Valuation Model for Water Access Properties in the Lakes Region of New Hampshire

Post written by Chuck Braxton, REALTOR®, Roche Realty Group, Inc.



Water access communities are ones where the property owners have deeded rights to use a separate waterfront parcel. Some communities also have other common lands for roads, parking, tennis courts, recreation, etc. The terms “beach access”, “deeded beach rights”, “shared access” are also used, but “range way access” or a “right-of-way to water” are more limited rights. Unlike cottage colonies or condominiums, water access community owners own their lots.



The shared waterfront may have varying degrees of development ranging from beach, swimming and picnic areas; club houses; storage facilities for lawn chairs or canoes and kayaks to facilities that are regulated by the State of New Hampshire such as docks, boat slips, and mooring fields.

Water access communities emerged in the Lakes Region of New Hampshire in the mid-1950’s and became prevalent in the 1960’s. However, the excesses of some developers of these communities caused towns in the Region to enact “anti-funneling” ordinances by the 1970’s.



These regulations required new developments to have significantly more waterfront per lot than typically had been used and strictly limited waterfront property owners from granting additional water access rights to back lot owners. Other state and local zoning and development regulations such as minimum lot sizes based on water and waste water requirements further limited development of new water access communities.

Within the past five to ten years, the value of waterfront began to rise rapidly putting it out of reach of many. Buyers turned to water access communities as a more affordable option. However, these buyers brought their wants for waterfront property with them.

Thus, the value of properties in a water access community is primarily determined by how similar the lots are to waterfront parcels. Additionally, the regulatory restrictions limit supply, while affordability is driving demand.

The following model was developed to aid buyers and sellers of water access properties understanding of the factors that contribute to value in a water access community. Its correlation has been tested in water access communities on Lake Winnipesaukee, Lake Winnisquam, Newfound Lake, and Lake Waukewan.

While the model will yield reasonably accurate results among different communities on the same lake (or in the case of Winnipesaukee, in the same area of the lake), comparing the values of properties on different lakes should be done with caution. In general, prospective buyers who eventually purchase seem to first make a decision on community lifestyle and general location, then focus on specific properties.

Details of the Valuation Model: In water access communities at the major water bodies in the Lakes Region, the determinants of value for properties are (in order of priority):



1. View of the water with properties having:
• No view of the water being the norm with no adder above median value.
• Seasonal views of the water having an adder of $10,000 – $40,000.
• Year-round water view having an adder of $35,000 – $75,000.

Why is this important? A water view is the most sought-after feature at water access properties, yet only a few lots in these communities offer any view of the lake. When a property has a view of the water its value is closer to the value of owned waterfront.

For example, on Newfound Lake only 2% of the lots at Tobey Development in Bridgewater have year round water views and only 2 or 3 have seasonal views; for Camelot Acres in Bristol, only 6% have year round water views and there are only 1 or 2 with seasonal views.



2. Distance to the beach from the property with properties located:
• Less than 350 yards from the beach being worth 1.4+x median distance;
• At or near median distance to beach for the community being base; and
• 1.2x median or more than 1,000 yards from the beach being worth 0.8x or less.

Why is this important? The waterfront qualities of a lot decrease as distance from the beach increases. In the typical Lakes Region beach access community there will be lots over a mile from the beach so proximity to the waterfront has value.

For example, on Newfound Lake the median distance to the beach is about 750 yards for the larger water access communities.

3. Lot size relative to median lot size in the community with properties having:
• 1.4x or more than median size being worth 1.2-1.3x;
• Near median size for the community being base; and
• Less than median size being worth less in direct proportion or less as size decreases.

On Newfound Lake the median lot size for Tobey Development in Bridgewater is 0.47 acres; for Camelot Acres in Bristol, 0.4 acres.

Why? Development potential and privacy are limited on lots at the median size since they are smaller than the towns allow for building today. Lots approaching the current standard lot size offer greater development potential and the opportunity for privacy unequaled in the community. It is important to understand the extent to which lots surrounding a property have been developed as it can be surprising to learn that the apparent privacy of a median sized lot is really created by undeveloped abutting lots.

Other Valuation Factors: Site improvements such as paved drive, water well, state approved septic system (no value for a pre-1970’s system), outbuildings, detached garage, landscaping (if enhanced), and retaining walls must be added to reach total lot value. For post-1974 construction on a permanent foundation with full headroom, the value of year-round residential structures typically falls in a range of $75-$90/sq. ft. based on heated living area above grade.

Illustrative Case: On Whittemore Point at Newfound Lake (Tobey Development, Bridgewater, NH), the value of median size (0.47 acres) located at median distance from the beach (750 yards +/-) with no view of the water is $90,000 based on two 2005 sales. Thus, the value of a lot twice median size, 100 yards from the beach with a year round water view is at least ($90,000 x 1.2 x 1.4)+$50,000 = $200,000. Add, site improvements at 35,000 and the home at 960 sq. ft. (screened porch excluded here) for $72,000-$86,000. Total value is $307,000 to $321,000.

About the Author: Chuck Braxton is a REALTOR® with the Meredith office of Roche Realty Group, Inc. He has applied his 25+ years of experience as a business executive to the challenges facing owners and buyers of real estate in the Lakes Region. Mr. Braxton has authored several articles and financial models on valuation for project development and real estate applications. In addition to this article, current works include: The Tax-Deferred Exchange: Is It Right for You?; What Is That View Worth?; and a series on values of waterfront, water access, and vintage properties in the Lakes & Mountains Region of New Hampshire. His website is at www.ChuckBraxton.com. Mr. Braxton may be reached at his direct line: 603.677.2154, by email: cbraxton@metrocast.net or toll free any time of day or evening at 800/926.5253, extension 342.