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2010 Newsletters

June 2010

Don't overplay your shots when search for a golf home

 

May 2010

 
    May 2010 


 Champagne golf
on a beer budget 

   Some folks are happy to pay a premium for the classic country club experience inside the gates of their communities.  Others, however, may want that same club experience but either can’t afford or don’t want to pay the surcharge inside the gates.  For them, a viable alternative is to buy their home in a neighborhood and then join a local private club.  The amenities and camaraderie at such a club are not unlike those inside the gates, but the cost of the membership -– and especially the cost of the home –- can be substantially less.

    We recently traveled to the upstate and mid-state areas of South Carolina and found some reasonable prices for both golf membership and homes.  Here are a few examples.  If you are interested in any of these combinations or would like us to identify other nice match-ups of club and home, contact me at This email address is being protected from spambots. You need JavaScript enabled to view it..

Camden CC
Initiation:  $2000.
Dues:  $200/month
Home for sale:  3,114 sq. ft, 5 BR,     3 ½ BA, $299,900
Adjacent to course.

Greenwood CC
Greenwood CC
Greenwood, SC
Initiation:  $0 (current special)
Dues:  $270/month
Home for sale:  3,300 sq. ft, 3 BR,     3 BA, $375,000
Adjacent to course.

Musgrove Mill GC
Musgrove Mill GC
Clinton, SC
Initiation:  $26,000.
Dues:  $325/month
Home for sale:  4,750 sq. ft, 5 BR,     4 ½ BA, $375,000
10 miles from course; membership includes 5 other courses in the Carolinas.

Reader Feedback

      We want to make this newsletter as  useful as possible for you.  If you have comments, critiques, suggestions or observations about the newsletter, please email them to:  This email address is being protected from spambots. You need JavaScript enabled to view it..
      I promise to respond quickly.  Thanks.
  --  Larry Gavrich, Editor

For a Change:  The New Math of Golf Club Membership

     Most of us will never again feel quite as secure about our financial prospects as we did prior to September 2008, when Lehman Brothers filed for bankruptcy.  And this queasiness, of course, infects our spending, especially on the things that are more luxury than necessity -– like golf club membership, for example.

    Twice in my life I felt the irresistible lure to join a golf club.  The first was when I moved to Connecticut in the early 1980s from the New York metro area, where private golf club memberships averaged $15,000 or more.  A terrific private club outside Hartford, Hop Meadow Country Club, was offering a special $1,200 initiation fee, and I leaped at it.  I remained a contented member until I resigned in 2009 because we spent summers away from Connecticut.  I could no longer justify the high per-round cost.

Initiation costs less relevant than dues

    Ten years ago, in preparation for eventual retirement, my wife and I purchased a condo on a “semi-private” golf course in Pawleys Island.  As an inducement to purchase, the developer offered to pay for half the $15,000 initiation fee and included the rest in the cost of the condo.  Again, the deal was impossible to resist.
    Today, though, I would take out a calculator before making either decision.  Hop Meadow now charges an initiation fee of $5,000, still quite reasonable 25 years later.  But monthly dues (assessment included), which were under $300 when I first joined, are now over $600.  Compared with the $75 green fees at excellent daily fee courses, cart included, I would have to play about 100 rounds at Hop Meadow during the seven-month Connecticut golf season to break even.  And within two miles of our Connecticut house, another private club is waiving initiation fees for this year and charging just $3,500 for the golf season.

    At Pawleys Plantation, my club in South Carolina, there really never was a good reason to join a club in the golf loaded Myrtle Beach area -- other than for a sense of belonging.  The Myrtle Beach Passport, a local discount card available to primary and second-home owners, provides incredibly reasonable green fees at more than 80 Grand Strand golf courses, making the break-even point for my $300 monthly dues at Pawleys Plantation about five or six green fees a month at excellent local daily fee courses.  And in a semi-private club –- emphasis on “semi” -- you can’t just walk up and pound one off the first tee box if paying customers are lined up to play.  At least most private clubs can lay claim to that kind of freedom.  For many, that is reason enough to pay the extra tariff for a fully private club. 

Bulking up the portfolio for members

    In the battle to remain competitive, private and semi-private club operators, whether inside or outside the gates of a golf community, are scrambling to find new and different ways of providing value for their existing and prospective members.  The McConnell Golf Group, for example, is signaling the future of private club membership with its aggressive golf course acquisition model.  Led by John McConnell, a former software entrepreneur who sold his business for tens of millions of dollars, the firm has established a portfolio of a half dozen private courses stretching from the Raleigh, NC, area all the way to Litchfield, south of Myrtle Beach.  McConnell members who pay $26,000 to join have full privileges at all the courses.  Compare that to the half dozen courses at The Cliffs Communities, where members also have reciprocal privileges but pay $150,000 in initiation fees. (The Cliffs courses are about 90 minutes from one end to the other; the McConnell courses are four hours from Treyburn in Durham, NC, to The Reserve in SC.)  

    McConnell may be following somewhat a model perfected by the Canongate Group, which provides its members with 26 courses clustered around Atlanta.  Members play free at the Canongate course they join and a few other nearby courses; and they pay modest green fees to play at the remaining Canongate courses (typically no more than $39 per round).  Cost of membership depends on which home course you join, but a $750 initiation fee is typical for full-family golf, with dues of about $2,500 per year.  Golf is year round in Atlanta, making it easy to play at least a round a week, which comes out to about $50 per person ($25 per person if a couple plays a round a week, even less if the family's junior golfer is also using the facilities).

Members-only time at courses open to outsiders

    Other courses that open for outside (non-member) play are nevertheless trying to enhance the existing-member experience as well as entice new members.  For example, each morning at Bay Creek Resort and Club in Cape Charles, VA, which I visited a few weeks ago, the club managers (Billy Casper Golf Management) close one of the two 18-hole courses to outside play, reserving it for members only.  In some communities with multiple semi-private courses, the course operator will restrict to members one course for an entire day (e.g. Kingsmill in Williamsburg, VA).   Such actions provide a nice balance between the need for exclusivity for the members and the members’ interest in the club generating the kind of extra income that helps maintain the grounds and facilities.

    That need for precious extra income is driving private clubs to open their tee sheets to limited outside play.  Boxgroove.com, which has signed agreements with nearly 100 private clubs nationwide, has registered almost 1,000 members who select from among formerly exclusive golf courses.  The clubs can limit frequency of play to times when members don't regularly play, as well as impose other restrictions on Boxgroove access; but as they get used to the extra streams of income, many of the private clubs will loosen up even more.  Their managers and members understand the extra dollars will help keep their private club from starting to look like the municipal course down the street.

    I wrote above that I resigned my membership at Hop Meadow in Simsbury, CT in 2009.  The year I left Hop Meadow, it cost me more than $250 per round on average.   A few months ago, Hop Meadow signed on as Boxgroove’s first course in Connecticut.  As a Boxgroove member, I can now play my old private course for $89, cart included.
 

   Read my Blog      This email address is being protected from spambots. You need JavaScript enabled to view it.
 

Your Subscription:
[SUBSCRIPTIONS]

© 2010 Golf Community Reviews
 
    May 2010 


 Champagne golf
on a beer budget 

   Some folks are happy to pay a premium for the classic country club experience inside the gates of their communities.  Others, however, may want that same club experience but either can’t afford or don’t want to pay the surcharge inside the gates.  For them, a viable alternative is to buy their home in a neighborhood and then join a local private club.  The amenities and camaraderie at such a club are not unlike those inside the gates, but the cost of the membership -– and especially the cost of the home –- can be substantially less.

    We recently traveled to the upstate and mid-state areas of South Carolina and found some reasonable prices for both golf membership and homes.  Here are a few examples.  If you are interested in any of these combinations or would like us to identify other nice match-ups of club and home, contact me at This email address is being protected from spambots. You need JavaScript enabled to view it..

Camden CC
Initiation:  $2000.
Dues:  $200/month
Home for sale:  3,114 sq. ft, 5 BR,     3 ½ BA, $299,900
Adjacent to course.

Greenwood CC
Greenwood CC
Greenwood, SC
Initiation:  $0 (current special)
Dues:  $270/month
Home for sale:  3,300 sq. ft, 3 BR,     3 BA, $375,000
Adjacent to course.

Musgrove Mill GC
Musgrove Mill GC
Clinton, SC
Initiation:  $26,000.
Dues:  $325/month
Home for sale:  4,750 sq. ft, 5 BR,     4 ½ BA, $375,000
10 miles from course; membership includes 5 other courses in the Carolinas.

Reader Feedback

      We want to make this newsletter as  useful as possible for you.  If you have comments, critiques, suggestions or observations about the newsletter, please email them to:  This email address is being protected from spambots. You need JavaScript enabled to view it..
      I promise to respond quickly.  Thanks.
  --  Larry Gavrich, Editor

For a Change:  The New Math of Golf Club Membership

     Most of us will never again feel quite as secure about our financial prospects as we did prior to September 2008, when Lehman Brothers filed for bankruptcy.  And this queasiness, of course, infects our spending, especially on the things that are more luxury than necessity -– like golf club membership, for example.

    Twice in my life I felt the irresistible lure to join a golf club.  The first was when I moved to Connecticut in the early 1980s from the New York metro area, where private golf club memberships averaged $15,000 or more.  A terrific private club outside Hartford, Hop Meadow Country Club, was offering a special $1,200 initiation fee, and I leaped at it.  I remained a contented member until I resigned in 2009 because we spent summers away from Connecticut.  I could no longer justify the high per-round cost.

Initiation costs less relevant than dues

    Ten years ago, in preparation for eventual retirement, my wife and I purchased a condo on a “semi-private” golf course in Pawleys Island.  As an inducement to purchase, the developer offered to pay for half the $15,000 initiation fee and included the rest in the cost of the condo.  Again, the deal was impossible to resist.
    Today, though, I would take out a calculator before making either decision.  Hop Meadow now charges an initiation fee of $5,000, still quite reasonable 25 years later.  But monthly dues (assessment included), which were under $300 when I first joined, are now over $600.  Compared with the $75 green fees at excellent daily fee courses, cart included, I would have to play about 100 rounds at Hop Meadow during the seven-month Connecticut golf season to break even.  And within two miles of our Connecticut house, another private club is waiving initiation fees for this year and charging just $3,500 for the golf season.

