I know it has something to do with wavelengths, but I don't really understand it.
Water transmits light of every color and, therefore, looks clear.
The clearness enables you to see colors of an underwater object near to the surface. This effect is most noticeable in the water looking up. Looking down into the water, reflections and refractions on the surface can interfere. Water isn't perfectly clear, though, especially for colors with longer wavelengths. White light consists of red light plus its complement, greenish-blue light.