Hazards Ahead:
Mind the Traps in Searching for your Golf Home

    A golf home, especially if you are a baby boomer entering your retirement years, could be the last major financial commitment you make in your lifetime.  Likening the search to a round of golf, you are likely to score the best golf home if your search goes smoothly, if you don’t land in the equivalent of a hazard like a sand trap.  Last month in this space, we addressed the shortcomings of looking for a golf home based on price primarily and why a proper search starts with geography –- knowing at the outset whether you want a home in the mountains or the coast, or somewhere in between; and whether you want to live in a remote location or near an array of services.  Lack of agreement between spouses on these basic parameters can set up a hazardous search.  

    The following are a few other “traps” to avoid as you search for your ideal golf home.  
 

Targeting a No-Income Tax State Trap
    No one likes to pay taxes, and we find paying more than we need to particularly distasteful.  This is why when I ask some of my customers where they want to live -– I mean coast or mountains or lake region -– they respond, “A state with low taxes.”  Therefore, they mention Florida and Tennessee, and occasionally Alabama, because those are the southeastern U.S. states that levy no state income taxes.
    But income taxes are only part of the tax picture; states without income taxes have to derive revenue from other sources, which means property taxes, sales taxes and other “use” taxes.  More importantly, there is more to the financial calculation of cost of living than just low taxes.  Sure, a retired couple, for example, with a steady income of six figures may find that a home for six months and a day in Florida, so that they can declare it their state of residence, makes more sense than a home in the Carolinas.  But most of us have or will have more modest retirement income than that, and therefore we should be much more interested in the total cost of living than just that one component of taxation.  (See a few cost of living comparisons below.)
    In that regard, many wonderful places to live in the Carolinas, Georgia and Virginia stack up well against comparable communities in Florida and Tennessee.  The total cost of living in Myrtle Beach and Greenville, SC, for example, is a few percentage points lower than in West Palm Beach and Sarasota, FL, even though South Carolina has a state income tax.  The cost of living in Wilmington, NC, is exactly the same as in Sarasota, according to a calculation at the web site TownHunter.com.  And another comparison calculator, at BestPlaces.net, shows that Chapel Hill, NC, is 22% less expensive than living in Naples, FL. -– and a lot less taxing, heat wise, in the summer.
    In short, the calculation about where you wind up living in the South should be more about total cost of living and lifestyle than it is about taxes.

The Waiting for the Best Price on Your Primary Home Trap
    You worked hard during your career, raised a beautiful family and had a well-formed plan to move to a warm climate and a golf community at retirement.  Then 2008 and Lehman Brothers happened, your retirement portfolio took a severe hit, and almost overnight, your home was worth 40% less.  Today, things are looking much better in that retirement account, but your home is not quite back to its pre-recession value.  Your friends down the block recently sold their home for 85% of its market value before the economy tanked, and they moved to Florida; but you want to wait until your home’s value comes all the way back.
    A simple piece of advice:  DON’T!  Follow the example of your neighbors down the street and take what the market bears if you are otherwise ready to relocate.
    First, the longer you wait, the more you will pay for your next house.  Your neighbors are not the only retirees heading south.  Tens of thousands of others are feeling confident in their home’s value and in their restored financial security.  The massive baby boomer migration that started before the recession, and then stalled, is in full bloom once again.  According to Realtors we speak with in the South, traffic and sales are increasing in their golf communities, and prices are beginning to trend back up as well.  At the same time, companies are not yet hiring substantial numbers of employees in those northern urban areas in which many of us own primary homes.  The chances, therefore, that home prices up North (static supply, light demand) will appreciate as quickly as those in the South (static supply, heavier demand) are remote.  Therefore, a couple who waits too long for their primary home to appreciate in price may eventually have to spend even more for their next home –- or accept less home.
    Another reason to accept a fair, market value price for your primary home is what sophisticated investors consider “opportunity cost,” or the benefits you receive by pursuing an alternate course of action.  By waiting for an unrealistically high price, the couple in our example is ignoring another opportunity in relocating sooner than later -– the differences in cost of living between most cities in the North and locations of excellent golf communities in the significantly less costly South.  A few current comparisons make the point (data courtesy of BestPlaces.net):

Sunset, SC, home to The Reserve at Lake Keowee, has a 26% lower cost of living than does Wellesley, MA.

Aiken, SC, home to Cedar Creek, Mount Vintage and Woodside Plantation, is 31% less expensive than Saratoga Springs, NY.

Burnsville, NC, home to Mountain Air, is 30% less expensive than Farmington, CT.

Greensboro, GA, home to Reynolds Plantation, is 48% less expensive than North Merrick, NY.
(In some cases, the calculations of prices in a particular market may not take into account home prices in local private golf communities.)

    If you live in or near a northern city and have a good assessment of all your current expenses on an annual basis, reduce that by 25% or more to calculate what you will likely save by moving North to South.

