Bargains Get Pricier

In the past 15 years, I have assisted couples in finding homes in golf communities in the Carolinas, Georgia and Florida that ranged in price from $200,000 to $1.2 million, and beautiful pieces of property on which to build from $5,000 to $250,000.  Although inventories have tightened up across the region in the last few years, there are still bargains across the entire price range.  But the definition of “bargain” is changing.

In general, the fundamental value proposition of real estate holds true; price is determined by location.  Typically, the more remotely located golf communities are the least expensive.  However, in the 1990s, as many businesspersons accumulated wealth, some developers decided to load remotely located communities with deluxe amenities — the finest golf courses, nature-walking trails, fitness centers loaded with the latest hi-tech equipment, pools, marinas and even equestrian centers.  In the Carolinas and rural Georgia, the appeal was to the new money in cities like Atlanta and Charlotte.  It wasn’t unusual, before the 2008 recession, to see many second homes valued in the millions in these remote communities, and some of them served as second and even third homes.  Some of the best examples are Reynolds Lake Oconee in Greensboro, GA, about 75 minutes from Atlanta, and the seven Cliffs communities, strung out mostly in the upstate of South Carolina (with one about a half hour from Asheville, NC).

But the 2008 recession put an end to conspicuous purchase of golf community homes, at least for most of the rest of the following decade.  And now, Covid-19 is having its own unique, if inconsistent, effects on retirement and home buying.  A clear pattern has not emerged, but with all those stay-at-home workers potentially moving to lower cost areas of the South, we could very well see a new migration south in the coming few years.  

In some areas, home prices are actually up as inventories shrink.  In others, the market seems to be waiting to figure out whether retirement styles and buying behaviors have changed forever — or at least until there is a vaccine for Covid-19.  For those who are undaunted by the current crisis and see a buying opportunity or just want to get on with their lives as intended before the virus, there are still bargains to be had in terms of entire golf communities and the homes inside them.

What constitutes a “bargain”?

The most basic assessment of a bargain is price — not the overall price of a house, but rather the cost per square foot.  In my 15 years working with couples to identify value in golf community homes, I have tended to look at $100 per square foot as being the magic line below which a home attains extreme bargain status.  The $100 to $125 per square foot range should still be considered bargain range as long as the house is in a quality golf community.  Until recently, such homes have been relatively easy to find, especially in the $300,000 and lower category.  However, the price of materials to build a home and related infrastructure costs (pipes, fiber optic line, road clearing) have escalated, and that has not only pushed up the price of new homes, but it has tended to increase the comparative value of existing homes as well, especially during an environment in which the inventories of homes for sale have shrunk.  Many bargain homes are located in more remote areas of the Southeast, a good distance from services and entertainment options. The formerly magic bargain line of $100 is more like $125 per square foot today.  (See sidebar for some examples.)

Getting What You Pay For

In golf communities where homes tend to begin in the $400,000 range, the definition of bargain becomes less about house value and more about lifestyle value.  Generally speaking, many homes in the mid six figures have a dollar per square foot value in the $150 and up range.  These homes tend to be located in communities with a wider range of amenities, higher quality private clubs and, for the most part, are located in areas with plenty of entertainment options (that is, nearer to urban areas).  It is not unusual to find multiple golf courses inside the gates of these communities and, chances are, many homes come with substantial views — lake, river, mountains or golf course.

The “bargain” in these communities lies beyond the home itself and in the amenities and services you pay a little extra for.  Although plenty of non-golfers live inside the gates of golf communities, most of them do not move to such a place to sit on their patios and watch the world go by.  For them, the communities’ country clubs offer social memberships that provide access to the clubhouses for meals and other events and a feeling of belonging that does not require a regular men’s or ladies golf group.

This is why I stress to couples I work with that they should fold the cost of joining the country club into the overall budget to pay for their house.  The price you pay for your house and the initiation fee for the country club membership are both one-time payments. Once paid, they are gone — until you go to sell your home down the line and the value of belonging to the club is every bit as fundamental to your buyer’s purchase as it was for you. 

Sneak Preview –
An excerpt from my forthcoming book

In September, I will publish a book about how to search for the golf community home that matches your requirements.  Home On The Course subscribers will receive advance notification of the publication date.  Here is an excerpt from the book.

One of the toughest decisions a retired couple makes is moving many miles away from their children and grandkids.  I've met some couples who would not think of moving more than a short car drive from their grandchildren; they see babysitting as their major retirement activity.

But the vast majority, who love their kids and grandkids every bit as much, are happy to be in a warm weather climate a good half-day's drive away, which they see as close enough to react to an emergency back home but far enough to remove the temptation to be everpresent.

There is a way to satisfy the desire for a warmer climate and the ability to get most places within a few hours, and that is by moving to a golf community not too far from a good regional airport or major airline hub, like Charlotte (CLT), Raleigh (RDU), Tampa (TPA), and Atlanta (ATL).  Even regional airports such as Charleston, for example, and Myrtle Beach, offer enough daily flights to major northern cities to put a couple within a half-day return home.  (For example, Charleston International Airport provides eight daily non-stop flights to the New York City area and three to Chicago.)  That also increases the likelihood your family back home will visit you in the summer.

Virtual Presentation:
The Benefits of Moving South to a Planned Community

Larry Gavrich
Founder & Editor
Home On The Course, LLC