In October of 2004, the water levels in Big Bear Lake were at the lowest they had been in decades. With water levels 17 feet 6 inches from full, the word around town was that it would take at least a dozen years of above average precipitation for the lake to back to anywhere near full.
Although faced with shrinking shoreline and speculation of continued dry years, some lakefront home buyers took a risk and purchased shallower water lakefronts in the face of record drought.
Fast forward to May 2005. Big Bear Lake's water level had risen 15 feet 3 inches after an El Nino winter unleashed on Big Bear. The lake was almost full at just 2 feet 3 inches from full. Those Big Bear lakefront home purchasers from the previous year who had purchased when the lake was dry had now seen their property values increase 20-30% in some instances.
With the current lake level at 10 feet 3 inches from full, we are seeing a return to the sentiment that was felt in 2004. Many shallow water lakefronts have lost their ability to put their docks in the water and the specter of another dry year has many lakefront home buyers concerned.
As any investor knows, sometimes fear, concern, and increased risk oftentimes mean opportunity. With the NOAA anticipating a strong El Nino winter ahead of us, a replay of the winter of 2005 seems possible. Unfortunately, it all depends on Mother Nature, who is far from reliable.
But if you're not risk averse and have been in the market for a lakefront property, perhaps buying a shallow water lakefront while the lake is down might be something to consider. Recessing waterlines sometimes result in fearful sellers who are more likely to sell at a reduced price. This could be an opportunity if and when Mother Nature decides to cooperate.