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January, February 2017

 

savannah lakes, tara course, mccormick, sc
  January/February 2017  Savannah Lakes (Tara Course), McCormick, SC

The Prices of Success
in Top Golf Communities

The golf real estate professionals we work with in the best golf communities in the Southeast provided us with property sales figures for 2016 compared with 2015.  Here is our analysis of a few of them.

Wintergreen Resort, Nellysford, VA

For golfers who ski, or skiers who golf, there may be no better place for a vacation or full-time home than Wintergreen, located beside the Blue Ridge Parkway and about an hour west of the vibrant university town of Charlottesville, home to the University of Virginia.  Wintergreen features two distinctly different areas; the mountain that reaches to 3,515 feet and includes the top of the ski run and Devil’s Knob Golf Course, virtually side by side, and the valley floor, site of a separate community of homes around the 27-hole Rees Jones Stoney Creek Golf Course.

A mix of condominiums and single-family homes, Wintergreen’s prices eroded a bit in 2016 as new owners took over from Jim Justice, the billionaire owner of the Greenbrier Resort and the newly elected governor of West Virginia.  Justice poured more than $12 million into the resort after buying it three years ago, and the new owners have quietly shared plans to continue the upgrading.  Perhaps because of the anxiety about new ownership, the average price of detached (single-family) homes on the mountain at Wintergreen dropped from $409,000 in 2015 to $338,000 last year.  The average price of condos sold on the mountain from 2015 to 2016 increased by $5,000 to an average $153,000.  Older vintage single-family homes on the mountain sold as low as the $100s, including a 3 bedroom, 2 bath home that was purchased in 2016 for $179,000, or $90 per square foot.  Mountain condos, some with strong mountain views, may be an even better buy, with plenty of 2 bedroom units selling last year at prices under $100,000. 

Pawleys Plantation, Pawleys Island, SC

I take sales performance in Pawleys Plantation seriously and personally since my wife and I have owned a condo there since 2000.  The recession was especially unkind to values in Pawleys Plantation, with condos losing about 35% at the depths of the recession, lots about 50% and single-family homes about 25%.  Two-bedroom vacation condos along the 10th and 11th holes that had been selling for around $140,000 pre-recession dropped to a low of $105,000 in 2009.  Today you won’t find one of those condos listed under $135,000.  Currently, the average list price for the 13 condos for sale in Pawleys Plantation is $227,500, and the average listing price for the 18 single-family homes for sale is $459,000.  For those interested in building a home to their exact specs, 18 lots are available at an average list price of $134,500; consider around $150 per square as the typical cost to build a home with nice accessories.

Our thanks to Cathy Bergeron, our agent for Pawleys Plantation and a fellow resident, for furnishing the above data.

Woodcreek Farms, Columbia, SC

Columbia doesn’t exactly jump to the top of the list for those seeking to retire to golf or a vacation spot.  But maybe it should.  In the Milken Institute's list of Top Performing Cities, Columbia jumped 32 spots to a ranking of 75.  This major university town features all the benefits of big time athletics, continued learning and entertainment options that come along with a school of nearly 30,000 students.  Such an institution adds to the stability of the area as well, since faculty and staff employment is pretty much ongoing through the years.  Many of those staff reside in the area’s short but fine list of golf communities, chief among them Woodcreek Farms.  Woodcreek is less a golf community than it is a neighborhood with a country club and Tom Fazio golf course at its heart.

In 2016, sales increased in Woodcreek Farms largely because such major developers as D.R. Horton are now building high-end homes but at lower prices per square foot than previous new construction.  Lot sales have been slow, according to our agent for Columbia, Mike Wyka, which may represent a buying opportunity. Woodcreek Farm members have full privileges at the nearby Wildewood Country Club, and vice versa, where the tennis facility and the kitchen in the club house were totally redone last year as was the Woodcreek golf practice facility.  Mike indicates some college golf tournaments are scheduled at Woodcreek for 2017.

