Every once in awhile there is sale that really adds focus and clarity to a particular segment of the market. These experiences are little gems because you end up using them time after time to answer a common question about the market. The question in this case is to the value of your basic lakefront home. I’ve come to identify these as key qualities lakefronts and having developed this perspective I know it to be a sound one.
To me the key qualities include:
- A home with at least 3 bedroms and 2 bathrooms. Its style inside and out maybe outdated but it has been well maintained and includes the modern conveniences of electricity, heat and plumbing. It is accessible at all times of the year.
- The property includes its own permitted pier and a couple permitted bouys.
- The beachfront is private and useable and the propertry is on a part of the lake that is deep near shore so that enjoyment of the pier doesn’t suffer when lake levels are low.
That’s it from my perspective.
Within the last 18 months there have been a few lakefront sales that provide some very real clarity to the value of a key qualities lakefront property.
At the end of the summer in 2006, I was involved with a lakefront sale that represented these key qualities and there value to me for the first time. The address is 4540 N Lake Blvd in Carnelian Bay. The house was built in 1964 and looks like a ranch house from the front. It was really quite plane but well maintained and presented the lake beautifully through big picture windows and from two large decks above the lake. Nothing special. Pretty basic but on the lake with a pier and a couple bouys.
It was on the market for over a year but as soon as I took an interest in it it sold in a month. It’s funny how that works.
Anyway, this property got my attention when the price was reduced from $3.750M to $2.900M, roughly 25%. It stayed at this price until it sold in September,2006 for full asking price.
It’s been fun to witness a couple more sales since that I would also consider as key qualities lakefronts, to confirm my opinion. These are both in the Meeks Bay area. Both, about the same size as 4540 N Lake. Both on the market pushing a year and both starting above $3M and selling only after a price reduction to just under $3M. These are
8227 Meeks Bay Ave ( closed June 07 at $2.675M)
and
8209 Meeks Bay Ave. (closed Jan 08 at $2.375M)
Since all three were negotiated from asking prices between $2.9M and $3.0M these outcomes also reflect the strenthening buyer’s position since 2006.
I’m not going to overthink it at this point so an average of the three, pegs the value of a key qualities lakefront at $2,650,000.
It turns out that this analysis provides useful insight to valuing many lakefront homes on the north and west shores since the median price of the 35 lakefronts sold over the last 2 years is about $3.700M.
