OLD SAYBROOK, Conn. - The waterfront home for sale in the shoreline town of Old Saybrook, Conn., overlooks Long Island Sound with three bedrooms, three baths in 3,800 square feet. Set on just over an acre of land, the three-story property has about 100 feet of water frontage with a wraparound terrace and outdoor lounge facing the water. The home even has a Hollywood pedigree: It sits on land owned for many years by the actress Katharine Hepburn.

Yet what may make the property's $6.88 million price tag palatable to potential buyers are the less-visible features deployed after Hurricane Sandy, which swept across Connecticut and parts of the Northeast coast in 2012.

Rock and concrete breakwaters and seawalls were installed in the water outside the property to soften the impact of a storm surge, while landscaped berms protect against rising tides. Foam insulation lines the home's walls to block wind and water from breaching its facade. High impact fiberglass windows were installed to withstand high winds, rain and moisture.

"Sandy was a reminder of just how vulnerable these waterfront areas can be," says Frank Sciame, the property owner and Manhattan builder who spent more than $1 million building the home. "We knew that we needed to make this home much more resilient to severe weather."

Hurricane Sandy stretched from the central Appalachians well into New England when it came ashore nearly four years ago, tearing through thousands of homes and leaving more than $70 billion in damage in its wake. The storm, which left miles of shoreline buried in sand and killed 182 people, still ranks as the second-costliest in American history after Katrina.

Since then, coastal real estate markets pounded by the storm have mostly recovered, thanks in part to federal, state and local governments pouring billions of dollars into repairing and replacing much of its damaged coastline.

The U.S. Army Corps of Engineers moved millions of cubic yards of sand onto shoreline areas from New Jersey to Maine in an effort to fortify beachfront battered by the storm. The restoration and resiliency projects are part of the $51 billion relief package passed by Congress in the wake of the disaster.

Local home builders and developers are also again erecting new properties in many locations, including some beachfront communities that rank among the most expensive for real estate in the country.

"It's been a very long recovery, but we're finally seeing home values and sales get back to pre-Sandy levels," says Virginia Klein, real estate broker with Re/Max Heritage in Westport, Conn. Storm surges caused by Sandy reached as high as 12 feet in Westport, sending walls of water down many of its streets. Sandy tore through more than 3,000 homes in Connecticut, causing damage costing an estimated $360 million. "Many of us really underestimated just how long it would take to get these areas back to normal," Klein says.

Along the New Jersey coast, counties hit hardest by Sandy are still grappling with closed streets, broken streetlights and unfinished boardwalks. The storm also wiped out thousands of homes, many of which haven't been rebuilt.

Meanwhile, a chorus of experts is calling on political leaders and urban planners to stop building homes in vulnerable coastal areas.

Robert Young, a North Carolina geologist who has studied the way communities respond to storms, says spending tens of billions of tax dollars subsidizing coastal reconstruction in the aftermath of storms is creating "a bit of a moral hazard."

"There's usually very little thought given to whether it actually makes sense to keep rebuilding in these areas," says Young, who is director of the Program for the Study of Developed Shorelines at Western Carolina University. "Waterfront communities can't keep thinking about short term vulnerabilities but instead need to make concrete plans for withdrawal over the long term."