In 2016, 72 homes sold in Woodcreek Farms at an average price of $438,000, a modest $13,000 increase of the average of 61 homes that sold in 2015.  Wildewood homes sold in 2016 averaged $387,000 on 63 sold compared with $380,000 on 46 sold in 2015.  And in nearby Blythewood, home to Cobblestone Park as well as the classic Columbia Country Club’s 27 holes, Cobblestone’s 86 sold homes averaged $273,000 compared with 83 homes sold in 2015 at an average $285,000.  All homes sold by D.R. Horton at Cobblestone Park include membership in the semi-private club whose clubhouse and pro shop were recently completed.

Champion Hills, Hendersonville, NC

Real estate professionals at Champion Hills believe the 2016 Presidential election may have caused some potential buyers to adopt a wait and see attitude.  Sales in the beautifully landscaped, mountain-oriented community were down from 25 in 2015 to 21 last year, and the average sale price dropped from $644,000 to $603,000.  After the year started with significant sales activity in January and February, activity gradually slowed “the closer we got to the election,” says Champion Hills Realtor Mary Kay Buhrke.  In the month immediately after the election, six homes sold in the community and that, says Mary Kay, has continued into January 2017.  She believes high-end buyers – the average price for homes sold in Champion Hills is typically around $700,000 – are waiting to see how the economy and stock markets do in the first quarter.  “If all goes well,” she adds, “this could be a banner year for real estate.”

Colleton River, Bluffton, SC

Until the big three high-end communities in Bluffton – Colleton River, Belfair and Berkeley Hall – flush out their remaining inventories of ridiculously low priced lots, a hangover from the recession, home prices will remain lower than their inherent and pre-recession values.  (We have written often about nice $1 lots for sale in these communities, and a few still remain.)  Tom Jackson, our veteran agent for Bluffton, Hilton Head and Daufuskie Island, says “[Home] prices have not really changed in these areas in the last two years as there are still great buys on lots.  When lot prices go up, so will the homes…”

Tom reports that sales of homes were down year over year in Colleton River (from 25 to 22) and Berkeley Hall (27 to 19) but up slightly in Belfair (27 to 33).  All of these communities feature at least 36 holes of golf –- Colleton River includes 45 holes by Nicklaus and Dye -– and mandatory membership for residents, a factor that might also be slowing sales activity for all but the most financially independent buyers.

Reynolds Lake Oconee, Greensboro, GA

There may be no rural area more densely populated with high quality golf communities than Greensboro, located about 90 minutes from Atlanta’s international airport. If Greensboro is too remote to attract significant numbers of people, then no one told the 152 new owners of homes at Reynolds Lake Oconee (formerly Reynolds Plantation) in 2016. Lots sold well also, and at this writing, 100 new homes are under construction in the sprawling lakeside community. Reynolds’ six golf courses are as good as it gets for golfers dedicated to diversity of layouts and nearly flawless conditions. Under the ownership of financial services titan Metropolitan Life, Reynolds has come virtually all the way back from the fallout of the recession. One clear sign: The membership roll at Reynolds has reached 3,400, representing folks from 48 states and 12 countries.

Two other top-notch golf communities are located in Greensboro; Cuscowilla and its celebrated Coore/Crenshaw layout, and Harbor Club, a buttoned-up lakeside community where Hall of Famer Mickey Mantle once lived and hit golf balls a rumored 400 yards. Home sales in Cuscowilla, which offers a nice array of single-family and town homes, were down by just five homes in 2016, but the quality of the golf course is attracting more and more visitors annually, and there is every reason to expect an uptick in 2017. Sales of homes at Harbor Club were up by 13, going from 28 to 41. Harbor Club’s architecturally harmonious inventory of homes are perfectly in keeping with its lakeside location, a nice option for those looking for a slightly lower price point without the need for more than one excellent golf course, in this case a terrific semi-private designed by the team of Tom Weiskopf and Jay Moorish.

