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WISCONSIN'S VANISHING WATERFRONT |
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Why is supply diminishing so rapidly? |
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The Wisconsin Department of
Natural Resources. |
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The DNR
has an annual budget of $4.7 million, which they use to
purchase land in the state of Wisconsin. Much of this land
is waterfront property, which you may be free to visit, but
you will never have the option of owning. In fact, sometimes
the DNR buys entire lakes. |
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Zoning |
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Each year, zoning becomes increasingly more restrictive
in many parts of Wisconsin. This means that the
development of waterfront property is often either not
allowed or the properties must be larger than in the
past in many cases. A prime example of this is a
"would-be" development on the Rock River just outside
of Janesville, WI. Just last year, a Janesville
resident who owned a large tract of undeveloped land
along the river entered into negotiations with a
developer of my acquaintance to sell the property.
After about six months of attending meetings, pursuing
permits, etc., the township vetoed the development of
the property. You or I could certainly still buy it all
and build a home there - if we had several hundred
thousand dollars!
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| 3. |
Inelasticity of
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There
simply is only so much waterfront property available.
There will never be more. Each time a section of
waterfront property is developed and purchased, or
purchased by the DNR, or zoned against development -
the supply diminishes. With more and more people
desiring to own waterfront, you can imagine what this
does to the price.
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Why does the quality of what's available continue to
diminish so quickly?
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Consider this for a moment: Wisconsin's waterfront has been
under development since the 19th century. Like any normal
person would do, each private party or developer since then
has chosen the location(s) that are most attractive or
promise the best sale price. The "cream of the crop" so
to speak (based on beauty, lake size, proximity to
major cities, etc.) was taken first. Each "round of
development" continues to take the best of what is
available, leaving the less desirable (because of
distance from home, water quality, lake size, etc.)
properties for those who come later.
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Wisconsin's supply of undeveloped waterfront continues
to diminish rapidly. |
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Well then what is still available and how much does it cost?
The average cost of a vacant lot with lakefront is now about
$150,000. This "average" property will have about 100 feet
of actual lake frontage and will about 1 acre in size. Does
this mean that you need to spend that much money to own
waterfront? NO! Keep in mind that this is an average. The
lowest lakefront prices I have seen are less than $10,000
for unbuildable properties. The highest was $2,000,000.00
for a vacant lot on Lake Mendota in Dane County. Unlike the
false theory that you can gauge the cost of lakefront
property by the "front foot", there are many factors that
combine to give a property its value. Some of the most
important are location, lake size, water quality, size of
the property, and (of course) the number of "front feet" on
the lake. It's really quite simple once you begin to
understand the "big picture." Here are some brief
explanations:
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LOCATION |
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In general, a lake's proximity to large markets such as
Chicago, Madison, the twin cities, Rockford, Green Bay,
and Milwaukee and even other popular areas such as
Crivitz, Rhine-lander, Eagle River, or Minocqua greatly
affects it's value simply because most people don't
want to drive any farther than they must or because
some geographic areas are more popular than others.
Rule of thumb: the closer a lake is to a major city or
popular area, the more the property will cost.
Additionally, the Wisconsin Dept. of Natural Resources
tells us that approximately 80% of all the lakes in
Wisconsin are north of Hwy 29 (Wausau).
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LAKE SIZE |
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From the graphs below, you
will see that 79% of all the lakes in Wisconsin are
less than 25 acres in total area. Again, this
information is taken straight from the WDNR. In fact, the DNR says that the
majority (about 2/3) of all of Wisconsin's Lakes are 10
acres or smaller!
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86% percent of all the lakes are less than
50 acres in area, which makes them "no-wake" lakes according
to DNR regulations. This is where the big price break occurs
- because so very many people want to ski, they must vie for
the 14% of the lakes which are larger than
 50 acres, which
drives up the price considerably! Even then, most people
who want "all-sports" water request a lake which is 200
acres or larger - only 4.5 percent of all the lakes in
the state. If they want a lake which is 500 acres or
larger, they have less than 2% from which to choose -
if they can afford it!
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WATER QUALITY |
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Water
quality is pretty self-explanatory. Since most people
want to swim, the cleaner a lake is, the more it costs. Tack
on additional expense if it has a sand bottom. |
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Which
lake would you rather swim in? |
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REGARDING FEET OF FRONTAGE AND PROPERTY SIZE |
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Obviously the larger a
property is and the more frontage it has, the more it
will cost.
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So what does all this mean for me, Trevor?
 Well, first of
all it is nearly impossible to reproduce the setting you may
have experienced at Grandma's house in the summers of your
childhood. But, there are still many opportunities
available! The important thing is that you are realistic and
that you act quickly. Imagine your possibilities of owning
waterfront as an escalator that is continually moving
upward. It's now too late for you to get that property you
missed out on last year because that step went up, up, up
while you were trying to decide whether or not to get on.
Each consecutive step represents a higher price, a farther
drive, a smaller lake, or some other concession on your
part. Again, I want to stress that there are still many
opportunities available - so DON'T be discouraged! Just
realize that because of
 rising prices and diminishing
availability, "waiting and saving" is probably getting you
less, not more. So jump on the escalator and start enjoying
the benefits of waterfront property!
I will be more than
happy to
help you analyzeyour specific needs and budget
compared to the properties available and make a
recommendation.
Just send me an Email!
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| Trevor Maki |
| Land Specialist |
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| Call
and ask for Trevor at 1-800-827-6815 (office) or 1-608-963-4278 (cell)
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| ©
2001-2006 http://www.wiswaterfront.com |
| Country
Lakes & Farms Realty and Wisconsin Lakes Realty |
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First of all, you can
discount competition as far as waterfront prices are
concerned. Waterfront is not like an automobile where they
can produce more cars and make a profit based upon volume.
There simply is not any more of it. All a seller really has
to do is wait until someone is willing to pay his/her price.
Additionally, the diminishing supply (as discussed above) is
pushing prices through the roof. It is not at all unusual to
see an annual increase of 33% in lakefront property. In
fact, according to the DNR, one county in northern Wisconsin
saw some waterfront property increase by 400% in only a
5-year span in the 1990's! The real competition comes
from the buyers. Because the availability of waterfront
is continually decreasing, there are simply more people
trying to own each property. The situation is similar
to that of the housing market in areas around Chicago
where a house often sells for more than list price.