    At Pawleys Plantation, my club in South Carolina, there really never was a good reason to join a club in the golf loaded Myrtle Beach area -- other than for a sense of belonging.  The Myrtle Beach Passport, a local discount card available to primary and second-home owners, provides incredibly reasonable green fees at more than 80 Grand Strand golf courses, making the break-even point for my $300 monthly dues at Pawleys Plantation about five or six green fees a month at excellent local daily fee courses.  And in a semi-private club –- emphasis on “semi” -- you can’t just walk up and pound one off the first tee box if paying customers are lined up to play.  At least most private clubs can lay claim to that kind of freedom.  For many, that is reason enough to pay the extra tariff for a fully private club. 

Bulking up the portfolio for members

    In the battle to remain competitive, private and semi-private club operators, whether inside or outside the gates of a golf community, are scrambling to find new and different ways of providing value for their existing and prospective members.  The McConnell Golf Group, for example, is signaling the future of private club membership with its aggressive golf course acquisition model.  Led by John McConnell, a former software entrepreneur who sold his business for tens of millions of dollars, the firm has established a portfolio of a half dozen private courses stretching from the Raleigh, NC, area all the way to Litchfield, south of Myrtle Beach.  McConnell members who pay $26,000 to join have full privileges at all the courses.  Compare that to the half dozen courses at The Cliffs Communities, where members also have reciprocal privileges but pay $150,000 in initiation fees. (The Cliffs courses are about 90 minutes from one end to the other; the McConnell courses are four hours from Treyburn in Durham, NC, to The Reserve in SC.)  

    McConnell may be following somewhat a model perfected by the Canongate Group, which provides its members with 26 courses clustered around Atlanta.  Members play free at the Canongate course they join and a few other nearby courses; and they pay modest green fees to play at the remaining Canongate courses (typically no more than $39 per round).  Cost of membership depends on which home course you join, but a $750 initiation fee is typical for full-family golf, with dues of about $2,500 per year.  Golf is year round in Atlanta, making it easy to play at least a round a week, which comes out to about $50 per person ($25 per person if a couple plays a round a week, even less if the family's junior golfer is also using the facilities).

Members-only time at courses open to outsiders

    Other courses that open for outside (non-member) play are nevertheless trying to enhance the existing-member experience as well as entice new members.  For example, each morning at Bay Creek Resort and Club in Cape Charles, VA, which I visited a few weeks ago, the club managers (Billy Casper Golf Management) close one of the two 18-hole courses to outside play, reserving it for members only.  In some communities with multiple semi-private courses, the course operator will restrict to members one course for an entire day (e.g. Kingsmill in Williamsburg, VA).   Such actions provide a nice balance between the need for exclusivity for the members and the members’ interest in the club generating the kind of extra income that helps maintain the grounds and facilities.

    That need for precious extra income is driving private clubs to open their tee sheets to limited outside play.  Boxgroove.com, which has signed agreements with nearly 100 private clubs nationwide, has registered almost 1,000 members who select from among formerly exclusive golf courses.  The clubs can limit frequency of play to times when members don't regularly play, as well as impose other restrictions on Boxgroove access; but as they get used to the extra streams of income, many of the private clubs will loosen up even more.  Their managers and members understand the extra dollars will help keep their private club from starting to look like the municipal course down the street.

    I wrote above that I resigned my membership at Hop Meadow in Simsbury, CT in 2009.  The year I left Hop Meadow, it cost me more than $250 per round on average.   A few months ago, Hop Meadow signed on as Boxgroove’s first course in Connecticut.  As a Boxgroove member, I can now play my old private course for $89, cart included.
 

   Read my Blog      This email address is being protected from spambots. You need JavaScript enabled to view it.
 

Your Subscription:
[SUBSCRIPTIONS]

© 2010 Golf Community Reviews
-->

April 2010

 
    April 2010 


    What price privacy 

   What it costs to join and play at selected private clubs in a few of the best golf communities in the southern U.S. (18 holes unless noted; fees and monthly dues are for “full-family” golf, which covers a couple, plus (typically) children who live at home.  No distinction is made for equity vs. non-equity membership; contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more info.


thumb_DSC_0047
Dataw Island Golf Club
St. Helena Island, SC
36 holes
Designers:  Arthur Hills, Tom Fazio
Initiation:  $43,000
Dues:  $590 per month

The Landings
Savannah, GA
108 holes
Designers:  Tom Fazio, Arthur Hills, Arnold Palmer, Willard Byrd
Initiation:  $30,000
($33,000 after April 30)
Dues:  $565.50

thumb_DSC_0359
University of Texas Golf Club
Austin, TX
Designer:  Bechtol/Russell
Initiation:  $35,000 to $40,000
Dues:  $400

Governors Club
Chapel Hill, NC
27 holes
Designer:  Jack Nicklaus
Initiation:  $33,000
Dues:  $589

thumb_DSC_0146
Briar’s Creek
John Island, SC
Designer:  Rees Jones
Initiation:  $100,000
Dues:  $975

 

thumb_DSC_0043
Daniel Island Club
Daniel Island, SC
36 holes
Designers: Rees Jones, Tom Fazio
Initiation:  $85,000
Dues:  $630

River Landing
Wallace, NC
36 holes
Designer:  Clyde Johnston  
Initiation:  $28,000
Dues:  $395

Reader Feedback

      We want to make this newsletter as  useful as possible for you.  If you have comments, critiques, suggestions or observations about the newsletter, please email them to:  This email address is being protected from spambots. You need JavaScript enabled to view it..
      I promise to respond quickly.  Thanks.
  --  Larry Gavrich, Editor

No time like the right time:
But is it the right time to buy?

     The real estate agents’ mantra serves them well through good markets and bad:  “It’s a great time to buy.”  Easy for them to say, since when prices increase annually, of course it is a good time to buy, the presumption being that prices will continue to trend up.  And when prices plummet, as of course they have over the last four years, the real estate industry can make the same claim because the market eventually exerts its reverse gravitational pull and restores prices to their former lofty perches (not to mention that, in a buyers market, many sellers are positively desperate to sell, with no reasonable offer refused).  Therefore, we real estate agents can never be wrong.  The sun will always come up tomorrow…unless it doesn’t.

Golf community buyers coming off the sidelines

     A recent spate of renewed buyer interest in southern golf communities and other planned developments has real estate agents from Virginia to Florida in an especially optimistic lather.  A dozen agents I have spoken with in the last month say the numbers of lookers in the first quarter of the year were significantly higher than a year ago; and a few are actually buying.
      This renewed spate of interest is hitting home for me as well.  This month, and with my help, four customers of Home On The Course LLC, my advisory business, are visiting communities in the Carolinas and Georgia, guided by real estate agents I have recommended.  I am talking with other couples planning their own prospecting trips this summer.  These folks are from all over the U.S., including Hawaii, and their timeframes to buy a retirement home have gone from an average three-to-five years in 2009 to less than two years today.  People are coming off the sidelines because they have renewed confidence in the stock market, if not the housing market.  Some saw the post-Lehman Brothers era as a great stock-buying opportunity, assuming they had anything left to invest, and their gains over the last year are fueling their decisions to buy the retirement homes they had in mind before the market kerfuffle.

Will home prices in the south drop more?  Should you care?

      I am asked frequently “Is this a good time to buy?” and the follow-up question, “Will home prices drop more?”  My honest answers are, respectively, “Depends” and “Doesn’t matter.”  To be blunt, the first question is incomplete and the second one is irrelevant.  Here’s what I mean:
      That first question should be “Is this a good time for us to buy?”  The decision to make such a big investment should always be driven by personal concerns, those related to financial and lifestyle interests.  The answer to the question may be significantly different, say, for the couple who bought their home 20 years ago and has paid off their mortgage, as opposed to the couple who bought their primary home a couple of years before the housing market tanked and will be lucky to recoup their original purchase price today.  The former could very well have enough equity to pay in cash for their new golf community home; the latter is likely to require at least some financing.  But borrowing is not necessarily a deal breaker, even for couples on essentially fixed incomes, because mortgage interest rates remain near historic lows.
      The financial component is mitigated, in many cases, by the cost of living differences between where people live now and where they might want to relocate in the south.  Where to Retire magazine, which is not my preferred source for objective information about communities and towns -– their editorial “advice” seems to track too closely with who advertises -– nevertheless provides a handy and eye-opening comparison of costs of living for major towns in northern and southern metro areas.

One way to give yourself a big raise:  Move  

     The differences are stark enough that a couple living in, say, Washington, D.C., could decrease their annual costs by 26% by moving to Asheville, NC, and by 31% by moving to Wilmington, NC.  A Boston couple would spend 29% less living in the Myrtle Beach area, or 32% less in Greenville, SC.  Spending levels are different one couple to the next, but if you factor in taxes and medical, food and entertainment costs (including golf), as well as all the other components of COLA, many couples spend more than $50,000 a year.  One New Jersey couple I am assisting told me their property taxes are $17,000 annually; comparable annual taxes in a community they are looking at in North Carolina equal one-month’s payments in New Jersey! 
     In short, a 25% or 30% annual savings on such spending can be a persuasive part of the calculation to move or not to move, regardless of what price your primary home fetches.
     Like many of you who are reading this, the value of my own primary home (in Connecticut) has dropped by double digits since 2006.  But I bought my home in the 1990s –- 1993 to be exact –- and it is worth more than my wife and I paid for it.  In the flotsam and jetsam of the housing market the last few years, the wild price appreciations of between the mid-90s and 2006 are but dim memories.  However, if you bought your home before 2000 anywhere but, say, Detroit or Las Vegas, and have not used it as an ATM, then you almost certainly have a nice down payment or the full amount for your next home.

Waiting for that perfect price could be a fool’s errand   

     It is tempting to wait until some buyer falls in love with your special house and pays you a few percentage points above its true market value.  This is a fool’s errand, though, especially for those who have planned for some time to relocate to their dream retirement home.  Your home may appreciate in the next few years -– but so too will the home you want to buy in Asheville or Savannah or Myrtle Beach.  A good percentage of the 76 million baby boomers hold to the dream of a retirement in a warm weather location, and as they begin to re-actualize their dreams, what do you think will happen to the prices of homes in the choicest locations in the southern U.S.?  You may get another 5% for your primary home in, say, Huntington, NY, but you could very well pay 10% extra for that dream home in Chapel Hill, NC.
     And that is why the question about the future of home prices is essentially irrelevant.  If prices continue to trend down, they are almost certain to do so more steeply in the less desirable north than the south.  And if they move up, which historic precedent says they will do, the increase will be faster and farther where the sun shines on the golf courses and on the cost of living.  If you have a house with equity and a plan to move to your dream retirement home, don’t let perfect be the enemy of this good time to execute your plan.