 


If you would like more information about any of the communities listed above, or dozens of others we can recommend, please send me a note at editor@homeonthecourse.com


Why 2017 May Be Your Year
to Buy a Golf Home

For those whose window to purchase a vacation or retirement home in the South is between one and five years, this may be the right time to think in terms of sooner rather than later.  Here’s why:

Price Rises Look Like a Trend

Consensus is building that the price increases of 2016 will continue through the coming year.  Already, some markets –- Naples, FL, comes to mind –- have whizzed past the exalted price levels of just before the 2008 recession.  Naples homes lost about 50% of their value during the recession but most golf communities have come all the way back and then some, showing prices in 2016 beyond the previous high point of the market.  And even though mortgage rates have begun to rise and are likely to continue to do so in 2017, experts do not see any adverse effect on the housing market.  Furthermore, many retirees won’t be financing their new homes in the South but rather will cash out of their primary homes, downsize into a cheaper market, and pay all cash.  Finally, inventories are way down across most of the country, and even the armchair economist knows that when demand is high (mostly from baby boomers) and supply is low, you can count on prices rising.  Baby boomers with primary homes they plan to sell might want to consider a shorter time frame.

Price Decreases Look Like a Blip

There are some select golf communities in the Southeast where prices stayed pretty much level in 2016 and a few where they decreased.  Because of the aforementioned supply and demand realities, these could represent the best bargains of all.

Sometimes numbers mislead.  In Cobblestone Park, north of Columbia, SC, started as a high-end luxury community by the ill-starred developer Bobby Ginn, median home prices dropped $13,000 between 2015 and 2016 to $272,600.  But rather than some phantom market force causing the slide, it was more a consequence of D. R. Horton, a major builder inside Cobblestone, offering new, slightly lower-priced models that turned out to be popular.  Cobblestone’s recently constructed clubhouse and pro shop create more intrinsic value in the homes that were already there; and the excellent 27-hole Lee Janzen/P.B. Dye semi-private golf course doesn’t hurt either.

Price trends in 2016 at western Virginia’s Wintergreen Resort were, as some might characterize them, “stupid crazy.”  No community east of the Mississippi combines the pleasures of golfing and skiing more adeptly than does Wintergreen, located beside the Blue Ridge Parkway and about an hour west of the university town of Charlottesville.  At a few hours from Washington, D.C. and with seasonal and year-round homes priced at some of the lowest levels of any golf community we know, Wintergreen is strangely undiscovered.  Average price levels of $148,000 in 2016 for mountain-located condominiums and $348,000 for mountain-section single-family homes were both down a fair percentage year to year, possibly the result of a change of ownership at the resort.  But our sales professional at Wintergreen, Steve Marianella, informs us that the new owners, the experienced EPR/Pacific Group, have a year of operations under their belt now and had the best "non-ski" season in Wintergreen’s 40-year history from last spring through fall.

Migration from North to South picks up steam

The latest census reports show that flows of population from cold northern states to warm southern states are increasing once again.  It had slowed a bit during the recession years.  We rely on migration reports from the big moving companies that are based on the numbers of customers they move from one state to another.

United Van Lines' annual National Movers Survey is easy and fun to review.  These movers shake things up with a colorful map at their web site that shows distinctly which states gained population, which lost and which states are essentially in balance. The 2016 survey indicates the big winners were the Pacific Northwest states and the Carolinas, although South Dakota topped all states with a 68% inbound rate (which meant 32% left the state).  Oregon (67% inbound population), Idaho (65%), and Washington and Nevada (58% each) were among the states with what United Van terms “high inbound” rates.  North Carolina also showed a 58% inbound rate, but South Carolina nosed out its neighbor with a 60% inbound rate.  The only other state with an inbound rate higher than 57% was tiny Vermont, with a 67% rate that virtually tied Oregon for second spot.  (United Van says Vermont just inched out Oregon.)  My daughter was graduated from the University of Vermont in Burlington, one of the most interesting small towns in America, and chose to live in Vermont after graduation.  I make many visits there, drink the best craft beers in America and eat in their ubiquitous farm-to-table restaurants, and I totally understand its popularity.  My wife and I could very well contribute to Vermont’s inbound rate in the coming years.  (Although not dense with country clubs, the courses at Vermont ski resorts and at other locations are first rate.)

