Gorgeous views, a place to put a boat, swimming ‘til your heart’s content: How much value does a lakefront add to a property? —-
Thanks to the law of limited supply, lakefront properties generally come with a higher price tag than their inland counterparts. Although waterfront properties fluctuate in value like the rest of the real estate market, they consistently sell at a higher price than homes that are not on the water, according to a study of more than 1.2 million residential properties nationwide. As a seller, exactly how much value does a lakefront add to a property?
To find out, we dug into some recent data regarding lakefront property values. We also spoke with experts who specialize in selling waterfront properties for top dollar. Here’s what we learned about how gorgeous views and the promise of watersport opportunities translate to property value.
Lakefront pricing by the square foot
As an agent in Lake County, Florida, Dawn Giachetti is an expert when it comes to selling lakefront property. She says that homes on the chain of lakes, an interconnected navigable lake system in her market, are by far the most desirable. “You could have a 3,000 square foot house in [an inland] community that would be $400,000. If you put that same home on the chain of lakes, you’re probably looking at $1.4 million.” That’s an increase of 250% for prime lakefront access.
While Giachetti’s example may represent a more extreme scenario, around the country, lakefront property is consistently valued at least 25% to 40% higher than inland comps.
For example, in Canyon Lake, California, single-family lakefront homes are currently listed around $515 per square foot, compared to roughly $375 per square foot for homes off the water. Comparing data as far back as 2005, analysts found that lakefront homes and non-lakefront homes in this area maintain a similar pricing relationship over time.
As a seller, this wide range of pricing can be confusing –– should you expect closer to a 25% or 250% increase? To help determine the price of your own lakefront home, consider using the free HomeLight Home Value Estimator. We aggregate comparative data from sources in your local area to give an accurate representation of your home value, including the typical lakefront surcharge common in your locale.
What determines the value your lakefront adds to your property?
Kimberly Nemeth, a longtime real estate agent serving the Buffalo, New York, area, says that a lakefront location in her area adds anywhere from $50,000 to $100,000 to a home’s value. How much value a lakefront adds to a property depends on several factors.
While real estate agents agree that a view of the lake adds value, determining the dollar amount is a somewhat subjective endeavor. When pricing a home, Nemeth said she considers whether the whole house takes advantage of the view or if it’s only partial, such as from a living room or master bedroom.
Whether you can actually access the water — and how easily you can access it — will impact overall property value. If you can open the slider door and saunter across your private yard to dip your toes in the lake, that’s worth a lot. If the path to the water involves a longer or steeper walk, that’s not going to be as valuable.
In addition, research conducted on Lake Michigan shows that water frontage, or the linear feet of the lot that touches the water, has a direct impact on the value of the property, with more frontage being more desirable.
“It [also] depends on what the utility of the water is,” said John Huston, a professional appraiser in St. Petersburg, Florida. Giachetti has found this to be true in her market. She says that even on smaller, independent lakes, navigable water access will add at least $100,000 in value to a home. In contrast, waterfront property that is not navigable — meaning, no boat access — will probably only see half that increase.
Giachetti says that selling a lakefront home means selling that complete, everyday-vacation lifestyle. As such, outdoor living comforts can make all the difference in a home’s price point.
Lakefront homes can list at a higher price if they have a dock or pier that follows municipal guidelines and permits. These features entice buyers looking to boat, fish, swim, and enjoy other water activities. According to our 2021 Agent Insight Report, having a pool can add $27,199 in value on average. An outdoor kitchen will also add around $9,751 in value, since buyers can more easily envision themselves entertaining outside.
Marketing your lakefront home to sell
When it’s time to sell your lake home, know that buyers will be comparing yours to other lakefront properties. As with any home purchase, they respond best to a home that’s in good condition and has a reasonable price for the perceived value.
There are four distinct areas where you can maximize the value of your lakefront home and help it stand out from the local competition.
Homes on any body of water take a beating because of the moisture. Exterior surfaces and fixtures can be prone to rust, deterioration, and erosion, thanks to extra exposure to water.
These maintenance tips can help you bring in the most value for your lakefront home:
Stain or seal any deck or outdoor furniture that looks faded or worse for wear.
