LAKE ELSINORE —— With its murky, algae-tinged waters, Lake Tahoe it's not. But to investors and land speculators at least, it seems that Lake Elsinore lakefront and lake-view properties have suddenly become as hot as a greased griddle.

Some empty lakefront properties along Lakeshore Drive are selling for five times what they were priced at a year ago, local real estate broker Phil Williams said Thursday.

In Country Club Heights overlooking the lake, buyers could pick up lots for as little as $15,000 two years ago. Not anymore. Today, similar lots in the hillside community are going for $50,000 to $85,000, depending on the lake view, local real estate agent J.J. Swanson-O'Neal said last week.

A combination of factors is fueling the land rush, real estate experts say: a booming Southwest County real estate market, a strong economy, a shortage of developable land and the prospect of stabilizing lake levels.

Commercial development surges

Developers have plans for two major projects on the lake front.

Orange County developer Marina Developers Inc. recently announced plans to build a boat mall, 300-slip marina, retail center and 600 townhouses just north of the outlet channel, across from The Diamond baseball stadium. WatersEdge Lake Elsinore should be up and running by the second half of 2006, a company official has said.

In January, the City Council approved a 40-year lease with Destination RV Resorts to operate the city-owned Lake Elsinore Recreation Area and Campgrounds at the north end of the lake. The deal calls for Destination to make $17 million in investments to the campground over the next three years.

An official with a company that is partners in the operation said last week that the company plans on turning the park into a "five-star" destination resort. It will include a marina, swimming pools, saunas, up to 20 vacation rental homes and 350 sites for recreational vehicles, he said.

Stabilizing lake levels

A major factor in the surge in commercial real estate projects and spiking land prices has been the prospect of finally being able to stabilize the lake level, according to some investors and real estate experts.

As the city's founding father Franklin Heald stood atop Mount Baldy on a summer's day and first laid eyes on a large body of water shimmering in the distance to the south, he was lucky the year was 1880.

If he had waited a year to climb that mountain, he would have been gazing at a giant mud puddle.

By 1881, when he finally arrived at the lake, it was almost completely dry, according to Lake Elsinore historian Tom Hudson's book, "Lake Elsinore Valley, it's Story 1776-1977."

The whims of Mother Nature have seen that body of water, now known as Lake Elsinore, dry up during periods of extended drought, most recently in the 1960s.

City officials and business leaders have long said that only by stabilizing the lake level and keeping the lake full would Lake Elsinore ever realize its full potential for lakefront development.

It's a matter of debate whether the goal of keeping the lake full has finally been achieved following a decade of lake stabilization projects. Those include the completion of a levee at the south end of the lake in 1993, a 2-year old program to add recycled water and well water to the lake, and a 2003 agreement between the city and Elsinore Valley Municipal Water District to put $650,000 each into an escrow account for water purchases for the lake.

At the time of the deal, water district officials said they used historical data on fluctuating lake levels to determine how much it would cost to buy enough water to keep the lake full.

One real estate agent, however, says that he still isn't convinced that lake officials will be able to prevent the lake from drying up again.

"We've seen times where you could almost walk across the lake; I have been around too long to believe that it has been stabilized," said Norm Harris, who specializes in lakefront property.

He said he attributes the skyrocketing prices to a strong economy and "we only have so much property around the lake."

But one thing is for sure: the likelihood of a full lake in years to come played a role in some developers' decisions to move forward on lakefront projects.

In a recent interview, Marine Developers Inc.'s Chief Executive Officer Dan Hamilton said that a key reason for his firm deciding to proceed with the boat mall development was the city and water district's efforts to keep the lake full.

And an official with Rocky Mountain Recreation Inc., which is working with the company that will be making $17 million in investments at the city-owned campground, said Thursday that one of the reasons the firm decided to make a multi-decade commitment to operate the park is the prospect of lake stabilization.

City code stipulates that homes may only be built on lakefront lots that are 1,267 feet above sea level or higher. That elevation should protect them from flooding during heavy storm seasons.

Broker Williams said that lots along Lakeshore Drive with most of their area sitting below that 1,267 level were selling for about $50,000 a year ago. Today, those same lots are selling for more than $250,000 —— "and (buyers) are showing up with cash," he said.

"In real estate, timing is everything," said Williams, who is also a member of the Elsinore Valley Municipal Water District board.

"If it were Tahoe or Big Bear, nobody would think $250,000 was that expensive," he said.

Steve Kilburn, another real estate agent specializing in lakefront property on the west side of Lake Elsinore, said that a year ago, he sold a 3.1-acre property with 200 feet of lake frontage for $700,000. He said he is about to close escrow on another nearby lakefront property for a sales price of $725,000, and that parcel is less than one-third the size of the property he sold last year.

"People are beginning to realize they aren't making any more lakefront," Kilburn said.

Contact staff writer William Finn Bennett at (951) 676-4315, Ext. 2624, or wbennett@californian.com.