With a 57% inbound rate, Florida (and Arizona) are considered in the study to be “medium inbound” states; all other states in the Southern half of the nation were “in balance” in 2016, meaning the difference between the inbound and outbound rates are, in the survey’s terms, “negligible.”  Among the largest “outbound” states were Connecticut and the Middle-Atlantic states (New York, New Jersey, Pennsylvania) and all the Rust Belt states except for Indiana, which was balanced.  As a Connecticut homeowner, I take its place on the list as a signal that now may be the time to sell.  (We are fixing our 35-year-old house up to do just that.)

Mortgage rates start to rise

In December, the U.S. Federal Reserve raised its short-term key interest rate and, not unexpectedly, mortgage rates rose at about the same time to their highest levels since April 2014.  For those of us who remember the 1980s and mortgage loans with rates in the double digits -– my wife and I had one of those at a 13.5% interest rate –- 4.4% looks quite good.  But many homebuyers of the last few years are sitting with rates under 3.5%; we are not likely to see those again for a long time.

For baby boomers with lots of equity in their current primary homes, mortgage rates may be largely irrelevant.  Who needs the stress and obligation of having to pay off loans in retirement?  But at rates below 4%, borrowing was a cheap way to get into a slightly bigger and better home than you might have considered, or to take out a home-equity loan at equally low rates that might have helped renovate a newly purchased home you might not ordinarily have bought without “cheap” money.  If rates continue to rise, that window might close.

Inflation rears its head

If past is prologue, the inflation many experts are predicting should not have an adverse effect on the affordability of homes.  The prices of homes will generally reflect the rate of inflation, and as long as Congress doesn’t eliminate the tax deduction for mortgage interest, home ownership should continue to be a modest to good deal. Yes, prices of most everything should rise, including home prices, but so too should incomes (savings rates and salaries). 

But a rise in income from salaries doesn’t do much for us retirees who are largely on fixed incomes.  Social Security and pension payments may provide reliability, but they certainly are not dynamic; and in a battle with inflation, fixed payments obviously lose.  In short, if you believe, as many economists do, that some inflation is at hand, and you rely mostly on fixed sources of income, then waiting too long to buy a home for your retirement years could erode your buying power as home prices rise.

A Nice Place to Wait for the End of Days

Many people, maybe half the country that did not vote for Donald Trump, are suffering from a disease called “Inauguration Anxiety” and a touch of schizophrenia.  Those disposed toward anyone but Trump don’t quite know how to reconcile that their 401K and other accounts invested in the stock market grew by double digits after the November 8 election; the fuel for the increases was likely because regulations designed to protect consumers but seen as onerous by financial institutions are in for a re-hauling.  Wall Street likes that.  Those of us who are retired should be especially nervous about changes because, of course, we have the shortest time horizons and the least flexibility; if national or world events cause upheaval in the coming years, we baby boomers don’t have that many more years to recoup our losses.

Russia, Syria, ISIS, Iran, how to replace the Affordable Care Act, racial tensions –- the world would be a daunting place for even the most experienced leader.  The next four years are likely to be filled with anxiety and stress.  What better place to hide out than in a lovely home adjacent to a terrific golf course.  Just cut the cord on cable news and watch a lot of feel-good movies.