I am currently working with a half dozen couples who plan to relocate to a southern golf community in the next year or two, as well as others considering a vacation home now as preparation for a retirement home later.  I have time to take on a few more customers.  If you are considering a move to a southern golf community and would like an expert –- and free – advisory service to help you, please contact me at This email address is being protected from spambots. You need JavaScript enabled to view it. or call (860) 675-1491.
 

   Read my Blog      This email address is being protected from spambots. You need JavaScript enabled to view it.
 

Your Subscription:
[SUBSCRIPTIONS]

© 2010 Golf Community Reviews
 
    April 2010 


    What price privacy 

   What it costs to join and play at selected private clubs in a few of the best golf communities in the southern U.S. (18 holes unless noted; fees and monthly dues are for “full-family” golf, which covers a couple, plus (typically) children who live at home.  No distinction is made for equity vs. non-equity membership; contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more info.


thumb_DSC_0047
Dataw Island Golf Club
St. Helena Island, SC
36 holes
Designers:  Arthur Hills, Tom Fazio
Initiation:  $43,000
Dues:  $590 per month

The Landings
Savannah, GA
108 holes
Designers:  Tom Fazio, Arthur Hills, Arnold Palmer, Willard Byrd
Initiation:  $30,000
($33,000 after April 30)
Dues:  $565.50

thumb_DSC_0359
University of Texas Golf Club
Austin, TX
Designer:  Bechtol/Russell
Initiation:  $35,000 to $40,000
Dues:  $400

Governors Club
Chapel Hill, NC
27 holes
Designer:  Jack Nicklaus
Initiation:  $33,000
Dues:  $589

thumb_DSC_0146
Briar’s Creek
John Island, SC
Designer:  Rees Jones
Initiation:  $100,000
Dues:  $975

 

thumb_DSC_0043
Daniel Island Club
Daniel Island, SC
36 holes
Designers: Rees Jones, Tom Fazio
Initiation:  $85,000
Dues:  $630

River Landing
Wallace, NC
36 holes
Designer:  Clyde Johnston  
Initiation:  $28,000
Dues:  $395

Reader Feedback

      We want to make this newsletter as  useful as possible for you.  If you have comments, critiques, suggestions or observations about the newsletter, please email them to:  This email address is being protected from spambots. You need JavaScript enabled to view it..
      I promise to respond quickly.  Thanks.
  --  Larry Gavrich, Editor

No time like the right time:
But is it the right time to buy?

     The real estate agents’ mantra serves them well through good markets and bad:  “It’s a great time to buy.”  Easy for them to say, since when prices increase annually, of course it is a good time to buy, the presumption being that prices will continue to trend up.  And when prices plummet, as of course they have over the last four years, the real estate industry can make the same claim because the market eventually exerts its reverse gravitational pull and restores prices to their former lofty perches (not to mention that, in a buyers market, many sellers are positively desperate to sell, with no reasonable offer refused).  Therefore, we real estate agents can never be wrong.  The sun will always come up tomorrow…unless it doesn’t.

Golf community buyers coming off the sidelines

     A recent spate of renewed buyer interest in southern golf communities and other planned developments has real estate agents from Virginia to Florida in an especially optimistic lather.  A dozen agents I have spoken with in the last month say the numbers of lookers in the first quarter of the year were significantly higher than a year ago; and a few are actually buying.
      This renewed spate of interest is hitting home for me as well.  This month, and with my help, four customers of Home On The Course LLC, my advisory business, are visiting communities in the Carolinas and Georgia, guided by real estate agents I have recommended.  I am talking with other couples planning their own prospecting trips this summer.  These folks are from all over the U.S., including Hawaii, and their timeframes to buy a retirement home have gone from an average three-to-five years in 2009 to less than two years today.  People are coming off the sidelines because they have renewed confidence in the stock market, if not the housing market.  Some saw the post-Lehman Brothers era as a great stock-buying opportunity, assuming they had anything left to invest, and their gains over the last year are fueling their decisions to buy the retirement homes they had in mind before the market kerfuffle.

Will home prices in the south drop more?  Should you care?

      I am asked frequently “Is this a good time to buy?” and the follow-up question, “Will home prices drop more?”  My honest answers are, respectively, “Depends” and “Doesn’t matter.”  To be blunt, the first question is incomplete and the second one is irrelevant.  Here’s what I mean:
      That first question should be “Is this a good time for us to buy?”  The decision to make such a big investment should always be driven by personal concerns, those related to financial and lifestyle interests.  The answer to the question may be significantly different, say, for the couple who bought their home 20 years ago and has paid off their mortgage, as opposed to the couple who bought their primary home a couple of years before the housing market tanked and will be lucky to recoup their original purchase price today.  The former could very well have enough equity to pay in cash for their new golf community home; the latter is likely to require at least some financing.  But borrowing is not necessarily a deal breaker, even for couples on essentially fixed incomes, because mortgage interest rates remain near historic lows.
      The financial component is mitigated, in many cases, by the cost of living differences between where people live now and where they might want to relocate in the south.  Where to Retire magazine, which is not my preferred source for objective information about communities and towns -– their editorial “advice” seems to track too closely with who advertises -– nevertheless provides a handy and eye-opening comparison of costs of living for major towns in northern and southern metro areas.

One way to give yourself a big raise:  Move  

     The differences are stark enough that a couple living in, say, Washington, D.C., could decrease their annual costs by 26% by moving to Asheville, NC, and by 31% by moving to Wilmington, NC.  A Boston couple would spend 29% less living in the Myrtle Beach area, or 32% less in Greenville, SC.  Spending levels are different one couple to the next, but if you factor in taxes and medical, food and entertainment costs (including golf), as well as all the other components of COLA, many couples spend more than $50,000 a year.  One New Jersey couple I am assisting told me their property taxes are $17,000 annually; comparable annual taxes in a community they are looking at in North Carolina equal one-month’s payments in New Jersey! 
     In short, a 25% or 30% annual savings on such spending can be a persuasive part of the calculation to move or not to move, regardless of what price your primary home fetches.
     Like many of you who are reading this, the value of my own primary home (in Connecticut) has dropped by double digits since 2006.  But I bought my home in the 1990s –- 1993 to be exact –- and it is worth more than my wife and I paid for it.  In the flotsam and jetsam of the housing market the last few years, the wild price appreciations of between the mid-90s and 2006 are but dim memories.  However, if you bought your home before 2000 anywhere but, say, Detroit or Las Vegas, and have not used it as an ATM, then you almost certainly have a nice down payment or the full amount for your next home.

Waiting for that perfect price could be a fool’s errand   

     It is tempting to wait until some buyer falls in love with your special house and pays you a few percentage points above its true market value.  This is a fool’s errand, though, especially for those who have planned for some time to relocate to their dream retirement home.  Your home may appreciate in the next few years -– but so too will the home you want to buy in Asheville or Savannah or Myrtle Beach.  A good percentage of the 76 million baby boomers hold to the dream of a retirement in a warm weather location, and as they begin to re-actualize their dreams, what do you think will happen to the prices of homes in the choicest locations in the southern U.S.?  You may get another 5% for your primary home in, say, Huntington, NY, but you could very well pay 10% extra for that dream home in Chapel Hill, NC.
     And that is why the question about the future of home prices is essentially irrelevant.  If prices continue to trend down, they are almost certain to do so more steeply in the less desirable north than the south.  And if they move up, which historic precedent says they will do, the increase will be faster and farther where the sun shines on the golf courses and on the cost of living.  If you have a house with equity and a plan to move to your dream retirement home, don’t let perfect be the enemy of this good time to execute your plan.

I am currently working with a half dozen couples who plan to relocate to a southern golf community in the next year or two, as well as others considering a vacation home now as preparation for a retirement home later.  I have time to take on a few more customers.  If you are considering a move to a southern golf community and would like an expert –- and free – advisory service to help you, please contact me at This email address is being protected from spambots. You need JavaScript enabled to view it. or call (860) 675-1491.
 

   Read my Blog      This email address is being protected from spambots. You need JavaScript enabled to view it.
 

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© 2010 Golf Community Reviews
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June 2010

May 2010

April 2010

March 2010

 
    March 2010 

One email away from
your dream home
on the course

    In the last few weeks, more and more couples have contacted me to ask for advice and help in finding them a home in a golf community.  They are from California, Connecticut, New Jersey, Oregon, Michigan and even Hawaii, and they believe the time is right in their lives and in the real estate market for a move.  Prices in southern golf communities generally are at their lowest in nearly a decade, and as demand picks up in the most popular places in the south, so too will prices.  Now may be the peak (some might say "trough") of an historic buyer's market.
     I have published more than a thousand articles about golf real estate, including more than 100 objective reviews.  I have assembled into a network dozens of experienced, highly professional real estate agents who stand ready to provide advice and direct support to my customers.  From coast to mountains, I have helped my customers purchase both lots on which to build their dream homes or re-sale homes at bargain prices.  
     I do not charge a fee for my services and my customers are never under any obligation to buy a home with my help.  For a free consultation, contact me today by clicking here or calling me at (860) 205-0464.  Let’s work together to put you on the right course.

Larry Gavrich,
Founder & Editor
Home On The Course, LLC

Rent with option to learn the neighborhood

        You can visit a golf community over a few days and still not know everything about it.  It takes weeks, if not months, to determine if the residents are friendly; if the golf course is well-managed and if it drains properly after a hard rain; if the food is consistently good in the clubhouse; and if the traffic outside the gates is always as free flowing as it seemed on your only other visit.
     For those who are able to, leasing a home for a few months to as much as a year can answer all these questions and more, and help you determine if the golf community you think is the best for you truly is.
     The following are examples of current listings for long-term rentals in some of my favorite golf communities (I have visited them all).  In most cases, the minimum term to lease is six months; however, owners of homes for rent are more willing to negotiate than ever, and you just might be able to wangle a term of just a few months.
     One other caveat:  Make sure to confirm that the owner you rent from has a “transferable” membership in the golf club and that the club will permit you access.  In many of those cases, you will have to pay a guest fee, but that is better than being on the outside looking in.
     If you have any questions about these or any other golf communities, please do not hesitate to contact me.

