Valuing Waterfront Property
Years ago I learned a fun fact about water that has always stuck with me. When the human eye looks at a body of water, endorphins are released in the brain. Now I’m no scientist and I often struggled in chemistry and biology back in the day, but I do know that endorphins are neurotransmitters that make us happy. So in layman’s terms, looking at water makes us happy. Perhaps this is why so many people vacation to the beach, river, or lake. Water is pleasing to the eye, and important to the land buyer.
Whether you are buying a waterfront lot, a farm with a pond, or a riverfront property, the access to water impacts the value of the property. And it goes without saying that the impact water has on real estate is one of increased value. Having riparian rights (legal access to water) opens up so many more opportunities to landowners. In Virginia, our riparian rights stem from English Common Law, where if any portion of your land touches a body of water you have the right to access and withdraw that water (so long as the withdrawal of the water is used on the specific property that touches the body of water…you cannot take the water and transport it elsewhere). The opportunities a landowner has with riparian rights can be accessing different areas to fish, hunting locations, water sports and other water recreation, and plenty more. These opportunities can increase the value of land, which is why so many buyers seek out waterfront property.
So how do we value waterfront properties? Can we really put a price tag on happiness? It’s tricky because there’s really no telling how much someone will pay to be happy. But the most important way of valuing any waterfront property at any given time is evaluating comparable properties that have sold. This is a bit trickier than comparing land that does not have water access for numerous reasons. The primary reason is that we have a smaller sample size. There are fewer land sales with water access than those without, so rather than having a handful of comps we may just have one, maybe two. But then we get into the type of water the property has access to. Just like land is unique in that it can have marketable timber, tillable fields, etc. waterfront properties can mean creeks, rivers, lakes, bay, etc. What I’ve come to find that has the most impact on waterfront value is how much water you are able to see. Meaning, properties where you have a huge view of miles of water will be far more valuable than those that are tucked away in a creek.
If you have any questions about waterfront properties, feel free to give Worth Osgood a call at (804) 517-9239. And be sure to check out our waterfront property listings at mopva.com.