Best Beach Towns in California to Buy in 2025

If you're not already buying a beach house in California, you're already behind. From Santa Cruz to Encinitas, oceanfront properties are vanishing fast—and the ones left are skyrocketing in value.

Some towns saw 7–10% appreciation last year. Rental homes are pulling in up to $100K/year. And with AI-driven real estate trends shifting daily, missing the right zip code now means missing hundreds of thousands later.

This isn't just about a dream home with a view. It’s about:

• Locking in affordable ocean view homes in California before they’re gone

• Using smart real estate investment strategies in hot zones like Encinitas

• Maximizing ROI with beachfront houses California buyers love—but overlook

• Securing the best beach towns in California to buy a house—before they rank out of reach

This guide reveals the exact towns, tactics, and timelines that wealthy investors don’t want you to know.

👉 Read on. The next 3 minutes could change your net worth—and your view—for good.

Encinitas is emerging as a smart real estate play for investors. With walkable beaches, strong schools, and high rental demand, it’s ideal for both short-term and long-term gains.

Investment Strategies:

• Buy near Moonlight Beach for Airbnb potential
• Use a DSCR loan for minimal down payment
• Hold 3–5 years: Homes appreciated 6.2% YoY (2024)

Why Encinitas? Lower risk than luxury markets, with consistent demand from families, digital nomads, and surfers.

Looking for a beach home without the $3M price tag?

Here are coastal cities offering value under $2M:

• Santa Cruz – $1.6M avg. home price, strong student + tourist rental base
• Oceanside – $1.2M range, lower insurance costs, high demand
• Ventura – $1.5M homes, growing community, 6% rental yield

Pro Tip: Inland homes 3–5 blocks from the beach can cost 30–40% less with nearly equal appreciation.

If you wait another 6 months, even the most affordable ocean view homes in California may be out of reach. Property values are rising, short-term rental competition is exploding, and insurance premiums are getting more brutal by the day.

But for smart buyers? 2025 could be the year you turn a beach house into a passive income empire.

1. Appreciation Isn’t Slowing Down — It’s Speeding Up

Buying a beach house in California isn’t just a dream — it’s one of the most proven real estate investment strategies for coastal properties in Encinitas, Santa Cruz, and beyond.

Some towns like Malibu and Newport Beach are seeing 7–10% annual appreciation. Delay = loss.

2. Rental Income Is Borderline Insane

With California pulling in 250M+ visitors in 2024, and hot towns seeing 75%+ occupancy, your beachfront house in California can rake in $80K–$120K annually through Airbnb or mid-term leases.

3. Tax Advantages Can Offset the Sunshine Tax

Yes, California has state income tax. But property owners can stack write-offs on:

• Mortgage interest

• Insurance

• Maintenance

• Depreciation

4. The Best Beach Towns Are Still Within Reach — Barely

Looking for affordable ocean view homes in California? Your window is closing fast.

• Santa Cruz: ~$1.6M, high rental demand
• Encinitas: ~$2M, exploding with digital nomads
• Ventura: ~$1.5M, sleeper hit with 6% yield

5. But There’s a Dark Side You Can’t Ignore

Insurance is rising. Wildfires, floods, and erosion hit premiums hard.

Malibu and La Jolla now average $6K–$12K annually in ins costs.

Wait too long, and you’ll pay more to protect less.

If you’re buying a beach house in California this year, don’t waste time. The following five towns aren’t just beautiful—they’re algorithmic goldmines. These zip codes are popping in search trends and buyer competition, and every day you wait means paying more (or losing the listing altogether).

