Waterfront homes bit more affordable

WASHINGTON — An ebbing tide lowers all boats, at least if you take the analogy to water-related real estate.

Lower prices and longer times on the market mean it's easier for boating enthusiasts to find a home that puts them closer to casting off from shore.

Kathy Green and Terry Masser hadn't planned to buy a waterfront home.

Masser, who works for a company that fixes properties after fire or water damage, was looking at a house in Pasadena, Md., in November with the idea of finding something he could buy, rehab and sell for a profit.

Then he discovered the house for sale just across the street. It had deep-water frontage on the Magothy River, not far from the Chesapeake Bay, outdoor decks offering wonderful views at sunset, lots of room and a reasonable price.

Out went the investment idea, replaced by a plan for Green and Masser to sell their homes in suburban Maryland and consolidate housekeeping along the banks of the Magothy.

They now commute from their waterfront home to their jobs.

"We feel we got a very fair price for the property and the waterfront location," said Green, who works at a digital-imaging company.

Not a fixer-upper

It has four bedrooms and three bathrooms; an in-law suite; a large, heated garage; a boat slip; and a boat lift. When Masser discovered the place, it was listed at $749,000, down from $800,000. They negotiated the price down to $700,000 and closed the deal in February.

"This is not a fix-and-flip," Green said. "This is a fix-and-stay. This is a 'we aren't leaving unless you drag us out' house."

Now they're in the market for a power boat.

"The empty boat slip is just killing Terry," Green said.

Different buyers value different types of water-related real estate. Waterfront homes with expansive views typically draw top dollar. Storms can tear up those shorelines, though, so boaters place a premium on sheltered waterfront along creeks that offer safer harbor for their fragile watercraft.

Sailors, in particular, value deep water along sheltered shores, because it can take six feet or more to accommodate a sailboat's keel.

Prices tend to be more affordable for homes without shores of their own but situated in communities that offer water privileges, such as the use of community-owned docks or boat ramps and put-ins where a boat can be slipped into the water off a trailer.

"It's a mixed bag," said William Glasgow, a real-estate appraiser based in Riva, Md. "For very in-demand properties, values are holding steady."

The market has returned to a more traditional selling time of more than six months, he said.

Waterfront is always a special category, he said, and a home along the shore can cost hundreds of thousands more than a similar house just across the street that lacks water frontage.

"There's no way to compare the two," Glasgow said.

When doing an appraisal on a waterfront home, he uses only other waterfront properties for comparables.

That makes home-price statistics tough to use as gauges for boat-oriented real estate. Even breaking them down by zip code won't reflect different values for waterfront, water view and water access for homes that may lie within a few hundred yards of each other.

While there may not be a fire sale on water-oriented homes, buyers willing to hunt can find better opportunities than they could two years ago.

Leigh Lawson-Everstine, owner of the Metro Bay Realty brokerage in Edgewater, helped Green and Masser negotiate their purchase.

"[Values] obviously have taken a hit, but there's still a high demand for these water-privileged areas," Lawson-Everstine said.

Decline in value

She said she has seen "significant drops," especially in waterfront homes. She described one 1940s cottage near Pasadena with water deep enough to accommodate a sailboat's keel.

It's now listed at $650,000, though she said it probably would have had an asking price above $1 million just a year ago.

"A lot of homes were significantly overvalued," Lawson-Everstine said.

Boaters don't necessarily need to own the shoreline to have a home on the water. In some respects, the boat itself fills the need.

"A lot of people, instead of getting a home, they'll live on their boats for the weekend," Lawson-Everstine said.

By the way, if it has a galley, berth and a head (that is, kitchen, bed and bathroom), a boat counts as a second home as far as the Internal Revenue Service is concerned. Interest paid on a boat loan may be tax-deductible.

Given the price declines near the water, this could be the time to replace the drive with a dockside address.