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Fore! – Golf Still Drives Value for Housing; But How Much?

Golfer surveys the fairway at a Houston golf course. (Photo by Ralph Bivins, Realty News Report)

Golfer surveys the fairway at a Houston golf course. (Photo by Ralph Bivins, Realty News Report)

HOUSTON – (By Dale King) -A golf course view is a lovely amenity for your home. But a golf course in the neighborhood can actually put more money in your pocket if you’re planning to sell, says a new university study.

Most of the real estate folks around Houston interviewed by agree with the faculty-conducted study out of Florida Atlantic University in Boca Raton, Florida, stating that “having a property adjacent to a golf course adds…value.” Though locals did not specify a figure, the FAU document estimates the average value upgrade is between 8 and 12 percent.

“Preliminary results from statistical pricing models suggest that properties receive a pricing boost,” said Ken Johnson, Ph.D., a real estate economist and an associate dean of graduate programs and professor in FAU’s College of Business. “Thus, there is strong evidence to conclude that golf courses remain a positive draw to potential property owners.”

But all Houston real estate professionals interviewed agreed that even more important to potential home buyers – perhaps the most critical factor of all – is the quality of schools.

Shad Bogany, a Realtor, real estate agent and former chairman of the Houston Association of Realtors, said the FAU study is on target. “Typically, homes in a golf community are higher-end properties. You don’t see golf courses in entry-level communities.”

Cindy Hamann, chair of HAR

Cindy Hamann, chair of HAR

Golf “is an amenity that many people are passionate about, especially retirees” said Cindy Hamann, the current HAR chair. Whether the home is inside the golf community or adjacent to it is just as good, she added.

Bogany, in fact, said golf courses can draw potential players from miles away, not simply from the homes around the fairways, greens and the notorious 19th hole.

To get its results, the FAU survey studied more than 10,000 transactions from properties in Florida’s three southernmost counties, Miami-Dade, Broward and Palm Beach, that sold and closed in 2015.

Dr. Johnson pointed out that homes considered for the study were located “adjacent to golf course properties.” The report did not include those situated inside so-called “golfing communities” that require homeowners to pay a mandatory golf membership fee.

“This is a great idea for an extension of the paper,” he said. “But needed data is not yet available.”

Picking up on Bogany’s comment, Dr. Johnson said: “The study has multiple controls for location. Thus, ‘affluent neighborhoods’ are accounted for in the pricing model.”

Shad Bogany

Shad Bogany

To back up his comment, Bogany noted that a golf course in Missouri City, Texas, near his home, was closed because it was not adequately maintained. “The city stepped in to keep the prices of the houses up.” When the municipality made improvements to the course, he said, home values “went up 10 to 20%.”

About 50 miles north of Houston’s Galleria, in Montgomery County, is the Woodforest Development, which has a 27-hole course on site. “I would definitely say that it adds value, it makes us a destination location, with different prices and different zones,” said Virgil Yoakum, who is with Johnson Development Corporation and is general manager and vice president of master-planned communities Woodforest and the new Grand Central Park, 3,000- and 2,000-acre developments, respectively.

“We do not own the golf course, we own the real estate,” he said. “Having a golf course adds value to the community.” It’s a public course, with a new 10,000-square-foot clubhouse that opened just a few years ago. Memberships are available, but golfers can also pay one-day-only fees.

The course, said Yoakum, “is an enormous benefit. It generates 45,000 to 50,000 rounds of golf a year.”

Only Houston real estate professional David Jarvis, senior vice president of John Burns Real Estate Consulting, found “zero” connection between increased home values and nearby golf courses.

“It’s interesting,” Jarvis mused. “We have an aging population, yet people don’t want to play golf. It’s an interesting demographic shift. I don’t play golf. I tried. I didn’t like it.”

“You couldn’t give me a home in a golf course community,” he added.

Texas, like Florida, “is over-golfed,” Jarvis said.  With respect to that comment, he seems to agree with the FAU study which noted that “more than 800 golf courses closed in the United States in the last decade. Residents, developers and municipal officials around the country are facing decisions on whether to convert underperforming golf properties to housing developments or keep them as golfing communities.”

In South Florida, Johnson acknowledged there are many golf courses trying to decide whether to continue or not in the face of failing financial performance. Many golf properties are declining into a state of repair that could negatively impact adjacent property values.

On the other hand, says the report, the remaining demand for golf and being adjacent to courses could create a market scenario that could actually add a premium to property value, on average.

“Uncertainty over value destroys deals, and these findings reduce that uncertainty and should result in quicker resolutions one way or another.”

March 8, 2017 Realty News Report Copyright 2017

One comment

  1. In Houston, Harris County Flood Control looks at golf courses as ideal detention ponds. Golf is now DOA….Tiger Woods has left the building.

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