Unique Homes Blog

By Jennifer Martin

Whether you prefer a quiet life on the lake or expansive views of the ocean, now is an excellent time to buy waterfront properties. Prices have adjusted downward in the past two years, and many areas offer a high potential for rental income. Unique Homes took a look at some of the hottest waterfront markets in the country.

Long Island and the Hamptons
The real estate market in Nassau and Suffolk counties is climbing back after a slowdown in 2009 and 2010. “People have been hesitant to purchase their dream home on the water” because of the economy, said Realtor Grace Slezak, president of Destiny Realty Corp. “But the real estate market here always revives, survives and thrives.”

In Nassau County, 20 waterfront homes priced at more than $1 million have sold since January 1. For the same period in 2010, there were 14 closed transactions. The uptick in activity is easy to explain; the Hamptons are considered the ultimate lifestyle destination by millions of buyers worldwide. “You’re greeted daily with unending dramatic views, delightful fresh air, sunshine and exquisite sunsets,” Slezak said.

Slezak lists an elegant $11.9 million country estate that lies on 7.6 acres, with broad views of Shinnecock Bay and Penniman’s Cove. With 1,194 feet of waterfront, the home encompasses 8,500 square feet of living space, including 10 bedrooms.

Realtor Maria Babaev, of Laffey Associates Fine Homes & Estates, said there’s still “a substantial inventory” of waterfront homes on the market. However, the interest level has risen. “The market is continuing to strengthen,” she said.

An influx of Chinese, Korean and Russian buyers has led to a higher demand for contemporary-style homes, Babaev said. Still, traditional shingled Colonials remain popular. Babaev lists a Colonial-style home in Old Brookville, New York, lying on 2.5 acres of maturely landscaped property. The $2.7 million home offers a sun-filled breakfast room, 10-foot ceilings, a vaulted family room with fireplace, a five-car garage and many other premium amenities.

Chatham/Cape Cod
For buyers in the Chatham/Cape Cod area, waterfront home prices are up about 9 percent from 2010. The good news is, they’re down about 15 to 20 percent overall from their peak in 2007 and 2008. The bottom line: the market is starting to rebound.

“Our market held up pretty well compared to other markets,” said Realtor Chris Rhinesmith of Pine Acres Realty. “We don’t have a lot of raw land, and there’s not a lot of speculation here. That kept prices in check.”

During the spring, the area’s busiest buying season, about 20 percent of the home inventory went under contract within 60 days. Rhinesmith said that’s another sign the market is growing more robust. “In the last couple of years, people were sort of watching and waiting,” he said. “Now, there’s definitely an uptick in activity.”

Bett McCarthy, regional vice president of Kinlin Grover Real Estate, said waterfront properties in this exclusive area start at about $3 million. “These properties can be on the market for a couple of years before they sell,” she said. “The average length of time is at least one and a half to two years.”

An easy drive from New York and Boston, the Chatham/Cape Cod area has a robust population of potential buyers. McCarthy said the homes are as unique and diverse as the buyers themselves. “They can be difficult to put a value on,” she said. “Some have extraordinary amenities, lots of rooms and a good deal of waterfront.”

Kinlin Grover has listed a $9.9 million Chatham home that offers panoramic views of the Atlantic Ocean and Monomoy Islands. Artisan fixtures and custom craftsmanship are seen throughout the home, and its numerous amenities include a billiards room, gourmet kitchen and a great room with stone and wood architectural touches.

Martha’s Vineyard
2009 and 2010 were slow years for real estate in eastern Massachusetts. But this year, the luxury real estate firm LandVest closed on four record sales within six weeks. The prices: two homes for $8 million, one for $14 million and one for $18 million. “The sincere inquiries on the high-end sales are at a completely different level,” said Realtor Gerret Conover, of LandVest. “People definitely feel comfortable again investing in this sort of quality property.”

