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Golf Homes Attract Even Those Who Don't Play
05.08.2005
By Robert Johnson
New York Times - "National Perspectives"
In the game of golf, a triple bogey - three strokes over par on one hole - is bad news.
The market for homes in communities located on golf courses would seem imperiled by an economic triple bogey of sorts right now: golf equipment sales are dwindling, the number of new golfers is flatter than a Texas fairway and golf courses are going out of business in the United States at about double the rate of a decade ago, 63 last year.
None of that matters to Dr. Paul Capito, a radiologist who recently bought a 4,500-square-foot home on the golf course at Uwharrie Point in rural North Carolina about 50 miles west of Pinehurst. Dr. Capito doesn't even play golf. "Never in my life," he said.
"I have five children, ages 3 to 10, and I was drawn to the Uwharrie Point development because of the many amenities there besides golf: a beautiful lake, nature trails and excellent security," he said. "It's gated and you have to talk to a real person to get in." There are also classes in art and gardening, and a guided trip to an area museum that he hopes will interest his children. "The fact that it's a golf community is just part of the overall ambience; it's a lovely, quiet and safe place." He said houses there range from $650,000 to $1.8 million.
Nongolfers like Dr. Capito are perhaps the major reason that the waning popularity of the links doesn't daunt the developers of golf-oriented subdivisions. In fact, the strategy of building golf courses as part of housing developments is a more popular play than ever.
Of the expected 150 new golf courses being built around the country this year, about 60 percent will be part of residential developments, according to the National Golf Foundation, a research group in Jupiter, Fla. In the 1990's, only about 30 percent of new courses were surrounded by homes. Only about one-fifth of the nation's 15,000 total golf facilities are in communities. Most of the rest are at individual country clubs or part of public park systems.
So what's behind the optimism of golf community builders? They're discovering increasingly strong demand for housing in such subdivisions from nongolfers.
"Even though the popularity of golf isn't rising the way it once was, the premiums on golf development homes over comparable housing nearby that isn't on a course is now 30 percent to 40 percent in some areas," two or three times the typical markup in the 90's, said Jeff Woolson, managing director of CB Richard Ellis Golf Operations, a consulting firm in Carlsbad, Calif.
One strategy of the developers who are building more golf community homes is that many are quietly cutting construction costs. The typical course and clubhouse in a community in the mid-90's cost $5 million to $10 million, said Tom Clark, a course designer in Kensington, Md. But lately the typical amount invested by developers is $2.5 million to $4 million, he said.
One caveat presented by a bargain-priced golf course is that the surrounding community won't have the marketing power that comes from having a facility branded with the name of a famous professional player like Jack Nicklaus or Arnold Palmer.
Will cheaper golf courses affect the appreciation of home values in the community? Mr. Clark says no, because it won't matter to the nongolfers who have become the main buyers in these developments. Still, real estate agents say that all golf community shoppers should check into the quality of the course's construction and the developer's plans for maintaining it.
Nongolfers are attracted to golf communities for reasons having to do with lifestyle, said Lewis Goodkin, a real estate researcher and consultant in Miami. "We know that many people who buy homes on the ocean rarely, if ever, go swimming in the surf or own boats," he said. "That isn't the point, and golf often isn't what lures them to golf communities."
Instead, the big draws include green space and peace and quiet. "The golf course out back of your house can seem like an extension of your lot. It's a gardenlike atmosphere," Mr. Goodkin said.
The golf courses themselves are usually owned by the developer, with memberships available to people who live there but not required. Memberships are also sold to outsiders.
So attractive are the nongolf attributes of some of these developments that they thrive through the worst imaginable calamity: the golf course closes for lack of business. That happened in 2002 in the Bink's Forest community of West Palm Beach, Fla., where Larry Olevitch is among the 550 homeowners. "The golf course folded, but our houses kept selling as fast as people would put them on the market," said Mr. Olevitch, a television marketing manager who paid $365,000 for his 3,500-square-foot house near the 17th tee in 1999. Similar houses in the Bink's Forest area are now selling for more than $600,000.
There are various selling points of Mr. Olevitch's erstwhile golf course home, he said: one is that it is gated, and another is that it's "a neighborhood of upscale homes and the golf course, while abandoned, has continued to be an amenity - it's still quiet, green space." It is also, he said, in a desirable public school district.
The fact that the golf course was recently bought by a new owner with plans to refurbish it doesn't seem essential to Mr. Olevitch. "I think that will be a good thing, but it hasn't been a disaster that the golf course closed," he said.
Some home buyers, in fact, find that life at the edge of a thriving golf course has drawbacks. "You get the balls bouncing into your yard and banging into the house," said Mr. Goodkin, the consultant. "Gardeners are always mowing and blowing to keep the course immaculate. And you keep hearing the players' expletives."
He lived on a golf course in Palm Springs, Calif., for several years but sold that house in the mid-90's. "I just got tired of living with golf," said Mr. Goodkin, who still describes himself as "a golf devotee."
But many home buyers in golf developments are willing to tolerate the golf course in order to be part of such a community's overall lifestyle. "Golf is part of a package of amenities they're seeking; the main thing about the golf for some buyers is the prestige factor," Mr. Clark said. "People don't go around saying, 'I live in a place that has a great bingo night.' Even if they don't play golf, they like to say, 'I live in a golf course home.' "
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