How Do You Go About Adjusting For Difference In Water Frontage? Thanks

[Roll Tide]

Thanks,

 

[Value Ninja]

This is a tough one for improved properties, because there are usually so many other variables to waterfront properties (highly custom homes, differences in quality of water, view, etc...). It is difficult to isolate just the frontage component. But, my first move for something like this is to identify a group of somewhat similar properties (maybe your comps, possibly including older sales you are not using as comps). But, I try to find 5-8 data points. Put them on a grid and adjust for all other differences including time. If other adjustments are accurate, then all remaining price variance can be attributed to the frontage. Create a scatter plot with the partially adjusted price on the Y axis and frontage on the X axis. Put a trend line on the chart, which will hopefully show a clear relationship between frontage and price. The trend line equation can be used to make the individual adjustments. This works if the trend line 'fits' the data well. There are nuances to this approach, and it won't work if the data is inconsistent or just too messy, but this is a limiting factor for any adjustment extraction method.

 

[DWiley]

I agree that there are a lot of variables, and what is important can vary from location to location. Frontage, overall size, depth of water, even the height of nearby bridges - all of those can be important.

 

[Howard Klahr]

How Do You Go About Adjusting For Difference In Water Frontage?

along what type of body of water is the frontage?, does frontage allow access? Dockage? Is the body of water navigable? Who controls/regulates the body of water?
Need more info ...

 

[Michigan CG]

Sandy beach vs. Rip Rap shore, Front footage, water depth, ability to put up a dock, overall size, no wake lakes, all sports lakes................

 

[jtinmichigan]

Call a local realtor. All the ones around here seem to have their own opinion on front footage. And are not shy about telling me and their clients know what it is. Unfortunately, they are just taking the sales (and sometimes listing) prices and dividing by the front footage to come up with their numbers. Regardless of what type of improvements there are on the property. (No matter how I try to explain how this doesn't work, they still don't seem to get it......go figure......)

Here's a question for you to consider though. Is the extra footage excess/surplus? I see a lot of waterfront in my area and, no matter what the realtors say, most of the time the value is negligible. The guy that has lake frontage of 150 feet doesn't really have any more use of the lake than the guy with 100 feet and the market here doesn't really make a lot of differentiation in them. So the ff$ could be minimal or nonexistent. Just something to consider.

That being said, the guy with the 50 foot lot may be impaired on the size of home he can build (or expand upon) and these lots typically sell at a discount. And, if you are in an area where older waterfront homes are being torn down to build McMansions this is typically a different gig as these folks need the larger lot size (though not necessarily larger frontages) in order to build bigger homes. Not typically the issue here in the sticks but it could come into play.

 

[Bobby Bucks]

Another factor which could be significant is the degree of view, if it's spectacular it may take someone with initials to back up the adjustment. :- )

 

[bnmappraisal]

I see a lot of waterfront in my area and, no matter what the realtors say, most of the time the value is negligible. The guy that has lake frontage of 150 feet doesn't really have any more use of the lake than the guy with 100 feet and the market here doesn't really make a lot of differentiation in them. So the ff$ could be minimal or nonexistent. Just something to consider.

I agree, it's probably a regional thing. I would like to think the OP's comps will help determine what/if any adjustment should be made.

In my area (I deal with a lot of beach properties/Gulf of Mexico and Intracoastal properties) the frontage can be a big deal.

along what type of body of water is the frontage?, does frontage allow access? Dockage? Is the body of water navigable? Who controls/regulates the body of water?

I think Howard's questions are valid, especially since the question definitely varies from region to region; body of water to body of water

 

[Michigander]

http://www.workingre.com/appraising-lake-property/

Yeah yeah I know but still it helps to have these

 

[Mr Rex]

Alot of research and quizzing the top RE agents.