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Temperatures tend to swing less between both daily and annual extremes near large bodies of water. This is true because of the large heat capacity of water. When sunlight hits the ground and other solid objects like buildings, they tend to get hot quickly, adding to the warmth of the day. When the sun goes down, these solids also release their heat rapidly, doing little to warm the night. Water, however, is different. Water has a high heat capacity. This means it can absorb a lot of energy during the day, which helps to keep nearby locations cooler. During the night the water will release this same heat energy slowly, which keeps adjacent land warmer than inland locations.
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