Governors Club, Chapel Hill, NC
4 BR, 2 ½ BA, 2-car garage,
3,319 sq. ft. Overlooks lake.
$2,500 per month
27 holes of Jack Nicklaus golf

Kenmure, Flat Rock, NC
4 BR, 2 BA, 2 half BA, 2,100 sq. ft.
$2,400 to $4,250 per month
Joe Lee designed golf course

Connestee Falls, Brevard, NC
3 BR, 2 ½ BA condo
$1,300 per month
George Cobb designed golf course

Daniel Island, SC
4 BR, 4 1/2 BA, 2,300 sq. ft.
$2,400 per month
1 BR apt. over garage

Ocean Ridge, Sunset Beach, NC
3 BR, 2 BA (sq. ftge. not available)
$1,000 per month
On fairway of Lions Paw course

Wachesaw Plantation,
Murrells Inlet, SC
3 BR, 2 BA (sq. ftge. not available)
$1,100 per month
Tom Fazio golf

Glenmore, Keswick, VA
3 BR, 2 BA, 2,100 sq. ft.
$2,600 per month
John LaFoy golf, near Charlottesville

Reader Feedback

      We want to make this newsletter as  useful as possible for you.  If you have comments, critiques, suggestions or observations about the newsletter, please email them to me at This email address is being protected from spambots. You need JavaScript enabled to view it..
      I promise to respond quickly.  Thanks.
  --  Larry Gavrich, Editor

Best of both worlds…but with only one home

    When things were nice and flush in the stock market, some people bought a vacation place that we intended to use as a permanent second home during retirement.  With their investments throwing off anywhere from a conservative 5% to 12% returns, they could follow the advice of the worldly philosopher Alfred E. Neuman, who famously said, “What, me worry?”
     But quicker than you can say “Lehman Brothers,” those days ended.  Today, two homes seem like a luxury to those buffeted by stock portfolio and 401K losses.  And although we have regained some of our stock market losses, and prices of vacation homes may have plummeted to Y2K levels, the market chaos of the last few years and the financial frailty of many planned developments are still fresh in our minds, making us skittish about additional real estate investments.
    Yet, as another philosopher, Woody Allen, once said, “The heart wants what the heart wants.”  Therefore, as we retool our expectations and plans, we contemplate if there is a way for us to get as much pleasure (and flexibility) out of one retirement home as we intended out of two, and without spending all the inheritance our kids expect.
     One of our dedicated readers, Mike Tower, and his wife Sandy have found a way to have it all, without risk.  Mike explains below:

    Over the past several decades it seemed that, for many, the American dream retirement would include two residences -- perhaps even more for the ultra wealthy -- that would permit enjoyment of ideal weather year-round.   The few perfect-climate locations – think Rancho Santa Fe in California, for example – have always been well beyond the reach of any but the wealthiest.  For the rest, the two-home solution split the difference between summers up north and winters down south.  The prime benefit of second-home ownership is that you always do have a place to go to seasonally.  If your primary home is in New England, for example, a winter place in Florida is a great escape from the burdens of shoveling your driveway or suffering intermittent power outages.  
    Yet with the recession of the last five years, people are shelving their plans for two homes in retirement.  Second-home ownership ties up significant amounts of capital, including for maintenance, mortgage interest (if you finance the purchase), homeowner association fees, and utilities.  And never forget that you are paying taxes and other costs for both your primary and vacation homes, even when you are not using one or the other.

Owners, renters and intersecting interests

    Another consideration is the location you choose.  Your second home might be in your dream place today, but will it always be?  During the irrational exuberance of the late ‘90s and early ‘00s, it was easy to think of these properties as investments because their values were a straight line up.  Now many of them are challenged by the escalating costs associated with amenities that seemed much more easily sustainable just six years ago.   What once seemed a sure thing now feels like speculation to many of us.
    Over the past few years, we have seen a confluence of those who own second homes and need to generate some income from them, and those who are reluctant to make an investment in vacation home ownership.   The result is a brisk vacation rental market, fueled especially by the creation of many Internet sites that specialize in helping connect renters with owners or property managers.
    There are too many sites to list here, but they include such popular addresses as www.homeaway.com, or www.vrbo.com (the latter an anagram for “vacation rental by owner”).  Both sites specialize in properties of just about every type throughout the world.  The sites are easy to navigate; you can literally just pick a spot on a map and focus on that area, nearby towns and even local neighborhoods.

Tips for a successful renting experience

    Our own experience leads us to offer the following advice about online renting:  

  • Make sure the owners show lots of pictures of every room and every view.  If they don’t show you a picture of the master bath or views from the home, they may very well have a good reason.  If you like the pictures, ask the owner when they were taken.  I prefer those sites that actually show a 360-degree rotating picture of every room and view.  You may choose, of course, to rely on local rental/property managers, but in most cases you will pay a lot for the middleman role these folks provide.
  • If you prefer features such as HDTV, ask if they have it.  You will find dozens of listings that will suit you, so don’t be shy about your specific interests.  
  • Ask the owner for the address of the property; then access Google or Bing maps that show you the exterior view of the home and the surrounding neighborhood.  This is one way to ensure that, for example, a “golf course view” is truly that.  
  • Try to find renters who will accept payment by credit card; it is a lot easier to dispute a credit card charge than if you paid by personal check, although many of the rental websites offer protection against owner fraud (best to stick to those sites).  
  • If you really want to play it safe, do what we have done on some trips: Arrive in the area in which you intend to rent, check into a hotel, and then spend two or three days driving by the places you researched on the Internet.
  • If you are renting in a private golf community with the intention of playing the golf course, make sure the owner of the home you rent has playing privileges that are transferable to you for the duration of your stay.  Ask about any restrictions, and about how you pay for things like meals and other extras (many private clubs do not accept credit cards or cash; they bill members directly).  We have stayed in golf communities in which all I could do was look at the golf course, like the kid outside the candy shop.

How to live in South Carolina…and Paris, Greece, Australia

    One of the big bonuses to renting rather than owning a vacation home is that you can select a different destination location every year.  My wife and I have rented in three different locations in the Palm Springs area of California and two in Florida for three months each winter over the past five years.  In all cases we were very satisfied with the property we selected.  We enjoy the process of deciding each year where we want to go next and then spending a few weeks looking through all the sites for options.  For us, it really has enhanced our ability to deeply explore local cultures.
    I have a friend who is planning to retire in the next two years.  He and his wife have a vacation home in South Carolina and are going to shed their primary home and use SC as their base.  They are planning to spend a couple of months each year renting apartments in places like France, Greece, Ireland and Australia, as well as New York, Boston and Chicago.  They think they can fetch about $600,000 for the home they have owned in New England for 20 years and which is fully paid for.  They plan to “bank” the proceeds and use the earned interest to finance their overseas stays.  For the equivalent of a modest 2% interest, or $12,000, they believe they can squeeze out two months in, say, Paris, where comfortable apartments are currently renting for about $5,000 per month.  That is a fine financial alternative to owning a second home, and they will have the extra opportunities to explore other places in-depth, instead of the standard “appetizer tour.”
    The real bonus today is the housing market slump or, as I like to think of it, a perfect example of speculation gone awry.  It is simply amazing to see the number of homes and condos for rent (or sale) in all the most popular seasonal destinations.  Pick your dream location and prepare to see an amazing array of residences for rent at incredibly low prices.

$2 million home for less than $90 per night

    Last winter we rented a beautiful new 4,000 sq. ft. penthouse condo right on the beach in Destin, FL, that sold new in 2007 for just under $2 million.  We were there from January through March.  Our total cost to rent, including taxes, came out to less than $90 per day. Admittedly it was the off-season for this area, but the winters there are very mild with no crowds.  This same condo in the summer rents for $3,000 per week.  
    Next year we are considering going back to Destin for the same time frame, and I just found a two-year old 24th floor penthouse with amazing views.  I contacted the owner via email and asked for his best price.  He quoted me $4,995 all-inclusive for the three months.  That turns out to be around $55 per night.
    The final piece of advice is that you have to remember that for now -- and likely for the next few years -- it is an absolute renters’ (and buyers') market.  There are far more properties for rent than there are renters.  For that reason I suggest that you wait until you are closer to your desired travel dates before you negotiate a rental; an un-rented residence, after all, is like an empty airplane seat.  I always tell the property owner that we are a married couple in our mid-60s , non-smokers and with no pets.  I also tell them that we are interested in their property if they can make the offer as attractive as possible.  So far nobody has been offended, and they have always reduced their prices.
    This strategy to rent rather than buy a vacation home obviously is not for everyone.  But for my wife and me, this is the way we will “own” our second home for the foreseeable future.
Happy travels,
Mike Tower

Mike Tower was born and raised in the Indianapolis area, was graduated from Indiana University (BS degree) and Purdue (MS) and spent the majority of his career with Indianapolis-based pharmaceutical maker Eli Lilly Company.  Mike and his childhood sweetheart, Sandy, have been married for 46 years and have a son and two grandchildren.  The Towers have lived for five years at Champion Hills in Hendersonville, NC, where Mike claims he may be “the worst 10 handicap golfer ever.”  Of course, there are millions of golfers who would love to make that same claim.
 

   Read my Blog      This email address is being protected from spambots. You need JavaScript enabled to view it.
 

Your Subscription:
[SUBSCRIPTIONS]

© 2010 Golf Community Reviews
 
    March 2010 

One email away from
your dream home
on the course

    In the last few weeks, more and more couples have contacted me to ask for advice and help in finding them a home in a golf community.  They are from California, Connecticut, New Jersey, Oregon, Michigan and even Hawaii, and they believe the time is right in their lives and in the real estate market for a move.  Prices in southern golf communities generally are at their lowest in nearly a decade, and as demand picks up in the most popular places in the south, so too will prices.  Now may be the peak (some might say "trough") of an historic buyer's market.
     I have published more than a thousand articles about golf real estate, including more than 100 objective reviews.  I have assembled into a network dozens of experienced, highly professional real estate agents who stand ready to provide advice and direct support to my customers.  From coast to mountains, I have helped my customers purchase both lots on which to build their dream homes or re-sale homes at bargain prices.  
     I do not charge a fee for my services and my customers are never under any obligation to buy a home with my help.  For a free consultation, contact me today by clicking here or calling me at (860) 205-0464.  Let’s work together to put you on the right course.

Larry Gavrich,
Founder & Editor
Home On The Course, LLC

Rent with option to learn the neighborhood

        You can visit a golf community over a few days and still not know everything about it.  It takes weeks, if not months, to determine if the residents are friendly; if the golf course is well-managed and if it drains properly after a hard rain; if the food is consistently good in the clubhouse; and if the traffic outside the gates is always as free flowing as it seemed on your only other visit.
     For those who are able to, leasing a home for a few months to as much as a year can answer all these questions and more, and help you determine if the golf community you think is the best for you truly is.
     The following are examples of current listings for long-term rentals in some of my favorite golf communities (I have visited them all).  In most cases, the minimum term to lease is six months; however, owners of homes for rent are more willing to negotiate than ever, and you just might be able to wangle a term of just a few months.
     One other caveat:  Make sure to confirm that the owner you rent from has a “transferable” membership in the golf club and that the club will permit you access.  In many of those cases, you will have to pay a guest fee, but that is better than being on the outside looking in.
     If you have any questions about these or any other golf communities, please do not hesitate to contact me.

