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Everyone intuitively understands that properties sitting alongside a body of water — whether it is an ocean, lake, river or even a stream — command a premium over and above a similar property away from the waterfront, even if it is in the same development.

Waterfront/non-waterfront land price comparisons are the easiest to understand, but they are not the only premiums that get established. What type of premium is placed on mountain-view land or properties sitting alongside fairways in a golf resort? And do all lakefront properties get the same benefit in terms of pricing?

David Wyman, a lecturer at Clemson University and a candidate for a doctorate degree at the University of Aberdeen in Scotland, along with a compatriot, Stephen Sperry, decided to take a look at those questions. They had found the perfect contained laboratory to do their studies.

Not far from their residences in South Carolina can be found a local reservoir, Lake Keowee. It’s a considerable body of water covering 18,500 acres, measuring 23 miles in length and boasting 300 miles of shoreline.

"It’s crystal clear, blue water with the Blue Ridge Mountains in the background," gushed Wyman. "It’s absolutely gorgeous."

The beauty of the setting, as can be expected, attracted builders of one sort or another, one of which created a development called The Reserve at Lake Keowee, a 3,900-acre lakeside, golf-course community.

"Earlier in this decade, this place, like many others in the United States, started to experience incredible price appreciation, so what I was originally looking at was … why is one lot worth $1 million and another just $200,000?" Wyman explained.

"What we found was that there was an incredible variation of special factors in regard to different types of lots, different slopes or even different shore lines. All those added up to be different ways to value property."

When comparing different premium lots, on the golf course, with mountain views or on waterfronts, the most expensive pieces of dirt are still those at the water’s edge. However, not all lake waterfront properties value equally.

The most expensive waterfront lands were labeled "point lots," and they were almost peninsula-like in that they jutted into the water, offering up big, wide, 180-degree views.

"These wide-open views are the most valued," says Wyman. At the Reserve, a point lot was valued at $1.75 million at peak, which was before the financial/housing crises that began in 2007. Recently, a point lot sold for $1.5 million (not much in the way of price depreciation over the recession years).

A second category of waterfront land was called "deep-water lots," and referred to land that showed a limited view of about 300 feet. Today, those lots sell for $750,000 to $800,000. Depreciation here, too, has been mild.

Finally, there was something called "cove lots," which in a self-explanatory way means a home built on an inlet of water, or cove, with limited views. Often there is land blocking the view of the larger body of water. At peak these lots sold for $500,000, but prices have since settled into the $300,000 range.

At the Reserve, the developer carved out a small number of plots with wonderful, unobstructed views of the Blue Ridge Mountains. These were less expensive than point lots and deep-water lots, but more pricey that cove lots. At peak, these lots sold for about $450,000 and that price has come down gently, about 10 percent to 15 percent over the past four years.

The Reserve at Lake Keowee was planned around a Jack Nicklaus-designed golf course, so pitched into this mix were a large number of golf plots. Here, too, Wyman and Sperry felt the need to differentiate.

The lots with prime views, especially over the putting green and beyond to the fairway, were called Pine Golf Views. They were sold originally in the range of $300,000 to $350,000. Today, they’d sell for $275,000.

The non-prime fairway sites, called Fairway Golf Views, sold four years ago for $300,000. Now they sell for $200,000.

Finally, in the development were a large number of interior lots with no views and no waterfront. At one time these sold for $140,000, but as Wyman notes, today they are almost impossible to sell. No one wants them.

"If you really wanted to get rid of an interior lot, it might go for $70,000," says Wyman. "These are the dog lots and historically they are interesting because at the height of the boom, in 2005 and 2006, prices skyrocketed. Now, here in 2010, real estate agents won’t even list them. They are a dime a dozen."

If there is anything Wyman wants readers of the study to take with them, it’s not only that developers have to be very specific when creating price variations due to, among other factors, topography and access to water, but for investors, the premium-quality properties not only hold their value better but are easier to sell because high-end buyers have the cash to make a purchase during times when there is little credit.

Wyman also noted that properties with the residence already constructed are taking longer to sell than properties that are still in a natural state, which is probably because speculators who still have capital buy raw land but users who want to live in the houses unfortunately don’t have the money readily available to buy what is essentially a second home.

"If you’re a user/buyer and have the money, wait until you are ready to use the property before buying," says Wyman. "If you are an investor, then you should wait until you can get a special deal. There’s no hurry for the latter type of buyer — banks are holding onto troubled properties (and) not actively advertising foreclosures."

He adds, "If there is a house on the property, it is more likely to deteriorate in value, so push for a better deal."

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-selling real estate investment book for the Amazon Kindle e-reader.

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