I was conducting a little research for a client today on Landfall, an expansive and well-established golf community near Wilmington, NC.  The community features 45 holes of golf, including 18 holes by Pete Dye and 27 by Jack Nicklaus.  Homes there are expensive, relative to most other golf communities I have visited and surveyed.

        Notes about Landfall at the popular real estate site Trulia.com stopped me in my tracks.  Here is what Trulia said about Landfall sales:

        “The median sales price for homes in Landfall…for Nov 09 to Jan 10 was $287,500 based on 28 sales. Compared to the same period one year ago, the median sales price decreased 63.5%, or $500,000, and the number of sales increased 75%.  Average price per square foot for Landfall was $171, a decrease of 35% compared to the same period last year.”

        Residents of Landfall would be shocked to learn that their homes had lost so much value so quickly.  The fact is, they haven’t.  Homes generally sell in the mid- to high-six figures in the community.  And Trulia’s own following words contradict their earlier data about Landfall.

        “The average listing price for homes for sale in Landfall was $1,060,317 for the week ending Feb 24, which represents an increase of 6.3%, or $62,926, compared to the prior week.”  Against a median sales price of less than $300,000, you can bet Landfall owners would not be listing their homes for over $1 million. 

        Confusing indeed.

        Owners at The Cliffs are on the horns of a dilemma or, more aptly, on the tines of Morton’s Fork.  Sir John Morton, Lord Chancellor of England in the late 15^th Century, figured out a diabolically brilliant rationale for collecting taxes from everyone in the kingdom.  Subjects who lived in apparent luxury, Morton decided, obviously had the means to pay their taxes.  On the other hand, all subjects who did not spend much money and appeared to live frugally, Morton reasoned, should have saved enough to pay their taxes.  The term Morton’s Fork emerged to define those situations in which you have two choices, both bad.

        I thought of Morton’s Fork today as I considered the dilemma Cliffs Communities property owners face.  Founder and developer

        Owners could be forgiven for thinking they might get skewered no matter what they decide.  If they deny Anthony the loan, he has indicated he will go to “Wall Street” to borrow it at much higher interest rates.  In the case of a default on the loan, the bankers would own The Cliffs, and you don’t have to be a visionary to understand what that could do to property values.  Anthony’s case to the owners is that if they lend him the money and he defaults, the property owners’ will acquire a rich consolation prize, direct ownership of The Cliffs’ amenities.

        Not to mix our metaphors, but becoming the owners of those lush and expensive amenities would be a Pyrrhic victory if ever

        The Cliffs property owners are smart people -- I know some of them personally -- but even they will have trouble choosing between the two alternatives their developer has presented.  They are on the horns of a dilemma, between the devil and the deep blue sea, and in a predicament of which only Sir John Morton could be proud.

        New England is often referred to as “The Land of Steady Habits.”  Apparently one steady habit in the northeast states is to commit to government employee pensions without the means to pay for them.

        Nationwide, states’ pension liabilities were unfunded in 2008 to the tune of about $450 billion, according to a study by the Pew

        Dealing with unfunded pension liability is not the sexiest of campaign platforms for a gubernatorial candidate, but at a Connecticut fundraiser this past Sunday for Nelson “Oz” Griebel, the Republican candidate made it clear it was among his top priorities.  And although there was not a wet eye in the house, at least one baby boomer in the crowd was thinking, “What if they can’t pay the bill in a few years?”

        Anyone with equity in their northern home and a desire to move has lots of good reasons to head south.  Climate is one obvious reason.  As I’ve indicated many times before, overall cost of living improvement is another.  Add to that an expectation by demographers of a continuing migration north to south, with the consequent higher price appreciations in home values in the south.  But now, with the economic stress many states are enduring, state funding for such commitments as pensions becomes another good reason to consider a move south sooner rather than later.  It may be unthinkable to consider a state like California or Connecticut going bankrupt, but if a state can’t pay its bills, the consequences will trickle all the way down to home values.

         In the southeastern U.S., South Carolina, Alabama and Mississippi are only a notch better than the New England states cited above, with between 70% and 78% of funding accounted for pension liabilities.  But Tennessee, North Carolina, Georgia and Florida are demonstrably more stable when it comes to funding their own state pensions, with 91% to 107% of their liabilities “in the bank.”

If you are contemplating a move south, even if it is years away, contact me and I will be pleased to help you consider all the criteria that are important to consider in making the move.

        Since his much ballyhooed apology, Tiger Woods has faded (again) from sight, leaving those associated with him to command some of the headlines.  Cliffs Communities developer Jim Anthony is still waiting for his property owners to respond to his request for up to $100 million in financing to help finish what Anthony and Woods started at High Carolina, site of the fallen star’s first American golf course design.  Meanwhile, inevitable skittishness that follows a developer’s financial problems is starting to work its magic on The Cliffs’ property values; we have spotted a number of “short-sale” properties in the Cliffs at prices 40% off their original listings, and one as low as $79,000.

        Then, a few days ago, Gatorade swallowed hard and severed its ties with their main spokesperson.  Now today comes word via an online Business Week article that the resort that hosted Woods’ apologia has gone bankrupt.  The owners of the Marriott Sawgrass Resort, which has access to more than 85% of tee times at the famed TPC Sawgrass golf course next door, have filed for Chapter 11 bankruptcy.  Such filings give a firm an opportunity to reorganize but, with vacation and convention traffic not expected to rebound until next year, major debt-holder Goldman Sachs could wind up as majority owner of the resort.

        The Pete Dye designed TPC Sawgrass golf course and its famed island green 17th hole is not owned by the bankrupt firm, but some golf villas, as well other resort facilities, are included in the filing.  There is no word if a value has been attached to those ugly dark blue drapes that served as such an appropriately somber backdrop to Woods’ recitation.