Governors Club, Chapel Hill, NC
4 BR, 2 ½ BA, 2-car garage,
3,319 sq. ft. Overlooks lake.
$2,500 per month
27 holes of Jack Nicklaus golf

Kenmure, Flat Rock, NC
4 BR, 2 BA, 2 half BA, 2,100 sq. ft.
$2,400 to $4,250 per month
Joe Lee designed golf course

Connestee Falls, Brevard, NC
3 BR, 2 ½ BA condo
$1,300 per month
George Cobb designed golf course

Daniel Island, SC
4 BR, 4 1/2 BA, 2,300 sq. ft.
$2,400 per month
1 BR apt. over garage

Ocean Ridge, Sunset Beach, NC
3 BR, 2 BA (sq. ftge. not available)
$1,000 per month
On fairway of Lions Paw course

Wachesaw Plantation,
Murrells Inlet, SC
3 BR, 2 BA (sq. ftge. not available)
$1,100 per month
Tom Fazio golf

Glenmore, Keswick, VA
3 BR, 2 BA, 2,100 sq. ft.
$2,600 per month
John LaFoy golf, near Charlottesville

Reader Feedback

      We want to make this newsletter as  useful as possible for you.  If you have comments, critiques, suggestions or observations about the newsletter, please email them to me at This email address is being protected from spambots. You need JavaScript enabled to view it..
      I promise to respond quickly.  Thanks.
  --  Larry Gavrich, Editor

Best of both worlds…but with only one home

    When things were nice and flush in the stock market, some people bought a vacation place that we intended to use as a permanent second home during retirement.  With their investments throwing off anywhere from a conservative 5% to 12% returns, they could follow the advice of the worldly philosopher Alfred E. Neuman, who famously said, “What, me worry?”
     But quicker than you can say “Lehman Brothers,” those days ended.  Today, two homes seem like a luxury to those buffeted by stock portfolio and 401K losses.  And although we have regained some of our stock market losses, and prices of vacation homes may have plummeted to Y2K levels, the market chaos of the last few years and the financial frailty of many planned developments are still fresh in our minds, making us skittish about additional real estate investments.
    Yet, as another philosopher, Woody Allen, once said, “The heart wants what the heart wants.”  Therefore, as we retool our expectations and plans, we contemplate if there is a way for us to get as much pleasure (and flexibility) out of one retirement home as we intended out of two, and without spending all the inheritance our kids expect.
     One of our dedicated readers, Mike Tower, and his wife Sandy have found a way to have it all, without risk.  Mike explains below:

    Over the past several decades it seemed that, for many, the American dream retirement would include two residences -- perhaps even more for the ultra wealthy -- that would permit enjoyment of ideal weather year-round.   The few perfect-climate locations – think Rancho Santa Fe in California, for example – have always been well beyond the reach of any but the wealthiest.  For the rest, the two-home solution split the difference between summers up north and winters down south.  The prime benefit of second-home ownership is that you always do have a place to go to seasonally.  If your primary home is in New England, for example, a winter place in Florida is a great escape from the burdens of shoveling your driveway or suffering intermittent power outages.  
    Yet with the recession of the last five years, people are shelving their plans for two homes in retirement.  Second-home ownership ties up significant amounts of capital, including for maintenance, mortgage interest (if you finance the purchase), homeowner association fees, and utilities.  And never forget that you are paying taxes and other costs for both your primary and vacation homes, even when you are not using one or the other.

Owners, renters and intersecting interests

    Another consideration is the location you choose.  Your second home might be in your dream place today, but will it always be?  During the irrational exuberance of the late ‘90s and early ‘00s, it was easy to think of these properties as investments because their values were a straight line up.  Now many of them are challenged by the escalating costs associated with amenities that seemed much more easily sustainable just six years ago.   What once seemed a sure thing now feels like speculation to many of us.
    Over the past few years, we have seen a confluence of those who own second homes and need to generate some income from them, and those who are reluctant to make an investment in vacation home ownership.   The result is a brisk vacation rental market, fueled especially by the creation of many Internet sites that specialize in helping connect renters with owners or property managers.
    There are too many sites to list here, but they include such popular addresses as www.homeaway.com, or www.vrbo.com (the latter an anagram for “vacation rental by owner”).  Both sites specialize in properties of just about every type throughout the world.  The sites are easy to navigate; you can literally just pick a spot on a map and focus on that area, nearby towns and even local neighborhoods.

Tips for a successful renting experience

    Our own experience leads us to offer the following advice about online renting:  

  • Make sure the owners show lots of pictures of every room and every view.  If they don’t show you a picture of the master bath or views from the home, they may very well have a good reason.  If you like the pictures, ask the owner when they were taken.  I prefer those sites that actually show a 360-degree rotating picture of every room and view.  You may choose, of course, to rely on local rental/property managers, but in most cases you will pay a lot for the middleman role these folks provide.
  • If you prefer features such as HDTV, ask if they have it.  You will find dozens of listings that will suit you, so don’t be shy about your specific interests.  
  • Ask the owner for the address of the property; then access Google or Bing maps that show you the exterior view of the home and the surrounding neighborhood.  This is one way to ensure that, for example, a “golf course view” is truly that.  
  • Try to find renters who will accept payment by credit card; it is a lot easier to dispute a credit card charge than if you paid by personal check, although many of the rental websites offer protection against owner fraud (best to stick to those sites).  
  • If you really want to play it safe, do what we have done on some trips: Arrive in the area in which you intend to rent, check into a hotel, and then spend two or three days driving by the places you researched on the Internet.
  • If you are renting in a private golf community with the intention of playing the golf course, make sure the owner of the home you rent has playing privileges that are transferable to you for the duration of your stay.  Ask about any restrictions, and about how you pay for things like meals and other extras (many private clubs do not accept credit cards or cash; they bill members directly).  We have stayed in golf communities in which all I could do was look at the golf course, like the kid outside the candy shop.

How to live in South Carolina…and Paris, Greece, Australia

    One of the big bonuses to renting rather than owning a vacation home is that you can select a different destination location every year.  My wife and I have rented in three different locations in the Palm Springs area of California and two in Florida for three months each winter over the past five years.  In all cases we were very satisfied with the property we selected.  We enjoy the process of deciding each year where we want to go next and then spending a few weeks looking through all the sites for options.  For us, it really has enhanced our ability to deeply explore local cultures.
    I have a friend who is planning to retire in the next two years.  He and his wife have a vacation home in South Carolina and are going to shed their primary home and use SC as their base.  They are planning to spend a couple of months each year renting apartments in places like France, Greece, Ireland and Australia, as well as New York, Boston and Chicago.  They think they can fetch about $600,000 for the home they have owned in New England for 20 years and which is fully paid for.  They plan to “bank” the proceeds and use the earned interest to finance their overseas stays.  For the equivalent of a modest 2% interest, or $12,000, they believe they can squeeze out two months in, say, Paris, where comfortable apartments are currently renting for about $5,000 per month.  That is a fine financial alternative to owning a second home, and they will have the extra opportunities to explore other places in-depth, instead of the standard “appetizer tour.”
    The real bonus today is the housing market slump or, as I like to think of it, a perfect example of speculation gone awry.  It is simply amazing to see the number of homes and condos for rent (or sale) in all the most popular seasonal destinations.  Pick your dream location and prepare to see an amazing array of residences for rent at incredibly low prices.

$2 million home for less than $90 per night

    Last winter we rented a beautiful new 4,000 sq. ft. penthouse condo right on the beach in Destin, FL, that sold new in 2007 for just under $2 million.  We were there from January through March.  Our total cost to rent, including taxes, came out to less than $90 per day. Admittedly it was the off-season for this area, but the winters there are very mild with no crowds.  This same condo in the summer rents for $3,000 per week.  
    Next year we are considering going back to Destin for the same time frame, and I just found a two-year old 24th floor penthouse with amazing views.  I contacted the owner via email and asked for his best price.  He quoted me $4,995 all-inclusive for the three months.  That turns out to be around $55 per night.
    The final piece of advice is that you have to remember that for now -- and likely for the next few years -- it is an absolute renters’ (and buyers') market.  There are far more properties for rent than there are renters.  For that reason I suggest that you wait until you are closer to your desired travel dates before you negotiate a rental; an un-rented residence, after all, is like an empty airplane seat.  I always tell the property owner that we are a married couple in our mid-60s , non-smokers and with no pets.  I also tell them that we are interested in their property if they can make the offer as attractive as possible.  So far nobody has been offended, and they have always reduced their prices.
    This strategy to rent rather than buy a vacation home obviously is not for everyone.  But for my wife and me, this is the way we will “own” our second home for the foreseeable future.
Happy travels,
Mike Tower

Mike Tower was born and raised in the Indianapolis area, was graduated from Indiana University (BS degree) and Purdue (MS) and spent the majority of his career with Indianapolis-based pharmaceutical maker Eli Lilly Company.  Mike and his childhood sweetheart, Sandy, have been married for 46 years and have a son and two grandchildren.  The Towers have lived for five years at Champion Hills in Hendersonville, NC, where Mike claims he may be “the worst 10 handicap golfer ever.”  Of course, there are millions of golfers who would love to make that same claim.
 

   Read my Blog      This email address is being protected from spambots. You need JavaScript enabled to view it.
 

Your Subscription:
[SUBSCRIPTIONS]

© 2010 Golf Community Reviews
-->

March 2010

February 2010

 
    February 2010

Reader Feedback

We want to make this newsletter as useful as possible for you. If you have comments, critiques, sugges- tions or observations about the newsletter, please email them to me at This email address is being protected from spambots. You need JavaScript enabled to view it.. I promise to respond quickly. Thanks. -- Larry Gavrich, Editor

Top to Bottom

Real estate wisdom: Never own the most expensive home in your community. But what about owning the cheapest? We look at the spread between most and least expensive single-family homes currently on the market in some of the south’s best golf communities.

DeBordieu Colony
Georgetown, SC
$4.5 million/$590,000

Landfall
Wilmington, NC
$2.4 million/$389,000

Ford Plantation
Richmond Hill (Savannah), GA
$4.95 million/$750,000

Osprey Cove
St. Marys, GA
$975,000/$180,000

Governors Club
Chapel Hill, NC
$2.35 million/$360,000

Governors Land
Williamsburg, VA
$8.9 million/$450,000

Grande Dunes
Myrtle Beach, SC
$2.8 million/$555,000

Daniel Island
Charleston, SC
$6 million/$389,000

 

Forewarned, forearmed (Part 2)

Lessons learned from a wild decade in the housing market


This month we conclude our look at trends in golf community real estate.