• Price: $1.6M avg — the most affordable of the five
• Rental Demand: Strong from UC students + surf tourists
• Walkability: High — downtown + beachfront
• Best For: First-time investors, surfers, lifestyle buyers

• Price: ~$2M avg
• Rental Potential: Airbnb + long-term yield = 6–7%
• Community: Family-friendly, remote-worker haven
• Best For: Strategic investors, digital nomads, families

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• Price: $2.8M+
• Rental Income: $90K–$120K annually from professionals & tourists
• Walkability: Excellent — beach + downtown + trails
• Best For: High-net-worth families, second-home investors

• Price: $3.2M+ — highest on this list
• Appreciation: 9–10% annually in top neighborhoods
• Warning: Wildfire zone = $8K+ annual insurance
• Best For: Luxury buyers who want prestige + long-term flip potential

• Price: ~$2.9M avg
• Appreciation: 6–8%
• Lifestyle: Yachting, high-end dining, marina access
• Best For: Wealth builders, 1031 investors, families upgrading from LA

The state's real estate market is projected to experience growth, with luxury markets like Malibu and Newport Beach seeing steady appreciation, while Huntington Beach and Carmel-by-the-Sea offer diverse investment opportunities.

• Statewide Median Home Price: $909,400 (4.6% annual increase).

• Malibu: 7-10% annual appreciation, driven by demand for luxury oceanfront estates.

• Newport Beach: 6-8% annual appreciation, fueled by high-net-worth buyers.

• Huntington Beach: 5-7% appreciation, with strong rental potential from tourism.

• Carmel-by-the-Sea: 6-9% appreciation, attracting retirees and art lovers.

• Malibu & Newport Beach: Seller’s markets due to low inventory and high competition. Expect bidding wars and rising prices.

• Huntington Beach & Carmel-by-the-Sea: Balanced markets, where buyers still have negotiating power, but demand remains strong.

• Huntington Beach: Offers the highest rental yield (6-9% annually) due to strong Airbnb demand and surf tourism.

• Malibu & Newport Beach: Lower rental yields (4-6%) but exceptional long-term appreciation and resale value.

• Carmel-by-the-Sea: 5-7% rental yield, making it a great option for boutique vacation rentals.

• Direct beachfront homes command 30-50% higher prices than inland homes.

• Inland properties near the coast offer lower insurance costs and slower but steady appreciation.

💡 Where to Buy Based on Your Goals

• For long-term appreciation → Malibu or Newport Beach.

• For rental income → Huntington Beach.

• For a unique, charming retreat → Carmel-by-the-Sea.

• For more affordable beachfront options → Huntington Beach (compared to luxury markets like Malibu).

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Buying a beach house in California comes with ongoing costs beyond the purchase price. Property taxes, insurance, maintenance, and everyday living expenses vary depending on the location. Luxury areas like Malibu and Newport Beach tend to have higher costs, while Santa Cruz and Encinitas offer more affordable options.

Property taxes in California vary based on location and home value. Malibu and Newport Beach have some of the highest property taxes, ranging from 1.1% to 1.3% of the home’s value, while Santa Monica and La Jolla fall slightly lower, at 1.0% to 1.2%. Santa Cruz and Encinitas, known for their affordability compared to Southern California, have property tax rates around 0.8% to 1.0%.

Beachfront properties require more maintenance due to salt, humidity, and exposure to storms. Homeowners in Malibu and Laguna Beach should expect to spend between $5,000 and $12,000 annually on maintenance, especially for oceanfront properties that are more susceptible to damage. Santa Cruz and Encinitas, which have more affordable homes and lower maintenance costs, generally require around $3,000 to $6,000 per year for upkeep.

Daily expenses also vary by location. Malibu and Newport Beach have the highest cost of living, with monthly budgets for homeowners ranging from $7,000 to $10,000 or more, due to luxury dining, high-end shopping, and premium services. Santa Monica and La Jolla are slightly more affordable, with monthly living costs around $5,500 to $8,000.

Rental income potential differs by location. Malibu and Newport Beach offer lower rental yields of around 4-6% annually, but they make up for it with strong long-term appreciation. Santa Monica and La Jolla provide moderate rental yields between 5-7% annually, making them solid investment choices for both short-term and long-term rentals.

California’s beach towns offer year-round warm weather, outdoor recreation, and diverse communities. Malibu and Newport Beach provide a luxurious, high-end lifestyle, with activities like yachting, golfing, and fine dining. Santa Monica and La Jolla attract a mix of professionals and families, with easy access to hiking, biking, and surfing.

