People are attracted to northern Minnesota lakes and rivers having good water quality and relatively pristine environments. But just how much are buyers of lakeshore property willing to pay for water quality and a natural environment? How much will property prices change with a change in water quality? What market trends do we see in lakeshore property within the Upper Mississippi River watershed?

Mississippi watershed lake counties.

The Mississippi Headwaters Board and Bemidji State University joined forces to answer these questions for lakes in the Upper Mississippi River Watershed—the first indepth study of this kind in Minnesota.

According to this study of 1205 properties on thirty seven lakes in the Mississippi River headwaters area , “property prices paid are higher on lakes having higher water quality. In other words, buyers of lakeshore properties prefer and will pay more for properties on lakes with better water quality. Therefore, sustaining and/or improving lake water quality will protect and/or improve lakeshore property values.”

Should the water clarity of a lake increase one meter, one would expect a property price increase of between $1.08 (Balsam Lake) and $423.58 (Leech Lake) per frontage foot! “On the other hand, if water quality is degraded, lower property values will result, which in turn will increase the demand and development pressures on remaining lakes with the better water quality and ultimately lowering their water quality as well.”

In the Aitkin area greater prices are paid for shoreland properties that are more ecologically healthy – a preference that “will promote and establish sustainable investments by owners of Minnesota’s riparian properties.” However, in the Brainerd, Walker and Bemidji areas, “buyers of lakeshore properties prefer and pay more for the more developed and urbanized properties. This tendency seems to reveal that buyers prefer a condition that has and can contribute to degrading lake water quality – a contradiction of their preference for locating on lakes with higher water quality. The value of providing information to lakeshore property buyers and owners (in these areas) to understand this contradiction – revise riparian thinking and ultimately land management – is clearly evidenced here if water quality is to be protected.”

References:

The final report (Krysel, C. et al. 2003. Lakeshore Property Values and Water Quality: evidence from property sales in the Mississippi Headwaters Region) from which the map and information for this article were adapted can be viewed and downloaded from the Bemidji State web site.

Posted in Care of Shoreland Property, Lakes |