Brutal Truth: Golf designer chic is dead

There was a time –- the Era of Irrational Exuberance -– when developers could hire top-name architects to design their golf courses, slap extra percentage points onto the price of their properties and customers would line up to pay the surcharge (although it wasn’t called that). Such communities sold out just like that (I am snapping my fingers).

Those days have come crashing. From coast to mountains, from mountains to desert, and on the international scene, big names on the golf scorecard no longer ensure stability or even longevity, if they ever did. Jack Nicklaus’ design empire seems to be especially affected, quite possibly because Nicklaus Design takes on more projects than most design shops. In Spain, for example, Polaris World, a company that hoped to build a “Nicklaus Trail,” turned over more than $1 billion in real estate holdings to their banks. Superstition Mountain Golf and Country Club and its two Nicklaus courses, the centerpiece of an upscale Arizona golf community, went to bankruptcy auction last year.
Carolina mountain golf developments especially are proving something of a graveyard for designers with star quality. At River Rock in Cashiers, the Phil Mickelson designed course may not be finished until 2012, if at all; few homes are built in the community, always a bad signal to prospective purchasers. Near Hendersonville, the developers of Seven Falls Golf & River Club insist the Arnold Palmer course there will be finished, despite a lien of $2.5 million by the contractor engaged to build the course.
Palmer did complete his course at Balsam Mountain Preserve (near Waynesville, NC) in 2008, an event I described at GolfCommunityReviews.com back in April as “good timing…before the economy hit the skids.” Oops, sorry about that. Just because a project is finished doesn’t mean it is paid for. Developers Chaffin & Light defaulted on a note for Balsam Mountain a few months after I praised their timing, but luckily their wealthy property owners, out of self-interest, rode to the rescue and provided a bailout.
Cliffs Communities developer Jim Anthony is asking his own property owners to do the same, floating the idea of $60 million in debt financing and putting up the lush Cliffs amenities, including six golf courses, as collateral. Anthony made an unfortunately timed bet on Tiger Woods, whom he hired to design the golf course at High Carolina, The Cliffs newest development. He paid Woods, whose two other projects in Mexico and Dubai are in limbo, a reported design fee of about $18 million more than the top fees veterans like Jack Nicklaus and Tom Fazio command. The Woods hiring may not have been the precipitating cause of The Cliffs troubles, but the debacle may come to symbolize the end of an era of star power in residential golf courses.

Lessons: Back in the day, a top designer’s name on the scorecard translated into higher prices for property owners, but also communicated stability and long-term value. In the current environment, the mighty are not immune from market forces or decisions driven more by ego than good business sense. I’ve played golf community courses by Arthur Hills, John LaFoy and other “second rank” designers that were as good as many courses by Nicklaus and Dye and superior to all but one or two layouts with Arnold Palmer’s name on them. If you are considering a golf community home, first identify an area you like, then a few communities in that area that seem to meet your criteria. Visit them and test out all the golf courses. Those communities without the big-name designer just might offer the biggest values. (Please contact me at This email address is being protected from spambots. You need JavaScript enabled to view it., and I will be happy to help with arrangements for “discovery tours” of any communities that match your requirements.)

Brutal Truth: Golf community promoters try to appeal to the ego in all of us

Three years ago, I received a huge leather-bound marketing piece from the Bella Collina community near Orlando. “Wow,” I thought. The thing looked as if it were handmade just for me. But as a former marketing and communications executive, I am made of cynical stuff, and my “Wow!” was followed quickly by “What the…?”
Today, Bella Collina is one of those floundering Bobby Ginn communities whose short, unhappy life has not included the promised clubhouse and other amenities. Properties in Bella Collina are worth a fraction of the seven figures many residents paid.
In its most aggressive years, The Cliffs Communities spent $14 million annually on magazine advertising and some of the slickest brochures this side of Bobby Ginn’s leather. Their marketing investment, though, was a drop in the bucket compared with the multi-hundreds of millions of dollars they invested in their lush golf courses, wellness centers, nature trails and naturalists, and even a resort in Patagonia. In recent months, Cliffs advertising has ground virtually to a halt as the community tries to retrench from the collapse of the high-end market. Ginn Resorts, on the other hand, has precious little left to retrench.

Lessons: There is no correlation between the amount of money developers spend on marketing materials and the stability and viability of their communities. (Indeed, the correlation seems to be the inverse lately.) Similarly, the connection between home values and the level of amenities in a community is less clear than it was a few years ago. If you don’t need the nature trail, the beach cabana and extra golf courses you will use only occasionally, why pay for them? When it comes to resell your property down the line, you may find that all those amenities held their value about as well as an outdoor backyard swimming pool in Maine.
 

Read my Blog This email address is being protected from spambots. You need JavaScript enabled to view it.
 

Your Subscription:
[SUBSCRIPTIONS]

© 2010 Golf Community Reviews
 
    February 2010

Reader Feedback

We want to make this newsletter as useful as possible for you. If you have comments, critiques, sugges- tions or observations about the newsletter, please email them to me at This email address is being protected from spambots. You need JavaScript enabled to view it.. I promise to respond quickly. Thanks. -- Larry Gavrich, Editor

Top to Bottom

Real estate wisdom: Never own the most expensive home in your community. But what about owning the cheapest? We look at the spread between most and least expensive single-family homes currently on the market in some of the south’s best golf communities.

DeBordieu Colony
Georgetown, SC
$4.5 million/$590,000

Landfall
Wilmington, NC
$2.4 million/$389,000

Ford Plantation
Richmond Hill (Savannah), GA
$4.95 million/$750,000

Osprey Cove
St. Marys, GA
$975,000/$180,000

Governors Club
Chapel Hill, NC
$2.35 million/$360,000

Governors Land
Williamsburg, VA
$8.9 million/$450,000

Grande Dunes
Myrtle Beach, SC
$2.8 million/$555,000

Daniel Island
Charleston, SC
$6 million/$389,000

 

Forewarned, forearmed (Part 2)

Lessons learned from a wild decade in the housing market


This month we conclude our look at trends in golf community real estate.

Brutal Truth: Golf designer chic is dead

There was a time –- the Era of Irrational Exuberance -– when developers could hire top-name architects to design their golf courses, slap extra percentage points onto the price of their properties and customers would line up to pay the surcharge (although it wasn’t called that). Such communities sold out just like that (I am snapping my fingers).

Those days have come crashing. From coast to mountains, from mountains to desert, and on the international scene, big names on the golf scorecard no longer ensure stability or even longevity, if they ever did. Jack Nicklaus’ design empire seems to be especially affected, quite possibly because Nicklaus Design takes on more projects than most design shops. In Spain, for example, Polaris World, a company that hoped to build a “Nicklaus Trail,” turned over more than $1 billion in real estate holdings to their banks. Superstition Mountain Golf and Country Club and its two Nicklaus courses, the centerpiece of an upscale Arizona golf community, went to bankruptcy auction last year.
Carolina mountain golf developments especially are proving something of a graveyard for designers with star quality. At River Rock in Cashiers, the Phil Mickelson designed course may not be finished until 2012, if at all; few homes are built in the community, always a bad signal to prospective purchasers. Near Hendersonville, the developers of Seven Falls Golf & River Club insist the Arnold Palmer course there will be finished, despite a lien of $2.5 million by the contractor engaged to build the course.
Palmer did complete his course at Balsam Mountain Preserve (near Waynesville, NC) in 2008, an event I described at GolfCommunityReviews.com back in April as “good timing…before the economy hit the skids.” Oops, sorry about that. Just because a project is finished doesn’t mean it is paid for. Developers Chaffin & Light defaulted on a note for Balsam Mountain a few months after I praised their timing, but luckily their wealthy property owners, out of self-interest, rode to the rescue and provided a bailout.
Cliffs Communities developer Jim Anthony is asking his own property owners to do the same, floating the idea of $60 million in debt financing and putting up the lush Cliffs amenities, including six golf courses, as collateral. Anthony made an unfortunately timed bet on Tiger Woods, whom he hired to design the golf course at High Carolina, The Cliffs newest development. He paid Woods, whose two other projects in Mexico and Dubai are in limbo, a reported design fee of about $18 million more than the top fees veterans like Jack Nicklaus and Tom Fazio command. The Woods hiring may not have been the precipitating cause of The Cliffs troubles, but the debacle may come to symbolize the end of an era of star power in residential golf courses.

Lessons: Back in the day, a top designer’s name on the scorecard translated into higher prices for property owners, but also communicated stability and long-term value. In the current environment, the mighty are not immune from market forces or decisions driven more by ego than good business sense. I’ve played golf community courses by Arthur Hills, John LaFoy and other “second rank” designers that were as good as many courses by Nicklaus and Dye and superior to all but one or two layouts with Arnold Palmer’s name on them. If you are considering a golf community home, first identify an area you like, then a few communities in that area that seem to meet your criteria. Visit them and test out all the golf courses. Those communities without the big-name designer just might offer the biggest values. (Please contact me at This email address is being protected from spambots. You need JavaScript enabled to view it., and I will be happy to help with arrangements for “discovery tours” of any communities that match your requirements.)

Brutal Truth: Golf community promoters try to appeal to the ego in all of us

Three years ago, I received a huge leather-bound marketing piece from the Bella Collina community near Orlando. “Wow,” I thought. The thing looked as if it were handmade just for me. But as a former marketing and communications executive, I am made of cynical stuff, and my “Wow!” was followed quickly by “What the…?”
Today, Bella Collina is one of those floundering Bobby Ginn communities whose short, unhappy life has not included the promised clubhouse and other amenities. Properties in Bella Collina are worth a fraction of the seven figures many residents paid.
In its most aggressive years, The Cliffs Communities spent $14 million annually on magazine advertising and some of the slickest brochures this side of Bobby Ginn’s leather. Their marketing investment, though, was a drop in the bucket compared with the multi-hundreds of millions of dollars they invested in their lush golf courses, wellness centers, nature trails and naturalists, and even a resort in Patagonia. In recent months, Cliffs advertising has ground virtually to a halt as the community tries to retrench from the collapse of the high-end market. Ginn Resorts, on the other hand, has precious little left to retrench.

