Will rising lake levels lift property values?

This waterfront property in the Marshall Ford area of western Travis County features expansive views of Lake Travis.

This waterfront property in the Marshall Ford area of western Travis County features expansive views of Lake Travis.

According to the Lower Colorado River Authority, during the 30-day period from May 26 to June 24, the water in Lake Travis rose about 23 feet to a storage level of 84 percent of its capacity.

Rising lake levels accounted for the pending sale of at least one Hudson Bend waterfront property, said the owner’s Realtor, Alex Landry of Keller Williams-Lake Travis.

The Lake Travis home had been for sale for a couple of years during the region’s drought, she said. Prospective buyers told Landry they loved the photos of the home but were dismayed when they saw it had a dry dock, she said.

“People would ask, ‘Is the water ever coming back?,’” Landry said. “When there was no water [in Lake Travis], even for those homes with [a good] price value, we still had trouble getting people in.

“As soon as it started raining, there was a huge uptick in showings.”

She said the home is under contract following negotiations with multiple buyers.

Other local real estate agents say they are not quite as certain that the dollar signs on waterfront properties will follow the increase of recent lake levels.

Economics of lake real estate


Will rising lake levels lift property values?In September 2011 the Lake Travis Coalition—including Austin, Briarcliff, the Hurst Creek Municipal Utility District, Lake Travis Chamber of Commerce, Lakeway, Lago Vista and Spicewood—released its Lake Travis Economic Impact Report that assessed the financial effect low lake levels have on the region. The report, prepared by consulting firm RCLCO, found a correlation between lake levels and property values, with Lake Travis offering $8.4 billion in assessed property value at the time.

“A full Lake Travis generates revenue from property, sales, hotel and mixed-beverage taxes that buys ambulances, maintains schools and provides state government with needed funding,” the report stated. “When lake levels remain below 660 feet, visitations decline and businesses contract.”

However, not all experts agree that waterfront property values rise and fall with the lake level.

For the past 40 years, droughts have had little effect on lakefront property prices, said Mark Sprague, state director of information capital for Independence Title Company. Homeowners have mortgages and owe money, he said. During times of drought they are not going to accept a lower offer when selling a home, he said.

“[With the May rains], sale prices [of waterfront properties] won’t go up, but you will see a higher number of offerings,” Sprague said. “In the last 40 years, we have not seen prices go up dramatically [after a drought] or go down dramatically during a drought. What does change is the amount of [sales] volume you are going to see out there.”

He said higher lakefront property prices at this time are not workable because a home will not appraise for more than it is worth, and the market is sophisticated enough that buyers will not overpay for these parcels.

Real estate broker Brian Talley said any change in waterfront pricing will come slowly. He is the founder of Regent Property Group and sells waterfront homes in the Lake
Travis area.

“Real estate [pricing] doesn’t turn quickly,” Talley said. “Even in a steep [economic] downturn, sellers lag behind in their perspective of value.”

He said the recent increase in lake levels will bring out more buyers but not necessarily more people willing to spend additional money unless the levels are sustained for a period of time.

“Buyers will be wary of buying a [waterfront] home that has water now and did not during the drought,” Talley said.

Time will tell


Talley said he has had an increased number of hits on his business’s website since the lake levels rose.

“I have seen more activity—even a little above [typical] seasonal activity—but it does not lead me to believe things will turn around overnight,” Talley said.

Marya Crigler, chief appraiser at the Travis Central Appraisal District, said it is too early to determine what effect the higher lake levels will have on surrounding property values.

“We will have to wait to see if [the lake levels] will make a substantial impact on the sales prices or the volume of sales [of waterfront properties],” she said.

Crigler said that with the recent economic upswing, the Austin urban housing core has rebounded more quickly than the lake area.

“I do think your waterfront will begin to sell with more rapidity and frequency now,” Sprague said. “During the last seven years, [Lake Travis] has not had water, so people who do want waterfront are going to ask, ‘Is it going to stay like this?’”


MOST RECENT

As part of President Joe Biden’s plan to reopen schools safely nationwide, the department’s National School Lunch Program Seamless Summer Option is being expanded beyond the summertime. (Courtesy Adobe Stock)
USDA extends free school meals provision through 2021-22 school year

Schools nationwide will be able to serve nutritious meals to all students free of charge regardless of eligibility through June 30, 2022, officials announced.

Austin government, nonprofit and business leaders recently participated in a weeks-long summit centered on unsheltered homelessness in the city. (Ben Thompson/Community Impact Newspaper)
Plan to house 3,000 homeless individuals in Austin in the next three years would cost $515 million

The plan Austin City Council members discussed April 20 emerged from a weekslong community-wide summit on homelessness.

Photo of Zilker Park
Travis County establishes Civilian Climate Corps to tackle environmental projects

The program will create opportunities for residents to work on projects including wildfire prevention, solar energy promotion and park cleanups.

Austin Public Health Director Stephanie Hayden-Howard speaks to reporters March 13 at the Delco Actiity Center in Northeast Austin. Residents can walk up to the Delco Center on April 22 and 23 and receive vaccines without an appointment. (Jack Flagler/Community Impact Newspaper)
Austin Public Health will accept walk-up vaccinations at the Delco Activity Center starting April 22

APH will also leave its registration portal open throughout most of the week.

Lakeway City Council approved zoning April 19 for a housing development at the intersection of Flint Rock Road and Wild Cherry Drive. (Community Impact Newspaper staff)
Zoning approved for housing development on Flint Rock Road

Lakeway City Council approved creation of a planned unit development for housing development.

Early voting for the May 1 election runs April 19-27. (Community Impact Newspaper staff)
Here’s a guide to casting your ballot in the Lake Travis-Westlake area

Texas kicked off early voting April 19 for the upcoming May 1 election. From local school board to mayoral races, Community Impact Newspaper compiled voting information for the Lake Travis-Westlake area.

Early voting for Travis County's May 1 local elections opened April 19. In this file photo, voters line up ahead of the 2020 primary elections at Millennium Youth Entertainment Complex in East Austin. (Jack Flagler/Community Impact Newspaper)
More than 8,000 Travis County voters cast ballots on first day of early voting

Early voting for the county's May 1 election began April 19 and will run through April 27.

Austin Pedal Kayaks is now open in Lakeway. (Courtesy Austin Pedal Kayaks)
Austin Pedal Kayaks opens in March

The company offers watercraft rentals including paddleboards, single and double kayaks, and pedal kayaks.

The Delco Activity Center in Northeast Austin is one of the locations where residents can receive a COVID-19 vaccine. (Jack Flalger/Community Impact Newspaper)
Austin vaccine updates: Demand slows as state begins marketing push

Appointments are beginning to go unfilled, and local health officials say demand has caught up to supply. All adults in the U.S. are now eligible to be vaccinated.

Blue Corn Harvest Leander is located at 11840 Hero Way W., Bldg. A, Leander. (Taylor Girtman/Community Impact Newspaper)
Blue Corn Harvest opens in Leander; park, pizzeria launches social club and more Central Texas news

Read the latest business and community news from the Central Texas area.

Median home prices reflected a year-over-year increase in the Lake Travis-Westlake region in March. (Community Impact Newspaper Staff)
Housing inventory drops in Lake Travis-Westlake region as median prices continue rise

The median price of a home in the Austin area hit an all-time high of $425,000 in March as the region continues to surpass real estate records, according to the Austin Board of Realtors’ March Central Texas housing report released April 15.

Photo of people receiving vaccines in a gym
Austin Public Health lengthens windows for vaccine appointment signups

Residents age 18 and up can now sign up for appointments with APH any time from Saturday to Tuesday morning.