An excerpt from:
As golf declines, life on links ain't what it used to be
by Mike Perrault and Keith Matheny, USA TODAY
Ashley is the kind of die-hard golfer and second-home buyer who has driven much of the real estate growth in California's Coachella Valley and other golf-oriented residential areas such as those near Las Vegas, in Arizona, Florida and elsewhere.
But fewer Bill Ashleys are coming.
"We're not getting replacements for those people," said real estate analyst Lou Goodkin, president of Miami-based Goodkin Consulting.
"There are fewer golfers, fewer people who can pay the high amounts to buy into a club. There's going to be a lot more people out there that are challenged in their retirement years than we've had in the past."
Golf resort communities are bleeding money and members, as the recession exposed the vulnerability of the business model that created an unbreakable linkage between golf and real estate.
In the nine cities of the Coachella Valley, including Palm Springs, where multiple presidents, Bob Hope and Frank Sinatra swung the clubs and lived in golf-centric resorts, today nearly one out of every four homes listed for sale is on a golf course.
"We're entering a new normal," said Pete Halter, chairman of The Halter Companies, an Atlanta firm that advises developers. "We can't think this will be over soon. Things have changed for good."
Among the forces reshaping the relationship between golf and real estate:
•Fewer people play golf, and Baby Boomers don't have the time, money or interest in the game their parents did. The number of golfers in the U.S. has fallen by 13% in the past five years, according to National Golf Foundation statistics. The number of golf rounds played nationwide last year through November was down 3.5% from the previous year, according to the foundation.
•Nationally, golf memberships have dropped by a million since the early 1990s, and of the 3,400 courses built across the country in the past decade, 93% are daily fee courses, according to industry associations. Coachella Valley golf resorts have responded by slashing often six-figure club membership fees by as much as 70%.
To read the entire article:
http://www.usatoday.com/money/economy/housing/story/2012-01-15/golf-communities-real-estate/52591988/1
Interesting article. It's clear that Cranbrook will have to do more than just rely on the second home market to support the economy.
ReplyDeleteThanks for this timely article. The golf/real estate business model also applies to ski resorts in our Kootenay valley. Ski and golf resort owners have relied on Albertans, Americans & Europeans to sustain their model... now they're left with mainly the Albertans... yikes. Resorts require profits from real estate development to support losses from operations. Continuing decline in the market for recreational real estate will cause many resorts to fail.
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