Lessons: There is no correlation between the amount of money developers spend on marketing materials and the stability and viability of their communities. (Indeed, the correlation seems to be the inverse lately.) Similarly, the connection between home values and the level of amenities in a community is less clear than it was a few years ago. If you don’t need the nature trail, the beach cabana and extra golf courses you will use only occasionally, why pay for them? When it comes to resell your property down the line, you may find that all those amenities held their value about as well as an outdoor backyard swimming pool in Maine.
 

Read my Blog This email address is being protected from spambots. You need JavaScript enabled to view it.
 

Your Subscription:
[SUBSCRIPTIONS]

© 2010 Golf Community Reviews
-->

January 2010

 
    January 2010 

Reader Feedback

        We want to make this newsletter as  useful as possible for you.  If you have comments, critiques, sugges- tions or observations about the newsletter, please email them to me at This email address is being protected from spambots. You need JavaScript enabled to view it..  I promise to respond quickly.  Thanks.  --  Larry

If we are not your type

        Some of our readers indicate the typesize of the newsletter is a little small for easy readability.  That is easily fixed on both PCs and Macs.  On Macs, hold down the Command key and tap the Shift and + keys simultaneously to increase the type size.  In Microsoft Outlook on the PC, hold down the CTRL key while scrolling down with your mouse.          Hope this helps.

Short and Sweet

        We invited golf communities we have visited and recommend to submit Twitter-like statements about their unique character.  Twitter, of course, puts a limit of 140 characters on its messages (spaces count), forcing inspiration as well as conciseness.  Below is what we received; if you would like more informaton on any of them, contact This email address is being protected from spambots. You need JavaScript enabled to view it..

"6 Championship Golf Courses, 34 Tennis Courts, 2 Deep Water Marinas, and Historic Savannah just minutes from our gates on Skidaway Island." -- The Landings, Savannah, GA

"The Coastal South’s fastest growing community with $40 million in ’09 sales and a brand new Tim Cate golf course. -- Brunswick Forest, Leland, NC

Tom Fazio & Rees Jones 18 Hole Championship Courses. Island Town in heart of City. Awarded tops in Planned Communities. -- Daniel Island, SC

Owl's Nest turns back time. ‘80s pricing for land/construction, low interest rates, huge savings if you have courage to lock-in savings now. -- Owl's Nest, Campton, NH

An oceanfront community in harmony w/ nature, offers suburb amenities & an unbeatable lifestyle w/ golf, tennis, dining, spa, shops & more. -- Amelia Island Plantation, FL

 

Recent comments from the trenches of the housing market

“Compared to a year ago, there are now 15% fewer homes on the market,” according to real estate agency Keller Williams, adding that the end-of-November inventory of 6.5% was close to the 6% that is considered “balanced.”

House inventory in the Lake Norman, NC area dropped from about 25% in Q4 ’08 to 17% in Q4 ‘09, wrote Diane Aurit who publishes the “Best Real Estate Lake Norman” blog.  Ms. Aurit added that, “Homes priced at or above $900,000 represented 7.6% of our sales while they make up 27% of our inventory.”

“Construction levels will stay low and my best guess is that housing prices — the 20 city Case-Shiller average — will be within 5% of current level, one side or the other.”  -- Howard Glaeser, Harvard University in the Wall Street Journal.

“…things are pretty positive. That’s not just spin. Things are getting better.”  -- Nick Sabatine, head of the Greater Greenville (SC) Association of Realtors on a sharp November increase of homes sold in Greenville.  South Carolina unemployment figures stand at 12.3%, highest in the nation.

“…you can’t just slice off your bathroom and sell it on the market” if you find yourself in need of cash  -- Karen Pence, Federal Reserve real estate economist, at the American Economic Association Meeting, making the point that housing is a lousy investment.

 

Forewarned, forearmed

Lessons learned from a wild decade in the housing market


     We learn from our mistakes more than we do from our successes.  If that old axiom is true, those of us considering the purchase of a home in a golf community, or any real estate for that matter, are both older and wiser than we were a decade ago.

     Certainly those who rushed to catch the buying wave in the early part of the decade might have pondered a little longer the laws of gravity as they applied to home prices.  With prices now having retreated to early 2000s levels, is now time to spring for that home in a golf community, assuming you have some equity?  And what does the last decade teach us about searching for a home in this new one?

      Life is full of lessons, and those of the past decade should last us a lifetime.  Here are a few brutal truths and lessons learned, and how they might inform our real estate buying and selling behaviors in the coming years.

Brutal Truth:  Home prices in the south suffer less than in the north

    I am not a demographer, nor do I play one in this newsletter.  But you don’t need a degree in statistics to understand that most people prefer to live out their active days in warmer climates, and that businesses prefer to operate free of unionized employees.  Those desires are best satisfied south of the Mason-Dixon Line, and as the economy recovers –- as at some point it must –- the strong migration north to south will commence anew, and with vigor.
     The simple law of supply and demand governs real estate prices.  The southward migration pattern will create an oversupply in the north, continuing to tamp down prices there, especially ifCliffsatGlassywaterhole more and more businesses relocate south.  Given the overall migration patterns, when prices recover in the north they will lag the recovery in the south (generally speaking).  My readers are exhausted from me making this point but, over time, the gap between prices of comparable properties north and south will widen, eroding buying power for those who hang on waiting for their homes in New England, the mid-Atlantic states and much of the Midwest to rebound.
    Consider also that cost of living rates in most areas of the south are substantially less than in most areas of the north.  For example, a couple considering a move from, say, Boston, to the lovely Aiken, SC, area would save about 31% on cost of living expenses, according to a chart compiled from census research and local Chamber of Commerce data that is published in Where to Retire magazine.  If that couple is spending, for example, $80,000 annually in Boston on housing and typical goods and services, they will save about $25,000 a year by moving to Aiken (count on similar savings in many other parts of the south).  If the couple owns a home in Boston worth $600,000, it would have to appreciate 4% annually to match the cost of living savings.

Lessons:  Of course, those without much equity in their homes are hard pressed to relocate.  But fear is governing the selling and buying choices of those millions of couples who bought their homes in the late 1990s, saw appreciations considerably greater than the losses of the last four years, and have enough equity to realize their dreams of a home on a golf course or wherever they desire.  For those waiting for prices up north to snap back in order to purchase a home in the south –- which is likely to appreciate faster -– the wait could be forever.

Brutal Truth:  Golf communities don't lie, but they don't tell all either

    Virtually every article you will read online or in magazines about individual golf communities is a promotion, paid for by the community’s developers or owners.  This does not mean that what is written is inaccurate, but don’t count on hearing about comparatively high fees, or the problems they had maintaining their greens last year, or how the homeowner’s association has cut back on landscaping.  This reality of the marketplace is why I founded Home On The Course LLC, five years ago; to provide objective, unbiased information about golf communities.
    Always consider the source, and assume nothing.  For example, when Resort Living MtVintageHomemagazine wrote a few years ago that The Cliffs communities provided “the most comprehensive club membership” program, that may have been factually correct but it was offered as an objective opinion by a magazine that appeared to be editorial in nature.  Ever the skeptic, I dug deeper and found that The Cliffs own marketing firm at the time was the publisher of Resort Living, a clever (and expensive) bit of marketing, but a deception nevertheless.  
    Where to Retire magazine, which you can find on the magazine racks in bookstores, appears to be a helpful source of information about retirement communities.  Some of its information, especially its cost of living chart, does provide data you can use, but most of Where to Retire’s articles -– all written with a positive gloss -- are about communities that just happen to advertise in the magazine.
     Most home shoppers these days are using online resources to search for homes or to gather information.  I often use them myself for specific information about golf communities.  Some, such as GolfCourseHome.net, are extremely helpful in providing price ranges for properties, names of the golf course designers, and other details about the many communities the site promotes.  They are paid an annual fee for this, and therefore they will never bite the hands that feed them.  All the communities they promote sound like paradise.  Although I am envious about their stream of income, unbiased information about communities, warts and all, is more helpful to those about to plow much of their net worth into a home. 

Lessons:  You have very few objective allies in searching for a golf community home.  Most developer’s agents are trustworthy, but never forget they work for the developer, not you as a purchaser.  And the tougher the times, the harder the agent is going to work to sell you something.  A good buyer’s real estate agent ultimately may be your best friend in the process.  (Note:  I have developed an excellent network of professional and trustworthy agents in the southern U.S.; and where I don’t, I interview aggressively to make sure they are experienced and qualified).  A good agent will care that you buy something, but she/he won’t care where you buy, as long as it suits your needs.  As for the online sites that promote golf communities, use them to gather data. Then call me for comparative information.

Brutal Truth:  License to sell doesn’t make an agent a professional

    In the first part of last decade, with the housing market booming, a flood of people joined the real estate industry.  A real estate license seemed like a license to print money for those struggling in less than inspiring jobs.  Why work at the local Jiffy Lube or McDonalds when, for just $400 for a real estate licensing class, a few hours of studying and class attendance, and a couple hundred dollars more for the license, you could list your mother’s house, your friend’s house, their friends’ houses and a few others and make out just fine.  Trust me, with a little bit of study and near-perfect attendance at classes, virtually anyone can pass the real estate exam; I did on my first try, so how tough can it be?  
    The real estate industry was inundated in the late ‘90s and into the 2000s with inexperienced agents who were short on relationship building and long on shortcuts to sales.  One favorite tactic was to convince a seller his home was worth less than it actually was in order to produce a quick sale.  The opposite tactic was to inflate the ego of the homeowner with an inflated value just to secure the listing.  Many of those houses languished as more realistically priced homes in the neighborhood sold.
    Experienced agents shared their anger with me as they saw their profession’s reputation erode because of the interlopers.  Many agents unhappy with their brokers for signing up the newbies went out and earned their own broker’s licenses and opened up their own firms.
    Today, of course, as the realities of the market put a premium on street smarts and professional experience, many of the arrivistes of the early 2000s have returned to the general population.  "The part time or unmotivated agents have all left the building," writes The Real Estate Bloggers.com web site.  Maybe not all; I read a number of real estate blogs, and it is clear not all the naifs have left the building.  Overwhelmingly, most real estate agents are professionals, but beware some of the hangers on.

Lessons:   Interview at least three experienced real estate agents before you choose one to list your home or to represent you as a “buyer’s agent.”  On the buyer’s side, make sure the agent you choose has experience with properties in the local planned communities.  (Note:  I can help you identify the best agents in most areas of the southern U.S.).  If you are listing your home, ask for each agent you interview to provide you the price at which they would list, and then hire the agent whose estimate falls in the middle.  (That estimate protects you from an agent trying for a quick scale with a lowball figure or another trying to impress you with how much your home is worth by suggesting a higher than market figure.)  And if you decide to do a favor for your friend or neighbor whose kid just got his real estate license, be prepared to subsidize his learning experience with your own lost time and money.

