Coastal real estate prices are reaching new heights as demand keeps growing, outpacing supply, and causing a steady increase in prices. The primary driving factor of demand for coastal real estate is the rapid urbanization of cities, pushing individuals and families to seek alternative places to live. Additionally, the growth of remote work due to the pandemic has made it easier for many people to work from anywhere. However, the current imbalance of supply and demand compounded by coastal zone laws and regulations that restrict new construction is pushing prices up even further. The surge in coastal prices is creating unease among some coastal communities, concerned about the changes new wealth brings to their towns.
Coastal Real Estate Prices Soar as Demand Keeps Growing
Coastal real estate has always been a lucrative market. The allure of a scenic view, beach access, and calm breezes has long been a draw for people seeking a retreat from the hustle and bustle of everyday life. However, in recent years, coastal real estate prices have reached new heights as demand keeps growing.
Factors Driving Demand for Coastal Real Estate
One of the primary driving factors of demand for coastal real estate is the rapid urbanization of cities. Overcrowding, traffic congestion, high pollution levels, and high housing prices in urban areas have prompted individuals and families to seek alternative places to live. Coastal areas, with their clean air, outdoor activities, and stunning natural beauty, are ideal locations for people who long for a more relaxed and healthier lifestyle.
Additionally, the growth of remote work, spurred by the COVID-19 pandemic, has made it possible for many people to work from anywhere. This has opened up opportunities for those who previously lived in crowded cities where the cost of living was high and moved to the coast to take advantage of the lifestyle and work remotely.
Supply and Demand Imbalance
The steady demand for coastal real estate is outpacing supply, which has resulted in a significant increase in prices. This imbalance is further compounded by coastal zone laws and regulations that restrict new construction. Therefore, there is limited new property available supply while demand remains high, causing prices to soar.
According to a Real Estate Industry report, coastal property prices in the United States have grown by 28% more than the prices for non-coastal real estate since 2016. Also, post-COVID time has seen a shift in buyer preferences, with many buyers now prioritizing outdoor space and additional bedrooms for remote work in their purchase decision.
Impact on the Coastal Real Estate Market
The surge in coastal real estate prices has had a noticeable impact on the market dynamics, with some markets seeing a significant price spike. For instance, prime coastal property values in California, Florida and New York have skyrocketed, increasing by more than 50% in less than a decade. In addition, some coastal markets have become extremely competitive, and buyers often find themselves in bidding wars for the same property.
Coastal communities have noted that the rapid rise in prices is creating a sense of unease among some residents. They are concerned that the new wealth coming into their towns may change the dynamic and character of their communities, causing the bond between the area’s inhabitants to become diluted or even lost altogether.
Q: How do I finance a coastal real estate purchase?
A: The process of financing coastal property is similar to that of financing any other real estate investment. You can choose to finance through traditional lenders such as banks or loans from private finance companies that specialize in coastal property financing.
Q: What should I consider when buying a coastal property?
A: When purchasing coastal property, consider the property’s size, layout, age of the property, proximity to the beach, and views. Also, ensure that you have adequate insurance coverage for potential natural disasters that are common in coastal areas.
Q: Are there any tax implications of owning a coastal property?
A: Owning coastal property can carry tax implications such as tax benefits for mortgage interest and property tax deductions. However, you should consult with a tax professional to understand the full range of tax implications.
Coastal real estate remains an attractive and lucrative investment market; however, it is now an exclusive market due to the rising prices. While the lifestyle and benefits of owning a coastal property are great, potential buyers must be prepared to pay a premium for accessing this coveted market.