BUYING A GOLF HOMESITE
By Larry Gavrich, Founder & Editor,
Home On The Course, LLC
On a beautiful day in coastal South Carolina six years ago, standing on the 16th fairway of Jack Nicklaus’ Pawleys Plantation golf course and intoxicated with the oil-painting-perfect views of the marsh at high tide, my wife and I decided to purchase a homesite on which we would build our dream home. We have lived in a half dozen houses together over 30+ years of marriage, and they were all someone else’s conception of a home. The thought of an entire house built to our specifications – every wall, every appliance, every window exactly where we want them - and with a view down a verdant fairway and out to the marsh put us in a dream state from which we eventually awoke. (We still own the site, but we have not decided yet whether we have the stamina to actually build on it.)
For those with more energy and resolve, this may be the opportune time to take the leap of faith and imagination. Here’s why:
PLENTY OF INVENTORY … FOR NOW
As Will Rogers once advised, “Buy land. They ain’t making more of the stuff.” That is true, but there is still an ample supply of land to go around, and much of it is inside the gates of golf communities in the Carolinas. Take a huge multi-location development like The Cliffs Communities in the upland of the Carolinas; their developers have been selling property since the mid-1990s and, literally, have only scratched the surface on less than half their available acreage. Scotch Hall Preserve, on a beautiful piece of land in Merry Hill, NC, beside the Inner Banks and Albemarle Sound, and with a fine Arnold Palmer Design golf course at its heart, still has nice waterfront lots for sale, a bit of a rarity in that those sites with water views are typically the first to sell. And a few are priced under $200,000, also a rarity for waterfront positions.
As long as inventories remain high, prices will remain reasonable. But real estate operates on supply and demand, and with more and more baby boomers moving South, demand is growing and supply should shrink in the next few years. That means prices could be at their lowest right now.
In many golf communities, especially the higher priced ones, club membership is tied to the property, not the individual member. In other words, when you buy a site, you are required to buy a membership. In those cases where club membership is optional but still tied to the property, whoever one day purchases your land or home cannot apply for golf club membership (unless they purchase another property that has a membership attached to it). This was how developers guaranteed a steady flow of dues into their clubs. But that was in the early 2000s when consumers had no inkling of the housing and general economic troubles to come in 2008. Many who bought into golf communities and built a home expected the neighboring properties to continue to increase in price; they opted to purchase extra homesites on speculation, thinking they would flip them at a tidy profit within a year or two. The trouble was that those homesites were attached to golf memberships with annual obligations as high as $15,000; and when the economy and leisure residential market crashed and folks stopped their discretionary spending (e.g. golf club dues), the speculators could not sell their land at any price.
During the recession, some sites at Colleton River, a high-end community in Bluffton, SC, with 45 holes of Nicklaus and Dye golf and mandatory club membership for all, were selling for about 1/10th of their original price. I worked with a customer who purchased a $45,000 site at Berkeley Hall, another high-end sister community close to Colleton River; my customer bought the home site from the original purchaser who had paid $450,000. That original owner, like so many investors in the early and mid-2000s, thought the price appreciations would go on for years. The recession hit, folks stopped buying leisure residential properties, and the lot owner was stuck with the obligation of about $15,000 a year in fees and dues for a club he was already using and paying for. (He owned a home he had built in Colleton River.) A recent scan of home site listings in Colleton River showed eight priced at $10,000 or less, including five for just $1.
Out on the beautiful and automobile-free Daufuskie Island, SC, reached by the community’s own ferry, a few sites in the community of Haig Point were recently selling for $1 in order that their owners could get out from under the financial obligations of club ownership. Homesites at Haig Point are reasonably priced normally, as the cost to build there is a bit higher than on the mainland (all materials and labor must be shipped in by ferry). And the maintenance of the ferry itself adds an extra component to homeowner association fees, making some potential buyers nervous about the total carrying costs. But property on the beautiful island priced anywhere below $50,000 – and there are a nice selection of those – makes the overall cost of a home at Haig Point comparable in price to a similarly built home in a high-end mainland golf community. And any couple looking to escape the air and noise pollution of the mainland –- no private cars are permitted on Daufuskie Island –- should be willing to pay a little extra.
PRICES ON THE MOVE
I recently learned that between 2013 and through August of this year, the average individual property (homes and land) sold at The Cliffs Communities increased nearly $200,000. At The Reserve at Lake Keowee, a developing neighborhood of homes that first sold in the $400s just two years ago are now priced from the $600s. Most of the other golf communities I follow are showing increased sales traffic year over year and an increase in prices. Inventories of homes and sites for sale have inched down across the Southeast. All of this hints at land prices that may finally be starting to rise in golf communities and is a sign that the time may be right to claim your stake on a piece of land for construction of your dream golf home.
EXAMPLES OF EXTREME BARGAINS CURRENTLY FOR SALE
A mid-October scan of listings in some of our favorite golf communities yielded some impressive bargains. Please note that some of these may have been gobbled up by the time you read this. If you would like an update on these and the many other golf communities in the Carolinas that we can recommend, please contact us through GolfCommunityReviews.com.
Cliffs Falls South, Salem, SC: Partly cleared and sloping lot on 2+ acres with mix of hardwoods. Walking distance to Waterfall Park along wooded trail and short drive to Nicklaus golf course. New amenities on the way…$11,700 (golf membership for sale separately).
Cliffs at Mountain Park, Travelers Rest, SC: Sporting The Cliffs’ seventh golf course, a sand-filled links-like layout by Gary Player, Mountain Park could be poised for take off after being whipsawed by the recession. A bargain site at just a tad over 2 acres could make it much easier to get in on the low end in this high-end community … $13,000.
Berkeley Hall, Bluffton, SC: Wooded one-third of an acre in top golf community featuring two Tom Fazio golf courses. Easy driving distance to Hilton Head Island and Savannah. Impossible to find a better priced site…$1 (not a typo).
Haig Point, Daufuskie Island, SC: Half acre looks out on a lagoon and woods and is a short walk to the beach (about 3 ½ miles long). Membership available separately from Haig Point association for a $18,000 initiation fee. The Rees Jones 29-hole course is one of best in state … $1 (also not a typo).
Albemarle Plantation, Hertford, NC: Half acre in coastal community that adjoins the Albemarle Sound, with a focus on boating as well as golf. With a location in the northeast area of North Carolina, a trip to see family and friends up north is fast and easy … $9,900.