Much has been written about the resurgence of golf course communities amid the Covid-19 crisis, even by media outlets that once left them for dead following the Great Recession.
Golf rounds are skyrocketing throughout the U.S. as the royal and ancient game allows for social distancing and is a refuge for kids shut out of their usual school or recreational sports.
And real estate is white hot: new home sales in August jumped to their highest level in 16 years, and supply is beginning to dwindle in Sunbelt markets in the southeast and southwest.
Combine these ingredients and you have a recipe for happy real estate brokers and membership directors at private communities and clubs throughout the U.S.
The million-dollar question is whether or not the exponential uptick in golf course real estate demand is here to stay.
Here are five reasons to be extremely bullish about this $9 billion “niche,” and why living on the links will be a popular option in the years to come.
1. Fear is the Ultimate Motivator
The memories, both good and bad, of this global pandemic will stick with us forever. What’s more, now we know there’s not much we, or the government, can do to prevent another one.
But we can plan for it in subtle ways without succumbing to a full-on bunker mentality.
Golf communities are safe and spacious, and their private clubs can morph into grocery stores, dry goods pantries and curbside delivery service in times of need.
And it turns out that golf and tennis, the tried-and-true traditional activities of country clubs, are the two safest pandemic sports.
The Centers for Disease Control and Prevention (CDC) ranked tennis an eight and golf a seven on its socially distant scale of 1-10 (10 being the best).
Golf clubs and courses were quick to require that flagsticks remain in cups, rakes be removed from bunkers and golfers ride solo in carts. That combo likely makes golf more like a nine than a seven.
2. Cheap Money is the Best Money
In March, the Federal Reserve issued an emergency rate cut on loans, which in turn saw banks set mortgage rates below three percent. And now comes the news there may be no rate hikes for another three years.
While the latest uber positive housing report has rates ticking up slightly, most experts believe cheap money is here for the foreseeable future.
In fact, in a recent Bankrate article, rate watchers and prognosticators predict we’ll stay around the three percent mark for the balance of 2020 and even dip as low as 2.5 percent in 2021.
A golf community buyer is an affluent buyer, and the affluent are affluent because they’re smart with their money.
3. Working Remotely is Here to Stay
At first, we thought it was just a temporary thing.
“We’ll be back to our super-vibrant, super-synergistic, Facebook-like open floor-plan office space in no time at all,” company leaders and employees reasoned.
Uh, no we won’t.
Once big tech and SAS companies pulled the plug on returning employees to their Silicon Valley Shangri Las, there was a trickle-down effect reaching just about every professional services segment.
As hot as residential real estate is, commercial real estate is equally as cold, if not more. Impacting the demand for golf communities is the freeing up of executive level employees to live where they want.
The C- and VP-suite may eventually commute to headquarters periodically to grab some socially distanced face time with their team or be required to make quarterly trips to meet with the board.
But the remote work experiment that took place over the last six months has propelled the satellite workforce trend ahead light years.
Factor in Zoom, WebEx, Google Meet and DocuSign and working from home is no longer a trend, it’s a thing.
4. Politics and Economics are Powerful
Politics are polarizing, so we won’t wade into that pool, here. But suffice it to say, many folks are completely and utterly freaked out about being told to stay at home by the government and having their place of business shutdown.
As we all know, the majority of golf communities are in states that have been the least restrictive in keeping businesses open and giving their citizens free range of motion.
Moreover, Arizona, Georgia, South Carolina are low tax states, and Texas, Florida and Tennessee are no tax states when it comes to income.
Layer on top of that the low cost of living in most of these states and the gravitational pull is formidable.
5. Clarity Provides Purpose
You know that “third act” those in the retirement and relocation business always talk about?
It typically begins around 65 when people throw down the gauntlet and do exactly what it is they want to do for the rest of their life.
Well, that age shifted seismically south to around 45 during the pandemic. Highly motivated people with a vision for their, and their families’ futures, kicked these “future plans” into high gear.
The average new resident / new member age at private communities and clubs is plummeting toward the early 50s and could soon be in the late 40s.