You Better Get It While You Can

Brad Goins Friday, August 22, 2014 Comments Off on You Better Get It While You Can
You Better Get It While You Can

New, Stringent Building Codes Haven’t Slowed The Search For Waterfront Property

 

There’s a popular notion that at some point in the past, waterfront property in Southwest Louisiana could be bought dirt cheap in many places.

Feeding into this perception, perhaps, is the memory of the wooden buildings, shacks and huts that once clustered on Holly Beach. The theory at the time was that these often ramshackle buildings were built to be destroyed — and then rebuilt at a low cost.

Comparable to these buildings were the many waterfront camps that had been built with no great finesse. They were built for functionality — not appearance or comfort. And they certainly weren’t built to stand up to hurricanes.

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From ‘Camp’ To ‘Luxury Home’

While this concept of a broad stretch of waterfront land that was once to be had for budget prices may not quite be on the mark, there is some evidence that much waterfront property was not as highly valued in previous decades as it is today.

In the 1980s and 1990s, says Derenda Grubb, a real estate agent of Century 21 Mike D. Bono & Co.’s, waterfront properties didn’t have the appeal or value they now have because “we did not have the construction abilities to build in those areas; [to build] in a way that we could stay secure. We couldn’t even be as comfortable [as we are in the present-day waterfront homes].”

Today, she says, a house on, say, a Cameron Parish waterfront is “no longer a camp; it’s a luxury home.” And it’s also built super-strong so that it won’t have to be rebuilt if a hurricane should strike it.

“Take the windows,” she says. “We now have hurricane-proof windows.” Grubb admits the windows “will cost you considerably more than regular windows.” You’ll also pay extra for such strong points as increased elevation and reinforced concrete.

That’s the trade-off with the recent upscale waterfront homes in this area. “You can put more money in your construction and reduce your insurance budget,” as well as your energy costs down the line, says Grubb. You invest money in construction at the beginning and get a home that’s strong and whose value increases in the long-term.

And, of course, there’s that highly attractive comfort factor. In the new waterfront homes of the teens, she says, “You don’t have to worry about humidity or mold. It can be total comfort.”

Indeed the comforts you can get in the new waterfront homes are so up-to-date that they involve real estate terms I’ve never seen before. Promotional material for one new house promises such things as “media/guest qrts” and a “tiki bar/possible outdoor kitchen.” Imagine going outdoors to a tiki bar in Cameron or Big Lake or on the River Road. It does sound a bit like a brave new world of real estate.

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The Stress Factor

Grubb has another explanation for noteworthy increases in the value of waterfront land and housing. She feels that our lives have become more stressful in recent years and we need new ways to escape this new, more intense, stress.

“We need to escape,” she says. “Look at our lifestyle. How can we get away? That waterfront property is so totally different from those hectic paces.

“Most people can tell you they can shut everything down [on the waterfront]. They can start calming down. They get a whole new feeling for life.

“There’s something about that connection to the water we don’t fully understand. It’s a very deep feeling.

“People who love waterfront property will never leave it.”

 

Scarcity

Not everyone subscribes to the notion that waterfront property has made vast gains in value and desirability in recent years. “It’s always been valuable,” says longtime real estate agent Mary Kay Hopkins. “Waterfront property has gone up like anything else.”

What everyone seems to agree on is that one of the reasons for the value and attraction of waterfront property in general is that, as Grubb puts it — “there’s only so much of it. Once it’s gone, it’s gone.”

Hopkins agrees. “There aren’t that many offerings … It’s more expensive to develop [riverfront properties]. You just don’t get to develop that much.”

“Scarcity is a very important concept,” says Hopkins. “When things are scarce, those things get more valuable.”

Hopkins provided some strong evidence for her claims about scarcity when she searched the MLS for listings for riverfront property in the greater Southwest Louisiana area.

The total number of waterfront listings in the area was 105. The most costly was $6 million; the cheapest $18 K. The median price was $99.5 K.

Now, limit the search for all waterfront properties to just those that are navigable — those that will enable you to put your boat in the water and navigate away from your property. The number of available waterfront properties in SWLA drops sharply from 105 to 65.

Suppose we want to take that number and limit it to the number of properties that are appropriate for houses. We get another drop — to 60 properties.

How about limiting the criteria to waterfront properties that are navigable, appropriate for houses, but located just in Lake Charles? We get another big drop — to 23 listings.

Now, let’s apply one more limitation. We’re going to look for waterfront properties in Lake Charles that are navigable and are 2.5 acres or smaller.

We’re now down to 18 waterfront properties.

At this point, you should see clearly what Hopkins means when she talks about a scarcity of waterfront properties — especially for people who want to build a house, travel on the waterways and be close to town. For those 18 waterfront properties that we worked our way down to, the average cost was $203,000, and the median cost — the cost of the property right in the middle of the list — was $109,000.

Tony Cornner, another agent affiliated with Century 21 Mike D. Bono, also subscribes to the idea that the waterfront property of Southwest Louisiana has always been highly valued. “Nothing’s changed,” he says. “People have always valued it.”

And he’s big on the scarcity factor as the explanation for the high prices of much waterfront property. “The [low] inventory is affecting prices.” Riverfront properties are “very few” in number, he says.

