Bargains Get Pricier

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

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

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

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

What constitutes a “bargain”?

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

Getting What You Pay For

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

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

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

Sneak Preview –
An excerpt from my forthcoming book

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

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

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

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

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

Larry Gavrich
Founder & Editor
Home On The Course, LLC

The South — and Home Prices There — Rise Again 

Some pandemic behaviors will raise prices in Southeast golf communities over the next few months and years.  Some of those behaviors will be the natural results of forced changes in behavior, and others will be, well, to put it gently, based on unproven beliefs.

Many people believe, for example, that hot weather eliminates virus transmission.  That is essentially a wives’ tale.  No scientific evidence shows a connection between heat and the evaporation of airborne droplets carrying the virus. (Source: World Health Organization “mythbusters”)  Indeed, countries with warm-weather climates, like Australia and Iran, have seen escalating numbers of Covid-19 victims the last three months.  But many otherwise reasonable folks will continue to believe that living in a hot climate will increase their chances against coronavirus.  Under normal circumstances, no one but an alligator would want to bear the heat of a Florida summer, but for those who cling to the belief that heat kills germs, the Sunshine State could be the place for them.  Add those reasons to all the people who migrate south because they prefer warm winters to cold, and you have the ingredients for upward pressure on house prices.

More rooted in logic and experience, urban dwellers are leaving their houses for vacation homes they own or those they are able to rent in less population-dense locations.  Some will return to their cities when they perceive it is safe.  Others who are inclined and financially able to will pick up and move to the Southeast.  Many of them will trod the same paths as prior northerners and, in some cases, their parents who retired to Florida and other warm weather destinations.

Tom Jackson, our real estate professional in the Bluffton/Hilton Head, SC, area, believes this is happening in the area he covers.

“We are seeing folks from the North coming in [to Bluffton and Hilton Head],” Tom told me, “and we feel…with the virus, they are ready to get away from cities.”

According to the Hilton Head area Multiple Listing Service, which includes Bluffton and surrounding areas, pending sales contracts between March 30 and April 26 jumped from 54 to 95, the largest single one-month increase of the year and the largest since the third quarter of 2019.

The Myrtle Beach area has seen a slightly different experience with pending sales contracts the last two months, although the overall market is healthy.

“The market was good when the virus started,” said our real estate professional Cathy Bergeron, who covers the Pawleys Island area south of Myrtle Beach, “so we have not really seen a drop in closings, but pending sales have dropped due to the buyers not being able to come in March and April.  

“There will probably be a drop of sales for May, but we should be starting back in an upward turn for June.”  South Carolina is one of the states that opened beaches, restaurants and other “non-essential” businesses in May.

Cathy added one other observation that could very well turn out to be the most compelling driver of sales traffic in the Southeast for the next few years.

“Many people who could not move before,” she said, “may now have the option to live somewhere other than near their employer — and work from home.”

The large population of employees working from home during the pandemic may have a strong and lasting effect on migration from cities to less densely populated areas, and from North to South.  Businesses are getting used to many of their employees working from home.  Imagine, if you will, that you live and work in a city or a populated suburban area of the North, that your business owners are fine with you continuing to do so and that you are concerned your local living conditions might continue to foster breeding grounds for the current virus, and future ones.  Your current cost of living is well above the national average, and you know you will spend less on annual expenses — in some cases, much less — by moving South.

Mitigating circumstances for many, of course, will make them hesitate, among them their current proximity to family and friends and concerns that, if they have children, the schools in many places in the South will not be the equal of those in their areas.  (Check the state-by-state rankings here to see what I mean.) But most near-retirees, those in their 50s and older, will not be worried about their kids’ educations, their children having flown the nest some years earlier.  What a benefit it would be if you can spend the last few years of your career working from home in a warm weather (year-round) climate — catching nine holes most days of the week after work — in a house that costs you half of what your home in the North might sell for, and at a cost of living 30% of what you have been paying for the last 30 years or so.  You don’t need a financial advisor to figure out the positive lifestyle consequences of such a move.

Global Workplace Analytics, an online service, estimates that 75 million people, or 56% of the total US workforce, have the kinds of job responsibilities that would support work from home.  In another telling statistic, GWA estimates that office workers spend 50% to 60% of their work time away from their desks. “Work-at-home,” a Global Workplace analysis indicates, “will save U.S. employers over $30 billion a day in what would have otherwise been lost productivity during office closures due to COVID-19.”  Does anyone think that when the pandemic is over, all of those business are going to ask their workers to, “Come back to the office and help us lose billions in productivity tomorrow”?

