Is Living Near the Water Worth the Cost?


Many people fantasize of one day owning that dream beach house. The one where you swing open the grand French doors in the back and within steps your toes are sinking into the sand. Or maybe the one where you sit out on the back deck and admire the view of the sunset sinking into the Pacific. But of course, what holds most people back from living that fantasy is the exceptionally high cost of waterfront property. But just how much more does it cost to live near the water? And is that added cost worth it?

The Price

A new study by Zillow reports that a waterfront house in San Diego costs 240% more than the median-priced home. To be clear on what constituted “waterfront” property, Zillow defined it as a home located within 150 feet of the waterline, separated only by a road with a speed limit of less than 25 miles per hour. What that translates to locally is most of the properties in the Mission Bay area as well as around the San Diego Yacht Club on Shelter Island. This study, however, is a bit limiting, as there are still hundreds or additional beautiful properties in the San Diego area that are near the water and/or have a breath-taking view of the ocean, like the Bird Rock area of La Jolla for instance, that is situated on a cliff overlooking the Pacific.

According to Zillow, the median value of a San Diego waterfront home is $1,924,500. That’s nearly 3.5 times the median for all other single-family homes. This gap in price is the second-largest in California (behind only Long Beach) and seventh-highest in the country. Zillow, however, is not always the most reliable source of housing prices. If you are in the market for a house in San Diego, the better source of information is an active, experienced real estate professional who is out in the field every day, seeing what is available, selling, and at what price.

The Reward

So the million-dollar question, no pun intended, becomes – is living near the water worth that huge increase in cost? Before looking at dollars and cents, you can’t overlook the added emotional value when living near the water. Nothing compares to the peace and tranquility that comes with such a lifestyle: waking up to the sound of waves crashing, walking out your back door or taking a short bike ride to stroll along the sand and play in the water. And the views, which are among some of the most majestic in the world, are priceless.

But it is one thing to describe the views and the ambiance of waterfront living as priceless, but we live in the real world, and we need to make smart decisions with our hard-earned money.

Speaking to the high cost of waterfront property, Zillow’s chief economist Stan Humphries said, “Waterfront properties are both relatively scarce and highly coveted, and that high demand and limited supply leads to higher home prices. Additionally, added insurance, floods, environmental mitigation and infrastructure costs are often part of the tab when buying a waterfront home.”

The best part about the supply and demand of waterfront property is that the coast is a very fixed space with a finite number of potential properties, yet the demand will always be there as families pursue the dream of coastal living. To exemplify how dramatically the value of these homes has increased over the past couple of decades, Zillow economist Skylar Olsen pointed to the cost of waterfront properties in the 1990’s. She said at that time, the difference between homes on the water compared to all others was 1.5 times the value. Nationwide the gap is now at two times the value, and in San Diego, as much as 3.5 times. It is clear the value of these homes is moving in one direction which makes a coastal property not only a great home but a smart investment.

If you’re interested in purchasing property along the coast, the most important thing to do is find a knowledgeable real estate agent who not only knows how to locate real potential sellers, but also how to effectively negotiate the price of these homes. When you’re ready to find the beach house you’ve always dreamed of, please visit my website,, or call me at 858-551-3380.