Time Control Room in Helios Tower

The continent wasn't under water, it disappeared with a huge flash.

 Spoiler

One day, during his journey, the traveler heard rumors that a new continent had recently arisen from the sea. Masteria, a legendary island that had supposedly sunk below the ocean one thousand years ago, was now visible from the coast of Victoria Island. After traveling to Kerning City, he discovered that a new subway route had opened up. The destination was called "New Leaf City," apparently a town that had been constructed on Masteria already. He boarded the subway quickly, and sat down. The train moved fast, and in mere moments they had arrived in the NLC Subway.

But yeah, that concludes that Masteria wasn't under water all the time before it was founded.