Sellers of golf community homes in the Southeast, and the real estate professionals who list their homes, must be salivating over the possibilities of more intense migration to their areas.  The 2008 recession and negative news reports about the eroding popularity of golf scared most developers from opening new golf communities in the last dozen years.  People in the socioeconomic group that purchases golf homes are living longer and, therefore, staying in their homes longer.

Those factors have conspired to create an inventory shortage of homes in the most popular golf-oriented areas.  In the Asheville, NC, area, the inventory of homes for sale is down by 25% year over year, to a supply of just 3.3 months.  Six months is considered “balanced” by the real estate industry.  In the Pawleys Island/Litchfield area south of Myrtle Beach, the supply of homes for sale was down 22% in April; in the overall Myrtle Beach area, the supply of homes at the end of April was less than five months.  

The short supply of homes with demand that has remained steady has kept prices level or even up a bit in high-quality golf communities.  In Myrtle Beach so far this year, prices are up 3.6% compared with the first third of last year.   In the Pawleys Island area, median prices are up over 6% during the same period. Up in the mountains in the Asheville area, median sales prices this year are up 6.7%; and in nearby Henderson County, home to a number of deluxe golf communities, median prices are up more than 11% year over year.

Consider what happens when the pent-up demand from newly retired couples who put their searches on hold during Covid-19, and the added migration south from those who will be working from home and folks scared to continue to live in their cities meets these inventory shortages.  Price increases of 10% and more per year could very well be the norm for the next few years.

Since some of you reading this are residents of a golf community already, my advice is to resist the temptation to get top price for your house, stay put if you are happy with your home, your surrounding community and with all the other factors that roll up into a happy and healthy lifestyle.  If you aren’t happy, these next few months would be a good time to consider selling and moving someplace you think will make you happier.  Just be mindful that the price you pay for your next house may be just like yours; that is, higher than it was the year before.  Two can play the game.

For those contemplating a move South from an urban or suburban area, and who expect to work from home, I have two words for you (well, three actually) — fiber optics and cable.  Golf communities built over the last 10 years most likely laid either fiber optic or high-speed cable lines throughout. If your work communications will depend on speed and reliability, make sure that any place you live can support that.  (Fiber optic transmissions are estimated at 20 times faster than standard cable transmissions. See the accompanying sidebar.) 

In the meantime, I would be pleased to help anyone who wants to get a move on to define and execute a search for a golf home.  Contact me at This email address is being protected from spambots. You need JavaScript enabled to view it.). There is no fee or obligation for my assistance.

Larry Gavrich
Founder & Editor
Home On The Course, LLC

Lots for a Little: 
$1 Homesites are Back

Here we go again.  Another national crisis, another economic disaster and another reeling real estate market, although this one may have a positive wrinkle or two for certain categories of purchasers.

If you are reading this, you have seen this movie before, beginning in 2008 and the fall of Lehman Brothers, with the resulting havoc in the real estate market.  Back then it was subprime mortgages; today, it is a deadly virus and massive unemployment — neither a recipe for eager buyers to stroll through someone else’s home.  And yet, some real estate professionals I work with say they are seeing clients, and many of those are buying.  This shows just how resolute many retirees are about fulfilling their dreams of an active, engaged retirement involving golf.

Back when the recession hit in 2008, many nearly retired couples panicked, selling their already depressed equities at significant losses and putting their money in more conservative instruments yielding not much more than 1% annually.  By the time the stock market roared back, their lack of an investment yield of more than 1% killed their buying power as golf community properties appreciated as much as 8% annually since 2011.  

Yet some nearly retired folks, whether shocked into complacency or out of an innate financial sense, kept their stock portfolios more or less intact through the recession and then watched them return to their former levels, and then some.  Those who did so were able to score some nice retirement homes in the 2012 through 2019 timeframe.  Those who pretty much survived the recent drop in the stock market are positioned well because many property owners in high-quality golf communities find themselves cash strapped and eager to sell.  That, and the other factors of our economic depression (e.g. 30% unemployment), are driving down prices again…some to absurdly low levels.