Pay for a pre-listing home inspection to clue you in about any structural or moisture problems. These can include mold or mildew on wood siding.
Take care of any land erosion issues. Some ways to control erosion include a retaining wall, a seawall, a rip rap barrier, or a wetland area of natural grasses and plantings.
Inspect any dock, pier, bulkhead, or break wall on the property. Buyers will want assurance that these structures are in good working order.
“Wood docks during our winters can get destroyed with the ice buildup,” Nemeth said. “If you’re a boater and looking at a house where the dock is destroyed, you’re not going to want to pay that much money.”
Because some municipalities restrict how much homeowners can expand or renovate a waterfront home, it’s important to highlight what you’ve done, especially in regard to lakeside concerns.
For instance, you may want to highlight:
Siding upgrades. Brick and fiber-cement siding are durable under damp conditions. Fiber-cement siding can resemble wood but has a low moisture content, doesn’t rot, and resists deterioration from moisture and UV rays.
Window upgrades. Pella Windows & Doors points out that its fiberglass windows provide additional protection against the seasonal weather from Lake St. Clair and the Great Lakes.
Roofing upgrades. With a 1% moisture absorption rate, clay or concrete tile present an advantage to lakefront home buyers.
Systems upgrades. Be sure to point out any specific updates to septic, plumbing, insulation, and heating/cooling that would be appealing to lakefront buyers in your area.
Cosmetic upgrades. And finally, it never hurts to point out any recent exterior or interior renovations that would set your property apart from the competition.
If your property is part of a lake association, be sure to highlight the benefits rather than just hitting buyers with the dues. Lake associations can add value to a property, and buyers need to be aware that the money spent is worth it in the long run.
For example, in Maine, lake associations are responsible for:
Monitoring the lake’s water quality.
Educating residents and visitors on water and wildlife.
Defending the late against invasive species.
Protecting property values of lakefront homeowners.
Creating a community of like-minded lake dwellers.
How much value a lakefront adds to a property depends on the lake. Not all lakes are the same in the eyes of buyers, so you’ll need to help buyers understand what your lake has to offer.
Water quality. Research conducted in Coeur d’Alene, Idaho shows that water quality, including its overall clarity and the presence of any invasive organic species, has a direct effect on the value of lakefront property.
Elevation. Is your property a safe distance from the water? While data seems to indicate that buyers don’t seem to be dissuaded by lakefront property in flood zones, that may change if insurance prices fluctuate in the future.
Water levels. Research conducted at Lake Thurmond in South Carolina, notes that water levels impact lakefront property values as well. As water level diminishes, property prices fall, though not in direct proportion. Other factors such as elevation, slope, and geography can change buyers’ perceptions about water levels.
Accessibility. Be sure to include relevant lake navigation in your marketing, including no-wake zones or lake quiet hours. Buyers will also want to know any restrictions on boat size, necessary draft, and dock construction.
Work with a lakefront expert
Given the choice, almost everyone would opt to live on a lake, and yet the number of lakefront properties available is very limited. “Lakefront properties are definitely more valuable because there are just not as many homes on the water,” says Nemeth.
Since lake property is such a hot commodity, it may seem like your lakefront home can practically sell itself, especially if it’s been well-maintained. But in today’s market, there’s more nuance than ever when it comes to selling waterfront property.
Giachetti says that her market has seen a 30% overall price increase since September of 2020. She attributes this growth in part to more work-from-home buyers. “Those back bedrooms with a lake view are turning into home offices left and right.” Her take on rising prices? “It’s not [only] a lack of inventory. It’s a surplus of buyers.”
In the face of such unprecedented buying trends, it’s important to work with an expert that can help position your lakefront house well and get top dollar for your valuable property. HomeLight can help match you with an agent that has the experience you need.
Nemeth concludes by saying, “I don’t see lakefront homes depreciating in value anytime soon. They hold their value really well.” As a seller, it’s great to know that time is on your side in terms of the value a lakefront adds to your property. By keeping these valuation tips in mind, you can rest assured that you’ll get top dollar for your lakefront property when you go to sell.
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