The fastest and most painless way to put more money into your pocket is to move. There is always someplace cheaper to live than the place you are living in now. And if you are living north of the Mason-Dixon Line, chances are you will not only save lots of money by moving South, but the bonus in most places is that you can play golf virtually every month of the year. Try that in New England in January.
From time to time we like to remind ourselves, and our readers, that the costs of living can vary widely from one city to another. That is still the case when you compare many suburban areas of the North with popular, golf-oriented areas in the South. But because housing is generally the most significant component of the differences between expenses –- homes, property taxes and utilities are generally much cheaper in the South –- the cost of living differences are beginning to narrow as more people migrate south and demand for homes catches up with supply.
Here are some comparisons we have worked up to show that big savings are still available when one relocates from a high-cost area to a low-cost area. We have included recommendations of local golf communities we have visited. To create your own customized comparisons, go to BestPlaces.net and use their cost of living calculator.
Move from West Hartford, CT to Columbia, SC Save 26% annually Consider Woodcreek Farms, Wildewood and Cobblestone Park golf communities
Move from Naperville, IL to Wilmington, NC Save 27% annually Consider Landfall, Porters Neck, Brunswick Forest
Move from Bethpage, NY to Hendersonville, NC Save 37% annually Consider Champion Hills, Kenmure
Move from Naples, FL to Charlottesville, VA Save 32% annually Consider Glenmore, Keswick Hall, Wintergreen Resort
Move from Fox Chapel, PA to Savannah, GA Save 54% annually Consider The Landings, Savannah Quarters
Move from Morristown, NJ to Sunset Beach, NC Save 26% annually Consider Ocean Ridge Plantation, River’s Edge
Move from Saratoga Springs, NY to Greenville, SC Save 26% annually Consider Cliffs at Glassy, Cliffs Mountain Park, Cliffs Valley, Green Valley, Pebble Creek, Greenville Country Club
Move from Stamford, CT to Aiken, SC Save 50% annually Consider Woodside Plantation, Cedar Creek
Move from San Francisco to Asheville, NC Save 58% annually Consider Mountain Air, Cliffs at Walnut Cove, Reems Creek
Move from Ann Arbor, MI to New Bern, NC Save 21% annually Consider Carolina Colours
If you would like more information on any of these golf communities, please contact me.
Move, Play Year-Round Golf, and Save Tens of Thousands of Dollars
What if you could move to a better climate and earn tens of thousands of dollars for doing it? This is not some theoretical exercise or reverie. One couple from northern Vermont who relocated to Woodside Plantation in Aiken, SC, saved 28% on their total annual expenses. Another couple I assisted moved from Simsbury, CT, to The Landings outside Savannah, GA, and saved 25% annually. In the extreme case that a couple from, say, San Francisco was to choose to relocate to, say, the Fairfield Glade community on Tennessee’s Cumberland Plateau, their annual savings could reach as much as 56%. Every couple’s spending levels and budgets are different, but assuming a current spend of $100,000 per year – how can you help but spend that in a high-cost metro like San Francisco? -- our Bay Area couple could go on a four-month round the world cruise with just their first-year savings.
Okay, okay, I know that the Cumberland Plateau is not exactly San Francisco, and that there is a price to be paid for the perquisites of urban living. But $56,000 a year buys a lot of hotel nights in San Francisco...or Paris, Buenos Aires, London or Barcelona. (For those who spend less than $100,000 annually, apply the cost of living percentages to whatever you spend.)
These dramatic cost of living savings and milder climates are driving an unprecedented migration to the Carolinas. According to the annual United Van Lines audit on all the people they move, South Carolina and North Carolina ranked numbers two and three, respectively, in terms of net migration in 2014. (Oregon ranked first, for some reason.) Climate and cost of living, substantially because of lower taxes and home costs, are the main drivers of the moves south, and as northern states desperately – some would say “clumsily” – attempt to make up for declining populations and pension obligations to state workers with additional taxes, the exodus will only continue. In my adopted home state of Connecticut, for example, a recent survey indicated that almost half my fellow state residents would prefer to live elsewhere.
$3 Billion Second-Home Market
In a briefing recently for a group of Pawleys Island, SC, area real estate agents, Pat Mason, co-founder of the Center for Carolina Living Inc, shared some riveting data about growth in the two states that he has studied and promoted for three decades. Pat forecasts that, this year, 450,000 people will choose to relocate to the Carolinas to retire, start businesses or purchase second homes. The second home market alone generates $3 billion in annual sales in the two states. Those are impressive numbers but the most startling figure for me was that every year, the equivalent of one-quarter of the population of the U.S., or 81 million people, visit the Carolinas; not surprisingly, most are from the “frost belt” in the northeast and Midwest but plenty visit from Florida and California -- the former to experience milder summers and the latter to experience lower costs (and, lately perhaps, to see what lawns in drought-free states look like).