Bargains Then, Bargains Now

In no market is that truer than Bluffton, SC, home to the deluxe golf communities of Colleton River, Belfair and Berkeley Hall, each with 36 holes of excellent and superbly conditioned golf courses and filled with active residents.  These communities, however, are part of a dying breed in that all residents have been required traditionally to become full golf members of their respective clubs. Initiation fees for this quality of golf are relatively reasonable at around $20,000, but annual carrying costs that include club dues and homeowner association fees run to about $20,000.  That obligation is applied per property; any resident or outside speculator who buys a lot is on the hook for the initiation fee and annual costs…

…which is why 10 lots in these communities are currently priced at $1 each; faced with a market for homesites that has virtually disappeared, these speculators are faced with a double whammy — currently worthless lots with an ongoing financial commitment.  Do not misinterpret worthless as flawed or ugly; these properties, on the contrary, are nicely sized and feature some excellent views.  At their peak, some sold for as much as $400,000…like this one, currently for sale for a buck:

“This home site affords golf views of the 14th green and 15th tee. Private location off a quiet cul-de-sac. At .43 acres this home site is 175 feet deep and 135 feet across the golf course view.”

Mindful that the nation’s economic history has repeated itself with the current pandemic and market chaos, the Bluffton communities are beginning to offer less costly social memberships, as well as non-resident memberships.

“On $1 lots,” says my Bluffton/Hilton Head real estate professional Tom Jackson, “I think they are here for a while until communities create a social membership with $7500 [annual] dues.”  Some of the communities, Tom told me, have also begun to offer memberships to non-residents and those who live beyond 75 miles of the communities to take the pressure off the need for mandatory full-golf memberships.

The $1 lots look like a bargain, obviously, but current construction costs in the Bluffton/Hilton Head are significant, starting at $250 per square foot and amounting to $750,000 plus $1 for a 3,000 square foot home.  That may be the right number for a couple that has dreamed of their own home design, but there are viable alternatives in the resale market.

“[It costs] much less to buy a home already done, for sure,” Tom said.  I noted one listing of a home facing the Nicklaus golf course at Colleton River with 3,000 square feet, four bedrooms and four baths, on more than ¾ of an acre, priced at $586,900.  It was one of many such homes in that price range in the deluxe golf communities of Bluffton.

Bargains by the Lake

For those on a tighter budget, a community like Savannah Lakes Village in McCormick, SC, is obviously appealing.  One home I noted online is priced at just under $400,000 for three bedrooms, three baths and over 3,100 square feet located on Lake Thurmond.  For those interested in building at Savannah Lakes, they will find lots priced generally in the $20,000 category and construction costs at their highest at $140 per square foot.  That means a 3,000 square foot brand-new home would top out at $420,000.  Note that Savannah Lakes’ current developer is offering packages substantially lower than that because of an arrangement with the county on releasing undeveloped lots.

“I’m having my best year in quite a while,” says Michael Sherard, my on-site real estate contact. “I bet we had close to 70 new starts last year and sold about 90 resale homes. Our house inventory is down to around 55 homes which is the lowest it has been in 20 years.”

Michael has a notion of why Savannah Lakes is bucking the trend.

“We think the virus is causing people to get out of metropolitan areas, and [with the money] our company is spending on marketing, we are going to see a surge [of sales] we have not seen since before the 07–08 recession,” he told me.

Note that golf membership at Savannah Lakes comes with the modest $100 per month homeowner association fees.  Members can opt to pay as they play (modest green fees about $40) or join the club on an annual basis if they play a couple or three times a week and cut those per-play fees about in half.

None of us can be sure of how the pandemic will evolve and what its effects, short- and long-term, will be on the market for golf community homes and property.  There is little doubt that, so far this spring, traffic by potential buyers to golf communities is down but that could very well be camouflaging pent-up demand. 

“We are still selling,” said Tom Jackson in Bluffton, “but have had fewer visits this spring.  The big effect will be June, July and August when we have a lot of closings normally from spring.  We are hoping that folks that come in spring will come [back] this summer.”

Most of those folks are 60 and older, in the prime risk categories for Covid-19.  If they do come back this summer, that could say as much about the status of the pandemic as it does about the inherent strength of the real estate market for retirees.  Here’s hoping Tom and other golf community professionals get their wish.

Covid-19 and Me

I feel a bit guilty thinking about myself while so many people are suffering or have died from Covid-19.  But when this crisis is over, most of us will have survived, life will go on but in ways we can’t help pondering.  And so I ponder.

Many of us have had plenty of time to think these past few months.  If there is one thing the current crisis has taught me, it is that living a hermit’s life is underrated.  I self-imposed a quarantine on myself in early March after reading, and taking seriously, the Center for Disease Control’s list of high-risk factors related to Covid-19.  Since I checked the box for most of them, I felt mortal immediately.  Diabetes?  Check.  Heart condition? Check. (I had bypass surgery in 2017.) Over the age of 60?  Double check: I turned 72 in late April.