Sales prices adjusted downward a modest 10 percent from 2009, and the rental market is booming. Home inventory has not risen dramatically, as it did in other cities. “It’s as if our market took a pause for a couple of years,” Conover said.

LandVest lists a $19.5 million home lying on 3 acres of prime beachfront. Secluded at the end of a scenic country lane, the seven-bedroom main residence offers meticulously restored period details. The property additionally comes with a two-bedroom/four-car carriage house, swimming pool, expansive lawns and elegant landscaping.

Eastern Shore of Maryland
Realtor Cornelia Heckenbach of St. Michaels, Maryland, remembers “the crazy years” when the housing market boomed between 2005 and 2007. Buyers were snatching up property in this Chesapeake Bay town almost as soon as it hit the market, and prices were rising fast. Today, prices have fallen 10 to 20 percent, and sales patterns are less predictable, making the market an attractive one for buyers.

“Every house is different,” said Heckenbach, of Lacaze Meredith Real Estate. “If someone falls in love with a house, it can change hands in one day. Or it can take two or three years.”

This year is shaping up to be a busy one, she said, but there’s still a significant amount of inventory available. At the beginning of the summer, 158 active listings were on the market for more than $1 million. Most were under $3 million. Heckenbach recently listed a $3.4 million property reminiscent of the grand old homes along the Chesapeake Bay, surrounded by 5 acres of land and towering trees. The five-bedroom home is constructed of high-end materials, from the antique heart pine floors to the custom molding and woodwork, and offers a gourmet kitchen, formal dining room, library, grand foyer and deep-water anchorage.

“Talbot County is a special area, and in the upper bracket there will always be buyers that are looking for a unique property,” Heckenbach said. “A purchase here is a lifestyle decision.”

Smith Mountain Lake, Virginia
In the 1960s and 1970s, this area in the Roanoke region was mostly rural. Today, the lake is a popular recreation spot and the area is developed with upscale homes, condominiums and golf-course communities. Vacationers, retirees and commuters to Roanoke and Lynchburg have made homes in this picturesque valley of the Blue Ridge Mountains. Realtor Jane Sullivan Horne, of Prudential Waterfront Properties, said home prices are down about 10 percent from their peak in 2007.

“We’re seeing smarter investors,” she said. “Five years ago, homes were going so fast that it was hard for buyers to find what they were looking for. Now, there is so much more available.”

Waterfront luxury homes span from 3,000 square feet to 8,000 square feet, most with prices in the $1 million to $4 million range. Horne recently listed a $4.4 million home in Penhook that lies on a small peninsula, with more than 600 feet of waterfront. Its amenities include a double-slip boat dock, wine cellar, exercise room and 360-degree views of the water. Another listing, a $3.3 million brick French country home, encompasses five bedrooms, six full baths, stone patios and five fireplaces.

Buyers in the area are diverse, Sullivan said. Some are retirees looking to downsize, while others have growing families and seek something larger. “Everybody likes the location.… We’re two hours from Raleigh-Durham and five hours from Washington, D.C., or Virginia Beach,” she said. “It’s very easy to get away for the weekend.”

North Carolina

Bald Head Island
The waterfront market was “so quiet” last summer, said Realtor Mary Munroe, that she can count on one hand the number of properties she sold,… and those were foreclosures priced in the $400,000s. “I’d never worked so hard,” remembers Munroe, of Mary Munroe Realty: Bald Head Vacations & Sales. “Everyone was saying, ‘We’ll wait till the prices go down.’”

What a difference one year makes. In May 2011, Munroe put three luxury waterfront homes under contract, all worth more than $2 million, and was received ing dozens of inquires. “I really believe the prices have bottomed out, and buyer confidence is back,” Munroe said. “Today, you can buy a property lot for $75,000 that listed at over $400,000 in 2005.”

Bald Head Island is a tranquil spot where homes lie near pristine beaches, sea birds, the Old Baldy Lighthouse and other quiet maritime features. Golf, tennis, yachting and biking are just some of the area’s pleasures. Buyers often come to the area first as summer renters, Munroe said.