The Hurricane Worry Trap
    Hurricanes are serious business, with potentially awful consequences, as we have witnessed in recent years along the east coast.  For some couples who otherwise love the beach and coastal golf courses, the potential for hurricanes is enough to drive them inland to search for their golf community home.  But the fact is that, with rare exception, the odds of a hurricane causing substantial damage to a home in a golf community near the coast are low.  Indeed, because of geography and the way Atlantic storms behave, some coastal golf communities are virtually hurricane proof.
    One such community, The Landings on Skidaway Island near Savannah, has not suffered a damaging hurricane in its 40 years of operation.  If you look at a map of the Georgia coast, you will notice that Savannah is notched into the coastline, well to the west of other east coast cities.  Atlantic storms that move north out of the Caribbean catch the powerful Gulfstream and miss Savannah by many miles.  In the last 100 years, only one hurricane packing winds of more than 80 mph landed in Savannah, but it came out of the Gulf of Mexico, across the panhandle of Florida, and whacked Savannah in the backside.
    Those hurricanes that miss Savannah typically make landfall along the Carolina coast, but even then, the odds of a major storm slamming a particular golf community on or near the coast are slim.  The researchers at BestPlaces.net looked at 100 years of data related to east coast hurricanes and produced a list of those areas most likely to suffer a major storm.  They are, in order of potential:

1.    Southeast Florida (Miami-Fort Lauderdale-West Palm Beach)
2.    Key West and the Florida keys
3.    Southwest Florida (Fort Myers-Naples)
4.    West Florida (Tampa-St. Petersburg-Sarasota-Clearwater)
5.    Outer Banks islands, NC (Cape Hatteras)
6.    Central Texas Gulf coast (Galveston)
7.    Central Florida Atlantic coast (Melbourne-Cocoa Beach)
8.    Florida Panhandle (Pensacola-Panama City)
9.    Central Gulf coast (New Orleans, LA-Biloxi, MS-Mobile, AL)
10.    South Texas Gulf coast (Corpus Christi-Brownsville)

   Since the advent of sophisticated forecasting and the Weather Channel, warnings about impending storms are issued as much as a week in advance.  All east coast states with coastlines maintain sophisticated evacuation plans, and even the most casual vacationer can’t help but notice the “Evacuation Route” signs that festoon all coastal towns’ major roadways.  Major loss of life is not a factor in most storms given these early warnings.  The loss of property, however, is a real concern but, realistically, only in a few select areas.  A couple that loves the beaches and sultry environment of the Low Country of the Carolinas should consider that the odds are long that a major hurricane will spoil their particular paradise.

The Trap of the Perfect Climate
    Some couples fall into the trap of “making perfect the enemy of good” when it comes to climate.  Let’s face it:  Few areas on the face of the earth offer  “perfect” weather year round.  In the U.S., San Diego probably comes closest but it does rain in San Diego and I sat through one of the most violent thunderstorms of my life many years ago while sitting in a dockside restaurant in the city.  San Diego, by the way, has fewer clear days annually than do San Francisco and Los Angeles.  
   One calculation to make when setting out on a search for a golf home is to decide between a two-season or four-season climate.  Naples and most other Florida cities have a two-season climate, with temperate winters and hot and humid summers.  The other extreme in the South is a market like Asheville, NC, where the average temperatures in the summer will be in the low 80s, but the winters can mimic those of New England, with snowy days and temps in the 30s.  (Note:  Some geothermal idiosyncrasies in the western Carolina and Virginia mountains keep a few golf courses there open for all but the coldest and snowiest days.)  You could choose an in-between area like Aiken, SC, a magnet in summer for wealthy 19th Century Charlestonians who fled the heat and malaria of the city, but Aiken can feel like Florida on many summer days.
   In short, there is no perfect climate.  If you don’t mind playing golf before 8 a.m. in summer and can tolerate relentless daytime temperatures in the 90s for a few months each year, target the coasts and flatlands of the Carolinas, Georgia and Florida.  If the heat bothers you, go west to the mountains of North and South Carolina and Virginia.

The Trap of Non-Membership in a Golf Community
    Some couples have only a casual relationship with golf and play just a few times a year.  They like the idea of living in a golf community because of the landscaping around the course, the maintenance of the grounds and their faith that their homes will retain their values because of the viable country club inside the gates.  But they decide not to join the club.  For any but the most reclusive couples, this may be a mistake.  A golf community country club facilitates quick connections for new residents with their neighbors, making it much easier to establish a social life within the gates of the community.  Virtually all golf community country clubs offer a social membership that provides all activities except for golf and, perhaps, tennis at a much lower dues rate.  If you are going to live in a community with a club at its heart, our advice is to at least join at the social level.

Focus Your Golf Home Search With Our Survey
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   The search for a golf home is tough enough (see above) without a game plan.  A couple that doesn’t agree on mountains or coast, home directly on the golf course or not, gated or un-gated community, and how far to be from the nearest supermarket is in for a long and potentially argumentative process.  An effective game plan starts with an understanding, and agreement between partners, of the requirements for your golf home.
    The customers we work with fill out a survey form we developed that helps them focus on their requirements in a golf home and helps us identify those golf communities that best match their criteria.  Our Golf Home Survey is now available online, which makes it simpler to fill out and easier for us to respond quickly with some initial ideas (typically in just a couple of days).
    There is no obligation whatsoever for our input or assistance in setting up visits to those communities that best match your criteria; and we never share your personal information without your express permission.  
   All successful journeys start with a map, and the Home On The Course Golf Home Survey will help you map out your strategy to find the best possible home on the course.  Please fill it out today by clicking here.