Readin’, Writin’…and Paranoia

Isolation has been productive for me over the last nine weeks.  I have watched a lot of decent movies I wouldn’t have seen for years, or ever, and binge-watched a few crime dramas; increased my book reading to eclectic levels (Woody Allen memoir and a history of the Battle of Culloden, which secured the United Kingdom’s domination over Scotland); and, most exhilarating, organized the research, observations and essays I have written about golf communities into the first draft of a book, which I hope to publish later in the summer.  On balance, sequestering has been good for me…

…except for one thing:  I am constantly at war with paranoia.  I have ventured out of the house just six times in the two months, not because I felt stir crazy but because my wife Connie thought it was a good idea for me.  (As the more responsible and careful half of our couple, she has been doing all the grocery shopping; but when she returns, I tend to steer clear until well after she has removed the gloves and mask and washed up.)  The first time out of the house, we took a 1½ mile walk in our neighborhood in Connecticut on a nice early-spring day; the locals we passed seemed especially cheerful, probably happy to emerge from their own isolation and encounter other humanoids.  It felt good to walk, and no paranoia ensued.  

The second time was to take a car ride with the dog; I suddenly had a craving for a cheap burger, and we wound up at a Burger King drive-thru behind a dozen others with the same idea.  I was nervous about a window server handing me a bag that she — and who knows how many others? — had handled, but I was slightly reassured when her gloved hands delivered the bag on a tray, which I didn’t have to touch.  But a few seconds after, I considered if she changed her gloves after each handling of a bag? The virus, I had read, can live on plastic and paper for a day or more.  What about the wrappers on the burgers, and the little box holding the French fries?  I grabbed for the hand sanitizer in the door handle and rubbed it on my hands — and on the bag and steering wheel.

No Scone Unturned

My third outside exposure was also food related.  One of the many things on my pre-Covid bucket list was to bake respectable scones, those British triangles that, when done right, capture the dual revelations of crunchy and crumbly in one bite.  The only place on earth I have ever tasted what I would describe as a perfect scone was in a small café in Edinburgh, Scotland.  It was nearly a religious experience and one that the coffee shops and bakeries of Connecticut have not come close to in the years since that initial revelation.

From my home oven and an online recipe, I produced a credible bacon and cheddar cheese scone — “credible” is a level or two below respectable, and mine had a good crunch but a crumble that was on the cakey-dry side.  I made enough to produce a dozen scones, and I wanted to share the extras with our favorite food buddies for their opinions.  I bagged a few, drove the 1½ miles to their house, and then shoved them into our friends’ mailbox on top of the letters the postman had delivered.  On the way back home, I passed the couple taking a walk in their neighborhood.  I rolled down the window and, from a safe distance, asked them to go check their mail.  To which they replied, “We are only doing that occasionally.”

I thought, “That’s odd,” but after a few seconds it occurred to me:  There is that little latch to pull open the mailbox, and I had touched it with an ungloved hand.  And I had not immediately applied the hand sanitizer I keep in the car door handle’s recess.  Had I touched my face shortly after?  Obviously, my hands were all over the steering wheel.  I worried about it all the way home and after I got there, even as I washed my hands in warm water for more than the prescribed 20 seconds.  

Fourteen days later, I was still Covid-symptom free, but I kept thinking about the steering wheel I touched, and how long germs might last on hard rubber.

In any case, my friends wrote back the next morning. “OMG, these are great!” they texted me about the scones.  “Larry David would even love these,” they added, a reference to the irascible star of Curb Your Enthusiasm who, in one episode of Season 10, punished a café owner in LA for the “muffins” he advertised as scones.  (In the episode, David opens a “spite store” next to the offending café owners’ shop and tries to put him out of business. His own scones turn out to be dry enough to choke at least one customer.)

I was uplifted by my favorite couple’s comments, but then started thinking, “What if they are just trying to be nice?”  On reflection, it is hard to believe there is a better definition of paranoia than doubting the sincerity of friends.  And it is a signal to me that if, as experts predict, Covid-19 will be lurking for another one or two years, until a vaccine is ready, that paranoia will indeed strike deep…and change the nature of some of our relationships.  

Although I am more than ready to play golf, with all the restrictions that make sense but won’t kill my joy for the game, it may take some time for me to return to polite society. The only good news is that, by the time I am ready to emerge fully from my quarantine cocoon, I could be closer to the perfect scone.

Larry Gavrich
Founder & Editor
Home On The Course, LLC