Coming in February:  More brutal truths and lessons learned...
 

   Read my Blog      This email address is being protected from spambots. You need JavaScript enabled to view it.
 

Your Subscription:
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© 2010 Golf Community Reviews
 
    January 2010 

Reader Feedback

        We want to make this newsletter as  useful as possible for you.  If you have comments, critiques, sugges- tions or observations about the newsletter, please email them to me at This email address is being protected from spambots. You need JavaScript enabled to view it..  I promise to respond quickly.  Thanks.  --  Larry

If we are not your type

        Some of our readers indicate the typesize of the newsletter is a little small for easy readability.  That is easily fixed on both PCs and Macs.  On Macs, hold down the Command key and tap the Shift and + keys simultaneously to increase the type size.  In Microsoft Outlook on the PC, hold down the CTRL key while scrolling down with your mouse.          Hope this helps.

Short and Sweet

        We invited golf communities we have visited and recommend to submit Twitter-like statements about their unique character.  Twitter, of course, puts a limit of 140 characters on its messages (spaces count), forcing inspiration as well as conciseness.  Below is what we received; if you would like more informaton on any of them, contact This email address is being protected from spambots. You need JavaScript enabled to view it..

"6 Championship Golf Courses, 34 Tennis Courts, 2 Deep Water Marinas, and Historic Savannah just minutes from our gates on Skidaway Island." -- The Landings, Savannah, GA

"The Coastal South’s fastest growing community with $40 million in ’09 sales and a brand new Tim Cate golf course. -- Brunswick Forest, Leland, NC

Tom Fazio & Rees Jones 18 Hole Championship Courses. Island Town in heart of City. Awarded tops in Planned Communities. -- Daniel Island, SC

Owl's Nest turns back time. ‘80s pricing for land/construction, low interest rates, huge savings if you have courage to lock-in savings now. -- Owl's Nest, Campton, NH

An oceanfront community in harmony w/ nature, offers suburb amenities & an unbeatable lifestyle w/ golf, tennis, dining, spa, shops & more. -- Amelia Island Plantation, FL

 

Recent comments from the trenches of the housing market

“Compared to a year ago, there are now 15% fewer homes on the market,” according to real estate agency Keller Williams, adding that the end-of-November inventory of 6.5% was close to the 6% that is considered “balanced.”

House inventory in the Lake Norman, NC area dropped from about 25% in Q4 ’08 to 17% in Q4 ‘09, wrote Diane Aurit who publishes the “Best Real Estate Lake Norman” blog.  Ms. Aurit added that, “Homes priced at or above $900,000 represented 7.6% of our sales while they make up 27% of our inventory.”

“Construction levels will stay low and my best guess is that housing prices — the 20 city Case-Shiller average — will be within 5% of current level, one side or the other.”  -- Howard Glaeser, Harvard University in the Wall Street Journal.

“…things are pretty positive. That’s not just spin. Things are getting better.”  -- Nick Sabatine, head of the Greater Greenville (SC) Association of Realtors on a sharp November increase of homes sold in Greenville.  South Carolina unemployment figures stand at 12.3%, highest in the nation.

“…you can’t just slice off your bathroom and sell it on the market” if you find yourself in need of cash  -- Karen Pence, Federal Reserve real estate economist, at the American Economic Association Meeting, making the point that housing is a lousy investment.

 

Forewarned, forearmed

Lessons learned from a wild decade in the housing market


     We learn from our mistakes more than we do from our successes.  If that old axiom is true, those of us considering the purchase of a home in a golf community, or any real estate for that matter, are both older and wiser than we were a decade ago.

     Certainly those who rushed to catch the buying wave in the early part of the decade might have pondered a little longer the laws of gravity as they applied to home prices.  With prices now having retreated to early 2000s levels, is now time to spring for that home in a golf community, assuming you have some equity?  And what does the last decade teach us about searching for a home in this new one?

      Life is full of lessons, and those of the past decade should last us a lifetime.  Here are a few brutal truths and lessons learned, and how they might inform our real estate buying and selling behaviors in the coming years.

Brutal Truth:  Home prices in the south suffer less than in the north

    I am not a demographer, nor do I play one in this newsletter.  But you don’t need a degree in statistics to understand that most people prefer to live out their active days in warmer climates, and that businesses prefer to operate free of unionized employees.  Those desires are best satisfied south of the Mason-Dixon Line, and as the economy recovers –- as at some point it must –- the strong migration north to south will commence anew, and with vigor.
     The simple law of supply and demand governs real estate prices.  The southward migration pattern will create an oversupply in the north, continuing to tamp down prices there, especially ifCliffsatGlassywaterhole more and more businesses relocate south.  Given the overall migration patterns, when prices recover in the north they will lag the recovery in the south (generally speaking).  My readers are exhausted from me making this point but, over time, the gap between prices of comparable properties north and south will widen, eroding buying power for those who hang on waiting for their homes in New England, the mid-Atlantic states and much of the Midwest to rebound.
    Consider also that cost of living rates in most areas of the south are substantially less than in most areas of the north.  For example, a couple considering a move from, say, Boston, to the lovely Aiken, SC, area would save about 31% on cost of living expenses, according to a chart compiled from census research and local Chamber of Commerce data that is published in Where to Retire magazine.  If that couple is spending, for example, $80,000 annually in Boston on housing and typical goods and services, they will save about $25,000 a year by moving to Aiken (count on similar savings in many other parts of the south).  If the couple owns a home in Boston worth $600,000, it would have to appreciate 4% annually to match the cost of living savings.

Lessons:  Of course, those without much equity in their homes are hard pressed to relocate.  But fear is governing the selling and buying choices of those millions of couples who bought their homes in the late 1990s, saw appreciations considerably greater than the losses of the last four years, and have enough equity to realize their dreams of a home on a golf course or wherever they desire.  For those waiting for prices up north to snap back in order to purchase a home in the south –- which is likely to appreciate faster -– the wait could be forever.

Brutal Truth:  Golf communities don't lie, but they don't tell all either

    Virtually every article you will read online or in magazines about individual golf communities is a promotion, paid for by the community’s developers or owners.  This does not mean that what is written is inaccurate, but don’t count on hearing about comparatively high fees, or the problems they had maintaining their greens last year, or how the homeowner’s association has cut back on landscaping.  This reality of the marketplace is why I founded Home On The Course LLC, five years ago; to provide objective, unbiased information about golf communities.
    Always consider the source, and assume nothing.  For example, when Resort Living MtVintageHomemagazine wrote a few years ago that The Cliffs communities provided “the most comprehensive club membership” program, that may have been factually correct but it was offered as an objective opinion by a magazine that appeared to be editorial in nature.  Ever the skeptic, I dug deeper and found that The Cliffs own marketing firm at the time was the publisher of Resort Living, a clever (and expensive) bit of marketing, but a deception nevertheless.  
    Where to Retire magazine, which you can find on the magazine racks in bookstores, appears to be a helpful source of information about retirement communities.  Some of its information, especially its cost of living chart, does provide data you can use, but most of Where to Retire’s articles -– all written with a positive gloss -- are about communities that just happen to advertise in the magazine.
     Most home shoppers these days are using online resources to search for homes or to gather information.  I often use them myself for specific information about golf communities.  Some, such as GolfCourseHome.net, are extremely helpful in providing price ranges for properties, names of the golf course designers, and other details about the many communities the site promotes.  They are paid an annual fee for this, and therefore they will never bite the hands that feed them.  All the communities they promote sound like paradise.  Although I am envious about their stream of income, unbiased information about communities, warts and all, is more helpful to those about to plow much of their net worth into a home. 

Lessons:  You have very few objective allies in searching for a golf community home.  Most developer’s agents are trustworthy, but never forget they work for the developer, not you as a purchaser.  And the tougher the times, the harder the agent is going to work to sell you something.  A good buyer’s real estate agent ultimately may be your best friend in the process.  (Note:  I have developed an excellent network of professional and trustworthy agents in the southern U.S.; and where I don’t, I interview aggressively to make sure they are experienced and qualified).  A good agent will care that you buy something, but she/he won’t care where you buy, as long as it suits your needs.  As for the online sites that promote golf communities, use them to gather data. Then call me for comparative information.

Brutal Truth:  License to sell doesn’t make an agent a professional

    In the first part of last decade, with the housing market booming, a flood of people joined the real estate industry.  A real estate license seemed like a license to print money for those struggling in less than inspiring jobs.  Why work at the local Jiffy Lube or McDonalds when, for just $400 for a real estate licensing class, a few hours of studying and class attendance, and a couple hundred dollars more for the license, you could list your mother’s house, your friend’s house, their friends’ houses and a few others and make out just fine.  Trust me, with a little bit of study and near-perfect attendance at classes, virtually anyone can pass the real estate exam; I did on my first try, so how tough can it be?  
    The real estate industry was inundated in the late ‘90s and into the 2000s with inexperienced agents who were short on relationship building and long on shortcuts to sales.  One favorite tactic was to convince a seller his home was worth less than it actually was in order to produce a quick sale.  The opposite tactic was to inflate the ego of the homeowner with an inflated value just to secure the listing.  Many of those houses languished as more realistically priced homes in the neighborhood sold.
    Experienced agents shared their anger with me as they saw their profession’s reputation erode because of the interlopers.  Many agents unhappy with their brokers for signing up the newbies went out and earned their own broker’s licenses and opened up their own firms.
    Today, of course, as the realities of the market put a premium on street smarts and professional experience, many of the arrivistes of the early 2000s have returned to the general population.  "The part time or unmotivated agents have all left the building," writes The Real Estate Bloggers.com web site.  Maybe not all; I read a number of real estate blogs, and it is clear not all the naifs have left the building.  Overwhelmingly, most real estate agents are professionals, but beware some of the hangers on.

Lessons:   Interview at least three experienced real estate agents before you choose one to list your home or to represent you as a “buyer’s agent.”  On the buyer’s side, make sure the agent you choose has experience with properties in the local planned communities.  (Note:  I can help you identify the best agents in most areas of the southern U.S.).  If you are listing your home, ask for each agent you interview to provide you the price at which they would list, and then hire the agent whose estimate falls in the middle.  (That estimate protects you from an agent trying for a quick scale with a lowball figure or another trying to impress you with how much your home is worth by suggesting a higher than market figure.)  And if you decide to do a favor for your friend or neighbor whose kid just got his real estate license, be prepared to subsidize his learning experience with your own lost time and money.

Coming in February:  More brutal truths and lessons learned...
 

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