Finger Lakes properties demanding high prices

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Demand for lakefront property is climbing in the Finger Lakes as property owners hang on to their lake frontage and more out-of-state buyers enter the market.
The impact of the growing interest can be seen in rising property values, especially on Canandaigua Lake, where average prices climbed 54 percent from 1999 to 2003. And the median price on the lake rose 54 percent from 2002 to 2003, $341,000 to $525,100, county statistics show.
Real estate and government officials describe an array of factors driving this increase in demand. Each year more families are looking for what local real estate agents call fun investments. In addition, the Finger Lakes offer lakeside residents a sound investment and a beautiful place to vacation or live.
For area assessors, the most remarkable of these increases are at Canandaigua Lake’s south end, in Gorham and Middlesex.
“Assessments of the lakefront property will change 20 to 30 percent this year. I’m not claiming that appreciation has been 30 percent this year because I don’t believe it has,” says Gorham Town Assessor Dirk Davey. “However, within the last couple years, our sales in Gorham of the lakefront properties have just gone out of sight.”
Given the rapidly rising market value, Davey says it is difficult to keep property assessments up to date.
“I hope it levels off, but it hasn’t occurred in one year. It outpaced the assessment changes we made last year,” he says.
Growing numbers of out-of-state buyers and lower taxes contribute to the growing demand.
“There’s actually no town tax in the town of Gorham, which is a great draw for people, and that may contribute to the higher property values as well,” Davey says.
Finger Lakes real estate agents explain that families-more than retirees-are buying property now.
Some are relocating to the area from outside New York and making the lake their year-round home.
“Out-of-state buyers are coming from the mid-Atlantic states and California,” says Patrick Grimaldi, Middlesex town assessor.
In Middlesex, officials say lake property prices have increased 50 to 100 percent since 2000 when lakeside lots were selling at $800 per foot of lake frontage. Today, Middlesex property sells for $1,200 to $1,600 per lakefront foot.
Lakefront prices in the town of Canandaigua are also rising. From 2002 to 2003, buyers on Canandaigua Lake’s popular West Lake Road paid an average of $468,000, 27 percent above the assessed value of $366,000. During the same period, on the lake’s east side, the average sale was $513,000, 41 percent above the assessed value of $364,000.
Once they find what they’re looking for, buyers around the lake are ready to pay high prices for premium frontage.
“These are not mortgages. A percentage of these sales are cash sales … Emotion is a factor in some lake sales. It’s a different market here,” says Donald Collins, Canandaigua town assessor.
In South Bristol, where there are 225 lakefront properties, Town Assessor James Schartzer explains, “The price now is based on how badly somebody wants something.”
Properties increasingly sell before they reach the market. And when they do get listed, they usually sell within two weeks, local real estate officials say.
Robin Johnson, director of the Ontario County Real Property Tax Department, offers a broader explanation for rising demand-and prices-in the area.
“My theories are mostly economic influences,” Johnson says. “The low interest rates have accomplished two things: made mortgages more affordable; people can get more house for the same monthly mortgage payment.
“And for investors, (they) have made it more attractive to put their money into longer term, more stable investments, such as real estate.”