Each location caters to different lifestyles, whether you seek luxury, rental income, or an affordable coastal retreat.

When purchasing a beach house in California, access to quality healthcare is an important factor, especially for retirees and families. Many coastal cities offer world-class medical facilities with highly ranked hospitals and specialized care.

• Santa Monica & La Jolla: Best for retirees, with top-rated hospitals and specialized medical care.

• Encinitas & Solana Beach: Ideal for families, with high-quality hospitals and family-focused healthcare services.

For families looking to relocate permanently, top-rated schools play a crucial role in deciding where to buy. California’s coastal cities feature highly ranked public and private schools, ensuring excellent education options for children.

• La Jolla & Solana Beach: Best for families prioritizing education, with top-ranked public schools and strong academic programs.

• Santa Cruz & Encinitas: Great options for alternative and charter schools, ideal for students in specialized programs.

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Each California beach town has a unique atmosphere, culture, and entertainment scene. Whether you're looking for a luxury retreat, a lively surf town, or a peaceful coastal escape, these locations offer diverse lifestyle options.

• Santa Monica: Urban coastal living, with a mix of beachfront entertainment, fine dining, and high-end shopping.

• Laguna Beach: Artistic and scenic, known for art galleries, music festivals, and a laid-back, creative vibe.

• La Jolla: Upscale and prestigious, with golf courses, waterfront dining, and cultural attractions.

• Santa Cruz: Vibrant surf town, featuring local breweries, live music, and a youthful, adventurous spirit.

• Encinitas: Community-focused beach town, great for yoga enthusiasts, nature lovers, and family-friendly activities.

• Solana Beach: Quiet and exclusive, ideal for those looking for a peaceful, high-end coastal retreat.

Choosing between buying or renting a beach house depends on your financial goals and lifestyle. Buying builds long-term wealth but requires higher upfront costs and maintenance. Renting offers flexibility but doesn’t generate equity or income.

• You want an investment: California coastal real estate appreciates 5-10% per year in desirable areas.
• You plan to rent it out: Short-term vacation rentals in cities like Santa Monica and La Jolla can generate $50K-$100K annually.
• You want a permanent vacation home: Owning allows you to customize the space and use it anytime without restrictions.

• You visit seasonally: Renting avoids insurance, maintenance, and repair costs.
• You want flexibility: No long-term financial commitment or property taxes.
• You’re waiting for better prices: If home values drop, you can buy later at a lower price.

If you’ve made it this far, you already know: buying a beach house in California isn’t just a dream — it’s your smartest wealth move of 2025. But only if you choose the right town before the window closes.

Let’s make it brutally clear:

• Want affordable ocean view homes in California under $2M?
• Buy in Santa Cruz or Encinitas — while inventory lasts.
• Want passive income from a California beach house Airbnb?

Go for La Jolla — $100K+/year rental potential in a premium market.

• Want long-term prestige + appreciation?

Malibu or Newport Beach are your trophy towns — but the buy-in is rising fast.

You’re not just buying a home — you’re buying future freedom, passive income, and the ability to say "I bought before the boom."

Don’t just read. Act. Here’s how to secure your piece of the coast — before someone else does.

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• Use a reAlpha Realty→ 25% back
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• Add Title → Full 75% rebate

Ready to own California’s coastline — and make it pay you back?

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Santa Cruz and Encinitas still have ocean view homes under $2M — rare for California. Look 2–3 blocks off the beach to save up to 40%.

Santa Cruz, Encinitas, La Jolla, Malibu, and Newport Beach offer the best mix of rental income, appreciation, and lifestyle in 2025.

Yes — top towns generate $80K–$120K/year in rental income and appreciate 5–10% annually. Demand is rising, inventory is not.

Buy near Moonlight Beach, use a DSCR loan, and target homes with ADU or STR potential. It’s SoCal’s highest-upside mid-tier market.

Beachfront costs more and has higher insurance; ocean view offers better value, privacy, and long-term ROI for most buyers.

Find the Perfect Mortgage in California with Be My Neighbor.

Compare options, calculate payments, and get expert guidance—all in one place.

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