Value of the Coast

“Value of the Coast” – Coastal Housing Premiums in the Narragansett Bay Watershed, Hedonic study led by C. Lang and S. Hayden

Houses near the coast are often associated with a premium in the housing market. This study examines housing prices from 1993 – 2007 in eleven towns in Rhode Island with considerable coastal exposure to calculate the premium in housing prices of the Narragansett Bay Watershed. Houses within 0.50 miles from the coast were examined and divided into categories: within 0.00-0.10, 0.10-0.25, and 0.25-0.50 miles from the coast. Average and total premiums were calculated for each of these categories. The average premium is the premium per house in a category in each town. The total premium is the average monetary premium multiplied by the number of sales in that category for a specific town and summed to calculate the total premium for 0.0-0.5 miles in each town. In the closest distance category (0.00-0.10 miles), the mean average premium across the eleven towns was over $160,000. The premium dropped to $72,000 for houses in the 0.10-0.25 mile category, and then down to $22,000 for houses in the 0.25-0.50 mile category. These findings indicate that the highest premium is placed on houses that are closest to the coast, but that this premium sharply declines for houses that are further from the coast. Collectively, coastal premiums generated nearly $600 million from 1993-2007.

Read the full report.

Map of the average premium per house by town, 0 to 1/2 mile from the coast

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