The Effects of Water Frontage on Recreational Property Values

Two methods of estimating the value of the presence of water frontage to a typical residential property are presented. Data from the Kissimmee River Basin, Florida, are used in the analyses.The first method uses multiple regression to analyze the effect of several independent variables, including lake frontage on vacant residential lot sales.The second attempts to estimate the value attributed to the presence of water frontage from owners' estimates of the value of their property with and without water frontage.The primary purpose for presenting both methods is to obtain estimates of the value of water frontage to vacant residential lots and lots with structures. Lakefront and non-lakefront vacant residential lot sale prices were estimated as a function of the year of the sale, the size of the lot, the presence or absence of lake and canal frontage, the distance from the lot to the nearest paved road, the number of utilities available in the subdivision, and the percent of wood homes in the subdivision.From the lot sales analysis, it was estimated that the presence of lake frontage would contribute about 65 percent to the total value of a typical vacant residential lot.In a survey of lakefront residents of the Kissimmee River Basin, the respondents were asked to estimate the current value of their property and the value of the property if it did not have lake frontage. The average of the responses indicated that the presence of lake frontage contributed about 48 percent to the total value of their property.