“They fall in love with the place and buy a property,” she said. “They’re very successful people, oftentimes owners of large corporations. This is the perfect place to get away from the stress.”

One of Munroe’s listings is a $1.8 million, custom-built, ocean-view property on Laughing Gull Trail with a gourmet kitchen, elevator, private deck, hot tub and plenty of storage room for golf carts. The home lies on the 16th fairway, the island’s signature hole on a newly renovated golf course.

Morehead City
Caressed by western winds, this peninsular region on Bogue Sound is an excellent choice for investors in rental properties. On nearby Emerald Isle, an eight-bedroom, eight-bathroom property lists for $1.2 million and brings annual rental income of $65,550. Other waterfront properties that have listed on Emerald Island, and their annual rental incomes, include: a $1.2 million home ($42,000 in annual rental income); a $1.3 million home ($76,500); a $1.6 million home ($100,000); and a $1.7 million home ($107,997).

“All of these homes have been updated, and some are rented pretty much year-round,” said Realtor Linda Rike, of Linda Rike Real Estate. “We have much milder weather, so people rent even at Thanksgiving and Christmas.”

Rike said rental income in the $70,000-plus range is typical of larger homes with five or more bedrooms. At the beginning of June, 26 of these homes were on the market (all for more than $1 million); another seven had sold since June 2010. Prices have bottomed out after a swift rise, Rike added. “With interest rates so low, it’s a perfect time to buy,” she added.

Great Lakes

Michigan
It’s difficult to match the beauty of Michigan lakes in the summer and fall, as evidenced by the constant stream of second-home buyers. The Traverse City area, where waterfront homes sell at about $400 per square foot, is attracting more buyers coming into retirement, said Realtor Debra Hall, of Remerica-Traverse City. “We probably have twice as many wineries as we did 10 years ago,” she said. “There are lots of microbreweries and niche restaurants,… sushi places, French restaurants, chocolate restaurants, vegan restaurants, just about anything you would want.” Buyers tell Hall that Traverse City reminds them of Carmel, California.

Prices have dropped about 7 percent since 2010, but sales activity started picking up last year. “Many people have decided to sell their condos in Texas, Arizona or Florida, and make their primary residence Traverse City,” Hall said. “They’ll leave for the winter, but they would rather be here for the summer.”

In the suburbs of Detroit, waterfront areas such as Bloomfield and Birmingham are receiving an uptick in interest, as well, said Realtor Kevin Cristbrook, of Coldwell Banker Weir Manuel. “I think there’s a palpable, energized feeling,” he said. “It comes from an improving economy.”

Waterfront homes near Detroit, which range from $2 million to $7 million, have adjusted downward about 10 percent since 2009. Some buyers choose a public access lake, while others prefer a private beach.

“Whether you love Jet Skis and motorized boats, or a quiet, ‘no-wake’ zone, you can find what you want here,” Cristbrook said.

ChicagoRecently, at the other end of the state, an 18-hole, Jack Nicklaus Signature Golf Course opened on the shores of Lake Michigan in the St. Joseph/Benton Harbor area, about 90 miles east of Chicago. The challenging course was selected to host the 2012 and 2014 Senior PGA Championships. The 530-acre community will encompass nearly 800 residences, including cottages, signature homes, townhomes and condominiums, ranging from $250,000 to $600,000 or more.

Chicago’s North Shore communities such as Wilmette, Lake Forest, Winnetka and Evanston long have been highly developed, a factor that cushions lakefront homes from severe drops in real estate prices. Waterfront homes range from $3 million to $5 million. Realtor Joanne Kersten Hudson of The Hudson Company recently sold a Winnetka lakefront home at $3.9 million; it originally had listed at $4.3 million. “It’s still a buyer’s market, but lakefront sellers also know that there is a limited supply of lakefront homes available,” she said. “Market forces are at work, and those homes that are priced most aggressively tend to be the homes that sell.”

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