 

The Other Sportsman’s Paradise

The scarcity argument isn’t just heard in our neighborhood. While we think of our area as the “outdoor sportsman’s paradise,” folks in a certain part of the greater Baton Rouge area describe their vicinity with exactly the same phrase. It’s the combination of many waterways, much waterand abundant game that inspires this description.

In this other water paradise, discussion of scarcity is common. A Re/Max in the area is working on an exclusive, gated, luxury waterfront community called the Waterfront Sanctuary that will run along the waters of the Amite River Diversion Waterway.

One of the agents involved in the projects testifies to a personal experience of finding ever decreasing amounts of available property along the paradisal waterways.

“I’ve lived on the Diversion Canal since 1999,” he writes on his blog. “As each year passes, the lot selections dwindle and eventually there will be nothing but home resales … If a developer can find a decent piece of land on the river, they still can’t afford the sky-rocketing costs to develop waterfront property without passing that on to the consumer … The selections are limited.

“However,” he continues, “there are still some affordable options … If you’re looking for somewhere special and [are] willing to pay, the Waterfront Sanctuary still has lots left, but not for long.” At the time of his writing, the number of lots available in the development had dropped from the original 55 to 19.

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Waterway Life

Hopkins is now involved in negotiations over a new waterfront development called Contraband Pointe. The property will offer residents the opportunity for “a casual boat ride down Contraband Bayou.”

“And it’s functional,” says Hopkins. “You can get in a boat and be in Big Lake in 45 minutes.” Those who want to ride to the Lake Charles lake can be there in four to eight minutes.

She makes a claim that’s often made for the sort of property we’re discussing: “It’s really pretty and peaceful.”

As Hopkins’ comments indicate, for some, the easy access to water might be a bigger plus than the peacefulness. Southwest Louisiana culture isn’t just about fishing and water sports and crabbing and so forth. It’s also about moving from place to place in water. Many people are so accustomed to doing it that it’s one of their primary cultural values.

In promotional material for another waterfront development in the area, the potential resident is informed that the owner has the water dredged to accommodate boats or jet skis to move in right up to his dock.” Residents are promised “fresh and salt water fishing at your back door” and “your very own beach and dock.”

Moving towards Baton Rouge, the Waterfront Sanctuary promises that each lot has 171 feet that face water. Furthermore, “every lot is bulk-headed on the Canal … Included is a boathouse, constructed with two 40-foot boat slips …”

In short, say promoters, the lots offer residents “immediate access to the recreational waters that define our area.”

 

A Historical Perspective

For many in Southwest Louisiana, the waters that define our area are central to transportation, fishing, food supply and even vocation. Spend some time in Cameron Parish and you’ll see this statement borne out.

Clair Hebert, who was born and raised in Cameron Parish, and is now the parish’s director of economic development, talks as if residents of her home find land and water almost indistinguishable.

“Water is in the land,” she says. “It’s such an ingrained part of who we are we wind up not separating water and land.

“The people in Cameron are very comfortable going from land to water and vice versa.”

In the area, there is, she says, “a sort of mysticism that comes with the juxtaposition of the water and the land.”

While Hebert didn’t remember any periods of major increases in waterfront land prices, to assist me with this story, she agreed to ask a few Cameron old timers about it. One was her grandfather — Mr. Superior (so-called because of his work at the Superior Oil facility).

Mr. Superior said he couldn’t remember a period when waterfront property prices had jumped in price, and if there had been such a jump, he said, “it certainly hadn’t been dramatic.”

Hebert introduces a new broad concept to this discussion of area riverfront property — the concept of permanence. Landowners in Cameron Parish often think of land as something that should be permanently held.

Cameron Parish landowners don’t want to share the land. “Sales are very rare,” says Hebert. “Buying property in Cameron is next to impossible … Permanence in land ownership is the situation we have.”

Add to this obstacle to waterfront land ownership one that was imposed after Hurricane Rita: that those who want to make new developments to land in the parish have to acquire four contiguous lots.

The situation is further complicated by the fact that lots are often owned by more than one person. Sometimes many people own small sections of a single lot. To get four lots, one has to get the permission of each person who owns some part of each lot. (It’s important to note that the four-lot requirement will be lifted once Holly Beach’s new, post-Rita sewer system is complete.)

And then there are, of course, post-Rita construction requirements. Even if a landowner acquires four contiguous lots — and some do — the cost of the new, high, reinforced elevation means, says Hebert, “$50,00-80,000 right off the bat.”

She sums up the post-Rita property world this way: “We have a different reality now.”

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‘There Will Be More Developments’

The majority of land along the Calcasieu River is undeveloped. Often it’s impossible to get to the land because there are no roads to it, or it’s already owned or the terrain around it is inhospitable.

Much waterfront property in Southwest Louisiana (and in parts of Louisiana not far from Greater Calcasieu) is undesirable as far as consumers are concerned. It’s considered too rural — too far from centers of population and located in places where there aren’t even roads, much less basic amenities. The land may rest in low-lying areas that flood repeatedly. It may front water that can’t be navigated. Some of the land will never be desirable — at least not in our lifetime.

But it’s certain that the drive to always be claiming a little bit more of the waterfront property will go on. It won’t be a fast process. But it’s bound to continue. Waterfront land is one of the vital components of the Southwest Louisiana way of living.

“There will be more developments” of the type Hopkins is working on in Contraband Pointe, she says. “I would anticipate these lots would go very quickly.”

The upshot is easily stated. “If you can, buy now.”

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