Out-of-state buyers

Area real estate agents also are seeing an influx of out-of-state buyers.
“In the last several years, about one-third of the buyers were coming from out of state. It was about 10 percent (previously),” says Canandaigua real estate agent Patrick O’Hara of Patrick J. O’Hara and Associates. “Demand for lakefront property is very consistent geographically.
“There is almost equally strong demand, east side, west side. It doesn’t matter.”
Adding to the demand is that property owners are hanging on to their investments longer.
“People are making more and better use of these properties. A lot of people are holding on, knowing the rate of appreciation,” O’Hara adds.
A key factor that always has fed people’s interest in the Finger Lakes is the sheer beauty of the region.
A Canadian man, who declined to give his name, describes what drew his family to live year-round on Canandaigua Lake: “On the one end of the lake you have these high magnificent vistas. On the other end you have warm, shallow water and sand. You just don’t find many lakes with that dichotomy.”
Betty Lyon, another year-round resident of Canandaigua Lake, moved from New Jersey in 2002 to Cottage Cove in the town of Gorham, on the lake’s east side. After her divorce in 1990, Lyon decided to make her new home on one of the Finger Lakes. She visited all 11 lakes before deciding on Canandaigua.
“What brought me specifically to Canandaigua … I loved the town. The old and the new, the big broad main street, I love the lake, the proximity to Rochester, culture and so forth.
“I was so particular and I wasn’t wealthy. I’m not wealthy. So I wanted the moon. I just couldn’t afford to pay for it. But I
really wanted lakefront property.”
After years of searching, Lyon found what she was looking for. She now owns a four-bedroom, three-bathroom lakefront home with an attached garage.
“What I really wanted was an attached garage, and that’s exceedingly rare on lakefront property around here,” Lyon explains.
But part of Lyon’s goal in moving to the lake was to own a home where her children could spend their vacations.
“Everything that drew me here is keeping me here so I’m very happy,” she says.

Fewer listings

Canandaigua-area real estate agents report a constant number of lakefront property being listed. That has increased demand for those properties.
“We have 15 to 20 listings so far this year, which is consistent,” says Marty Mendola of Edelweiss Properties in Canandaigua.
But other lakes, including Keuka, Honeoye and Conesus, are showing a sharp decline in listings.
On Keuka Lake, for example, Lucy Knapp of Lucy Knapp Real Estate Inc. in Hammondsport says, “No one is selling. Everyone’s holding onto their property, and it’s not because there’s not a good market. There’s a really good market.”
Knapp’s office had 18 lakefront listings. In a normal year, there would be 50 or 60, she says.
Century 21 Southern Country Real Estate Inc.’s Janet Frost echoes Knapp.
“It’s very interesting this year. There are very few homes up for sale,” she says. “Normally, in the past, it’s been an average of around 30 properties. This year we have very few. I have approximately four.”
The number of land listings around the lake also is low.
“The inventories are way, way down on land. I used to have 130 land parcels for sale, and I’ve got more than anybody. I’ve only got 30 land listings now,” says Richard Kraft of Dick Kraft Real Estate and Appraisers in Honeoye.
Kraft and many other real estate agents serving the Finger Lakes note the shift from vacation to year-round homes as a significant factor in the market’s low supply.
“We used to be a cottage community,” says Nelson Powell of Nothnagle Realtors in Lakeville. “Cottages have disappeared; more and more year-round homes have been built up on the lake.”
In 2002, Powell’s office had 60 listings on Conesus Lake. Now it has three or four listings.
Keuka Lake-area assessors say prices there remain relatively constant.
“From figures going back about four years, prices seem fairly consistent,” says David Oliver, assessor of the town of Urbana and the village of Hammondsport.
On average, Keuka Lake frontage sells at $1,800 to $2,000 per frontage foot, up from $1,500 to $1,800 five years ago, Oliver says.
On Conesus Lake, the number of lakeside sales per year has risen consistently since 2000, from 48 to 64 sales in 2003. Richard Sheflin, director of Real Property Tax Services for Livingston County, says the average lakeside sale in 2003 was $180,000, up 15 percent from $156,000 in 2000.
Current prices for property on Conesus Lake vary considerably according to the topography of the land, the size of the lot and its location on the lake.
“There is a wide range of possible prices. The less desirable places on the lake go for $350 to $450 a linear foot,” he says, “while some of the prime properties on some of the points where you’ve got a nice expanse of lake frontage, that could go for $3,500 a linear foot.”
Waterfront prices on Honeoye Lake are also on the rise. Kraft has seen a 25 percent increase in prices over the last five years. And as prices increase, demand continues to soar across the region.
“Listen, I used to have 40 houses for sale just on West Lake Road,” Kraft says. “Now I’ve only got one house for sale on Honeoye Lake and two lots.”
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05/14/04 (C) Rochester Business Journal