Property Values

You Better Believe It…Water Quality Does Affect Property Values!

A recent study was conducted by the University of Maine (Dept. of Resource Economic & Policy) on one type of benefit associated with lake water quality, the extent to which water quality becomes capitalized into the value of lake-front properties.

The experiment considered that two lake-front properties on different lakes with identical property characteristics except water quality, would result in a higher value for the property on the lake with higher water quality. The difference in values is the premium paid to own property on the lake with higher water quality.

The possibility was investigated using property sales data from 34 lakes in six market groups and statistically estimating the share of selling prices attributable to the lake-water quality. Preliminary estimates indicate that a one meter improvement in water clarity will enhance property values from $2,400 to $7,400 (1994 data) depending on the market group being considered.

This information was used in public education efforts to convince community leaders and property owners that they benefit directly from actions they take to maintain and improve lake water quality in their communities. “Expenditures on lake protection is money well spent”.

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