Predictions for 2017 House Market,
and a Few Calculations

Zillow, the popular online real estate enterprise, predicted in November that home prices would rise 3.6% in 2017 based on the input of 100 top economists and housing experts.  The National Association of Realtors prediction was pretty much in line.  As of last November, home values had risen 4.8% in 2016.  At this point, though, just days before the Presidential inauguration, any prediction about the housing market, or the general economy for that matter, seems a fool’s errand.

If, for example, President-elect Trump follows through on his plans to deport undocumented immigrants, the construction of new homes would likely slow dramatically.  (And the labor costs to build them would increase, forcing home prices higher.)  Nationwide, there is already a low inventory of homes for sale, and any slowing of new construction could drive prices up.  Concurrently, any rollback of financial regulations and the lowering of taxes, core Trump promises on the campaign trail, could make it easier for developers and homeowners to borrow money, although some experts predict an additional spur to inflation if some of the shackles are thrown off the banks.

Historically, rises in mortgage and inflation rates tend to dampen increases in returns from stock market investments.  The stock market investments of the last year, especially in retirees’ IRA and 401K portfolios, should stimulate confidence in the purchase of a home, especially among those already wealthy citizens with significant investments who are looking to relocate, say, to a warm weather climate.   In short, an inflationary period could mean that the housing market actually does a little better than the stock market in the coming year or four.  Those with the resources to make a move might consider one sooner rather than later.

Regardless of what the future holds, those who own primary homes in the North and plan to move South are holding the hot hands for now.  First, the low inventory of homes across the country (supply) intersecting with the interest of millennials and others in purchasing their first or an upgraded home (demand) may mean homes that many have owned for decades are near their peak values, an argument that now is a good time to sell.  Second, and perhaps more important, it is cheaper –- in some areas a lot cheaper –- to live in most places in the South than it is in the North.  Regardless of the impact of other factors that make housing market predictions difficult, one thing is certain:  You will save a lot of money -– i.e. give yourself a raise –- if you move from North to South.

How much of a raise, you ask?  Here are a just a few comparisons of the cost of living in cities North and South (courtesy of BestPlaces.net):

Moving From…. …To Annual Savings %
Boston Charleston, SC 32%
Morristown, NJ Asheville, NC 26%
Schaumburg, IL Savannah, GA 23%
Dix Hills, NY Wilmington, NC 46%
Kingston, RI Georgetown, SC 35%
Wilton, CT Aiken, SC 60%
Haverford, PA Greenville, SC 49%

If, for example, a couple living in Kingston, RI, spends a total of $100,000 per year on all their living expenses, they would save $35,000 by moving to Georgetown, SC, conveniently located between Myrtle Beach and Charleston.  

Savannah Lakes Village's Excellent Year

Sales at Savannah Lakes Village in McCormick, SC, were up almost across the board last year.  That performance reflected sales in many of the other golf communities we follow.  See related notes in the accompanying sidebar.

I’ve written many times that Savannah Lakes Village offers pretty much the best bargains in golf community living, with two interesting and challenging golf courses and extremely low fees for the amenities on offer. Our real estate pro in town, Michael Sherard, reports that in 2016 his agency sold 72 homes in the Lake Thurmond community, including 10 with golf course views and 18 on the lake. Average sales price increased nearly 6% to a still reasonable $206,736. Interestingly, that was almost precisely the average cost of a golf view home that sold last year. Waterfront homes averaged $319,000 per sale, quite a premium over other locations in Savannah Lakes but still way below the $1 million plus paid for lakefront homes in communities considered more “upscale” than Savannah Lakes. Lot sales for 2016 almost doubled over 2015’s numbers, with a surprising 46 sold. As an endnote, I think Savannah Lakes’ experience in 2016 is a harbinger of what very well could happen in golf communities across the Southeast. Contact me if you would like an introduction to Michael Sherard and Savannah Lakes or to any of the fine golf communities we follow.

 

Larry Gavrich
Founder & Editor
Home On The Course, LLC

 

 

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