong winds, heavy rains, and other extreme weather events can cause damage to the property, including erosion of the shoreline.

5. Distressed Sales

Another challenge of owning a beachfront property is the potential for distressed sales. If an owner falls behind on mortgage payments or property taxes, the property may go into foreclosure and be sold at a significant discount.

However, these sales may come with their own set of risks and may require significant repairs and renovations before they can be used or resold.

What is the Risk of Buying Beachfront Property?

beachfront property with economic risks

It's important to be aware of the risks of buying a beachfront property. As sea levels rise, beachfront properties may be at increased risk of flooding and erosion.

Furthermore, regulations on coastal construction are becoming increasingly strict, which may limit the ability to build or make modifications to the property.

Owning a beachfront property comes with its share of challenges, including higher costs, insurance expenses, and the risk of natural disasters and extreme weather events.

It's important to be aware of these challenges and to factor them into your decision-making process when considering investing in a beachfront property.

Finally, it's essential to consider the potential risk of buying a beachfront property and to do your due diligence to ensure that the property is a safe investment for you and your family.

How to Choose the Right Beachfront Property for You

beautiful beachfront property

Choosing the right beachfront property can be a daunting task, but there are some key factors to consider that can help you make the right decision:

1. Market Conditions

The first step is to research the local real estate market to determine whether it's a buyer's or a seller's market. A balanced market, where supply and demand are roughly equal, may be the best option for those looking to invest in a beachfront property.

2. Property Management

Another important consideration is whether the property has adequate management in place. If you plan to use the property as a vacation home or rental property, it's important to have a reliable property management company that can handle maintenance and repairs.

3. Strong Economic Growth

Look for areas with strong economic growth and job markets. A thriving local economy can help support property values and make it easier to rent out the property.

4. Tourism Industry

Consider the strength of the local tourism industry. If the area is popular with tourists, it may be easier to rent out the property and generate income from vacation rentals.

5. Location

Finally, consider the location of the property. Look for areas with access to amenities such as restaurants, shopping, and entertainment, as well as easy access to transportation.

In summary, choosing the right beachfront property requires careful consideration of market conditions, property management, economic growth, the local tourism industry, and location.

By taking these factors into account, you can make an informed decision and invest in a property that meets your needs and helps you achieve your goals.

Is a Beachfront Property Worth the Investment?

top beachfront properties

Certainly, a beachfront property can be a worthwhile investment for those interested in residential real estate.

Single family homes located in highly desirable beachfront locations have shown to appreciate in value over time, and the average price for beachfront properties has historically remained higher than the average price for non-beachfront properties.

However, it's important to carefully consider factors such as market trends, property maintenance costs, and potential risks before making a decision on whether or not a beachfront property is a good investment for you.

Bay Street Capital Holdings

Bay Street Capital Holdings

Bay Street Capital Holdings is a Black-owned, independent investment advisory, wealth management, and financial planning firm that manages portfolios with the goal of maintaining and increasing total assets and income with a high priority on managing total risk and volatility.

The founder, William Huston, is recognized as Investopedia’s Top 100 Financial Advisors for 2022. Bay Street was founded to advocate for diverse and emerging fund managers and entrepreneurs and was selected as a finalist out of over 900 firms across the US in the category of Asset Manager for Corporate Social Responsibility (CSR).