Just when you start to believe that the divorce between golf and residential real estate is final, along comes Henry DeLozier to broker a reconciliation.
“As housing continues its recovery,” DeLozier contends in a story for Golf Course Industry, “more golf communities and clubs will be developed because golf courses remain extremely attractive amenities.”
Extremely attractive to whom? The number of U.S. golfers continues to shrink, and evidence suggests that most home buyers nowadays would prefer to live in communities with amenities such as lakes, organic gardens and hiking paths. Does anyone believe that millions of prospective home buyers who’ve been reading ad nauseam in recent years about golf communities going bankrupt are now itching to buy into one? Today, anyone who really wants to live in a house along a golf course fairway can have his pick of them, from coast to coast.
Taylor Morrison currently has a pair of golf communities under construction in Florida, but are other major home builders planning to build any? Toll Brothers? Del Webb? And if the opportunity would happen to materialize, how many lenders would be willing to finance them?
DeLozier knows the golf and housing industries well, because he used to help develop golf communities for Pulte Homes. In fact, he’s likely had a hand in the development of more golf communities than anyone on earth.
So he knows that precious few U.S. golf communities sold even half of their houses to golfers. The majority of the residents in these communities bought for the views, not the golf, foolishly believing that their sight lines would be forever protected. They learned the hard way. But the next wave of buyers already knows the score. What sort of premium will they be willing to pay for a lot next to an expensive, hardly used amenity that can close on a whim and, under the right conditions, be replaced by rows of townhouses?
“No one wants to see a return to the poor decision-making that led to too many overbuilt markets and under-financed properties,” De Lozier writes.
Agreed. But the problem isn’t simply that golf courses built primarily to sell real estate contributed to overbuilding. The problem is that they were, by and large, lousy layouts – needlessly difficult, with fairways choked by houses and routings that could only be negotiated with carts. They took the fun out of golf, caused millions to flee the game and ruined the business for everybody.
DeLozier is right on target when he writes that the housing industry has a crucial impact on “unemployment, consumer confidence and discretionary spending.” In this general sense, the health of the housing market most certainly affects the golf industry. But in this general sense, it also affects sales at restaurants, movie theaters, sports events and everything else in our lives.
No matter what the experts may say, the golf industry doesn’t have a special connection to the housing industry. For a few decades in every century, when houses are selling like hotcakes, home builders simply make it seem as if there is.