What Pat and other researchers refer to as the Carolinas “In-migration Industry” has real estate professionals throughout the two states working longer days showing prospective buyers around their local communities and taking calls from prospective sellers looking to cash in on the sudden uptick in the market. But despite the price rises that should have more people listing their homes, local Realtors are facing a problem they haven’t seen for a decade or more – lower inventories. That may seem like a nice problem to have, but the reality of more buyers than there are homes to sell is like advertising shirts at deep discounts at J.C. Penney and having only a few shirts on hand when the crowds arrive. The lack of inventory is having an effect on the sale of home sites, which are still in good supply, but the prices of lots are firming up as people who can’t find homes that suit them are deciding to build on the choicest sites available.
Those who fear prices will continue to rise but aren’t quite ready to make a full commitment to a home might consider the purchase of a lot or condo now. The rising tide should, in strong markets, raise prices of all types of properties. That seems the case with condos, for example, which have become hot properties in places like Pawleys Island, SC, where one real estate agent recently told me he cannot find short term (i.e. three to six-month) rentals for customers who are building a home or moving to the area to spend some time before committing to live there.
The relationship between supply and demand affects pricing across every real estate market and every category of property. Right now in many areas of the South, demand is high and supplies are becoming tight. You don’t need to be a Federal Reserve economist to figure out what that means for prices.
Callawassie joins roster of communities with $1 lots for sale
Depending on your appetite for risk, now is either a great time or a horrible time to buy a property –- lot or home -– at Callawassie Island, the heavily live-oak-treed community located between Bluffton and Beaufort, SC, that sports 27 holes of Tom Fazio golf. The course underwent a $4 million renovation in 2008, just in time for the recession.
The Worst of Times
It is a horrible time to buy at Callawassie because residents of the previously well-regarded community are suing the club, and such actions are never good for image and, therefore, property values. The lawsuit arose when the club decreed that membership was now mandatory for all property owners in Callawassie. That meant, for example, that a person sitting on a piece of undeveloped land that they visited once every few years was now responsible for paying dues to a club they might not ever use. In initial court actions, the club has won but Callawassie’s recalcitrant owners are persisting.
According to the Island Packet newspaper, Lolita Trifiletti, a Charlotte, NC, resident who purchased a home site at Callawassie in 2005 in anticipation of her eventual retirement, had become used to paying $100 a month in dues for a club she hadn’t visited in seven years. Last year her dues reached over $600 per month under the new plan, and when she tried to resign, the club told her she needed to pay back dues of $38,000. She is a plaintiff in the lawsuit.
The Best of Times
On the other hand, it is a terrific time to buy at Callawassie because the effect of the lawsuit and associated bad publicity has driven down property prices below their inherent values, with lots selling as low as $1; we counted a dozen properties listed currently at less than $10,000. The least expensive home in the community is a 3 bedroom, 2 bath townhouse, circa 1986, whose price tag of $140,000 works out to about $87 a square foot, a bargain by any measure, even if it may need a little cosmetic surgery. For many folks, that reasonable investment will leave a lot of room in the budget for mandatory club fees (golf dues are optional; see below).
The way Callawassie chose to force residents to become members may be unusual (some might say callous), but mandatory plans themselves are not. And they make sense, especially if golf’s popularity tends to erode and puts pressure on golf clubs’ financial viability. A case could be made that at a time when golf club membership rolls are under stress and fewer people appear to be willing to commit to any type of membership, forcing residents of surrounding properties to be members is an exercise in survival. No less than the upscale communities just down the road in Bluffton –- among them Belfair, Berkeley Hall and Colleton River -- employ mandatory membership programs. And although the vaunted Cliffs Communities in the Carolina Mountains do not strictly compel membership for residents, try selling a home there years from now that does not have membership attached to it. De facto, membership at The Cliffs is mandatory.
Their Pain, Your Gain
For those currently considering a golf community like Callawassie, we suggest that the pain of the current residents could be your gain. Initiation fees have dropped from $45,000 to $15,000; revised dues for basic membership are set at $685 a month, which includes access to the community’s docks, kayaking, fishing and crabbing; six Har-Tru tennis courts; a clubhouse with full-service dining, adults-only pool overlooking the marsh, pool-side snack bar, bocce, croquet courts and a horseshoe pit; access to the River Club, which overlooks the Colleton River; fully equipped fitness center; and other amenities you would expect in any well-appointed community. If you intend to use many or all of those amenities, $685 seems competitive with other communities.
For an extra $300 per month, you can play unlimited golf or opt to pay as you go instead for just $60 per round. You don’t have that kind of flexibility at the aforementioned Bluffton communities, where golf is part of the mandatory package and carrying costs reach beyond $15,000 annually.
Rumors of Golf’s Death Exaggerated
Whether to consider a community like Callawassie or not comes down to what one thinks of the future of golf. The short-term future –- we are talking a couple of decades -– is fine. The huge baby boomer cohort has years to play out, and there is enough interest in golf among members of that large group that, absent any severe hit to the general economy, property values in golf communities perceived as high value will grow in the coming decade. (We are seeing that throughout the southeast currently.) In the longer term, golf will have something between niche and mass appeal and, more important, human nature will prevail; folks who have made money during their working lives will look to reward themselves -– and, yes, validate their successes –- by buying into communities perceived to have the best amenities.