Top Coastal Destinations for Real Estate Investment in 2025
The charisma of shimmering beaches, spirited communities, and worthwhile investments make coastal destinations the center of attention for real estate investors.
As we approach 2024, the appeal for seaside places is growing even more, be it for leisure homes, rental properties, permanent residences, or luxury condos.
For anyone interested in investing in such places, I’ve created a top list exploring the details. Let’s get started.
Best Coastal Places to Invest in Real Estate in 2024
Miami, Florida
Demonstrating robust growth due to population increase, economic expansion, and booming tourism, Miami is a prime location for real estate investment. This city is heaven for diverse properties including luxury condos, family homes, and commercial establishments.
According to Realtor’s real estate market report, so far in 2024, the median sale price for homes reached up to $575,000. That is an 8.5% YOY increase. At the same time, the sales volume went up by 6.7%.
That said, luxury condominiums and waterfront homes in areas like Brickel and South Beach have an average annual appreciation rate of 7.2%. Also, short-term and Airbnb rentals are blooming.
Last but not least, the office space vacancy rate is 12.3%, and retail space occupancy is 91.5%. This proves the high demand for business infrastructure.
Navarre, Florida
With a 6.5% year-over-year growth in the median home value Navarre, Florida easily makes its way to the top list of favorite coastal real estate investment destinations. So far in 2024, the median house price is $430,000.
Analyzing data from Zillow and Airbnb we found the rental market reflects a very similar situation as well. A $2100 median rent per month translates to an increase of 4% compared to the previous year. Occupancy in vacation season peaks at 90%.
Concerning other investment opportunities, vacation rentals, developments, and luxury properties open a new horizon in Navarre. Newer projects and luxury homes are the cherry on top for investors. Again, these pose the best possibility for attractive returns.
Moving on, some risk involvements like overdevelopment in popular areas, and natural calamities are to look out for.
Destin, Florida
The Emerald Coast, Destin is esteemed as a popular vacation destination. Yet, for investors, it can be a golden goose. Which it is ultimately.
Destin’s Real Estate Market Overview and statistics show an 8% growth in home prices as of mid-2024. From a business perspective, this calls for a great investment field.
Right now, the median home price in Destin is $750,000. And with the steady 8% increase rate in the last five years, there will be a healthy return on investment.
In addition, the rental occupancy rate remains high naturally. It hovers around 70% to 80% on average. Thanks to steady tourist interest. However, returns of short-term rentals such as in spring and summer are way higher.
Be that as it may, commercial and luxurious properties attract well-heeled buyers and renters. And with the popularity of Destin, the demand has remained consistent over the years. Despite that, higher premiums for coastal properties in Florida are a small downside to be mindful of.
Ocean City, Maryland
Condos, townhouses, single-family homes, and luxury waterfront properties holler for investors. As of 2023, the home price ranged from $300,000 to over a million dollars when these bayside estates were listed for sale. Compared to the previous year that’s a 9% growth in property value.
Although the price went up, it is still cheaper and more affordable compared to other coastal destinations such as the Hamptons or Miami Beach. As a result, this city remains a center of attention for potential buyers.
In terms of rental business, tourists peak from May through September. For an investor, this creates an incredible opportunity to capitalize on the high demand for brief rentals. This is more than possible with an average occupancy rate of 80% during vacation season.
Now, throwing redevelopment projects and commercial estates into the bargain, there lies more investment opportunities such as renovation and reselling, and renting out commercial spaces such as restaurants, shops, and entertainment venues.
San Diego, California
Premium entry costs, strict building regulations, and climate risks are the only barriers to jumping into the real estate market in San Diego, California. But once you fly past them, this city is a utopia for property investors.
The 5% YOY home value increase might appear a bit low, but a high median price of $925,000 makes up for it. Such a high price is the result of limited housing supply, expanding IT parks, superior quality of life, and so on.
La Jolla and Coronado are the top choices as a coastal destination. Investment in these neighborhoods will surely confirm a strong return due to their high demand for vacation and rental homes.
For good measure, Pacific Beach and North Park are the sweet spots for investing in multi-family homes and apartments. College students and young professionals drive this rental market.
Cape Cod, Massachusetts
The predominant reasons Cape Cod makes its way into the top coastal destination for real estate investment are natural beauty, robust market, and persistent rental demand.
Being a deep-seated holiday destination, investments in vacation rentals yield jaw-dropping returns. For example, the rent for a 3-bedroom home ranges from $2500 to $4000 per week. Some homes however are occupied throughout the year.
Nevertheless, setting foot in this real estate market can be challenging for investors, mostly because of the steep home prices.
According to Redfin, Zillow, and other reports, the average property price is $820,000 so far in 2024. That is a 5.3% escalation of value from the previous year.
Gulf Shores, Alabama
The highest growth rate of 10.8% in property value as reported by Zillow makes Gulf Shores a no-brainer for coastal real estate investment destination. Luxurious beachfront houses, family homes, and commercial estates are the key areas to put money into.
The $485,000 worth of median home price makes it easy for small investors to embark on the market. ROI is promising as well. Like other beach areas, vacation rentals are the key sources of income. However, in Alabama, the Gulf Shores real estate market is highly seasonal. The demand peaks in the summer.
Consideration Before Real Estate Investment in Coastal Areas
Real Estate investment in coastal properties seems lucrative since they offer stunning ocean views and long beaches. Yet, before taking such a bold decision, it is necessary to know the ins and outs of this business trade.
- Assess the property’s location and accessibility to major cities, airports, attractions, infrastructure, and other amenities.
- Research the destinations’ track record of natural disasters. Determine the vulnerability of these assets to such causes.
- To steer clear of legal issues and penalties, check whether houses follow the building codes and environmental laws.
- Perform thorough research on insurance money as coastal properties tend to have higher insurance costs. That is due to the risk of damage from floods, storms, and other calamities. This impacts the overall return on investment.
Summary
In 2024, the investment opportunities in the coastal real estate market in the US are diverse. Demand, potential growth in value, population increase, economic development, and ever-growing tourism fuel this market. Waterfront living options in popular areas such as California, Florida, and the Carolinas continue to attract buyers looking for both primary residences and vacation homes. With stunning ocean views, access to water activities, and a desirable lifestyle, coastal real estate remains a highly sought-after investment option for many. Developers are continuously seeking to meet the demand for luxurious waterfront properties, making it a promising market for potential high returns on investment.
While these locations present high appreciation and strong occupancy rates, one should not neglect the risk factors before major investments.
