Understanding How Beach Proximity Affects Property Sales in New Jersey: A Hedonic Analysis Approach

Keywords: Hedonic, Economics, Beachfront, Spatial
Session Type: Virtual Poster Abstract
Day: Sunday
Session Start / End Time: 2/27/2022 02:00 PM (Eastern Time (US & Canada)) - 2/27/2022 03:20 PM (Eastern Time (US & Canada))
Room: Virtual 62

Abstract

The conception that properties located nearest the beach hold higher property values relative to those located further away is generally accepted by laypeople, yet the degree of that impact on a micro-scale is unknown. Hence, this study aimed to capture the monetary implications of beach proximity on single-family homes by utilizing a hedonic valuation approach. Focusing on Atlantic, Cape May, and Ocean Counties in New Jersey, single-family homes within the first 1 ½ blocks of the beach were collected. Using Geographic Information Systems (GIS), the nearest distance of each house to some neighborhood and environmental factors, such as a city hall and park, was determined. Statistical analysis determined the degree to which these factors and other household characteristics affect sale price. The statistically significant results found that the sales price of homes located in the second block from the beach was $44,0124 less than homes in the first block. On a more granular scale, homes located in the second lot from the beach held a sale price value of $349,548 less than homes located in the first lot. Thus, exemplifying how an increasing distance away from the beach can decrease a property’s value, whether on the lot or block scale. The results from this study can provide helpful information for real estate research or local legislation involved in factors that may affect beachfront homes, leading to more conscious planning decisions in beach towns and more effective research involving micro-scaled hedonic analysis.