Wall Street Journal says golf communities are dying

[toehold57]

Too many built and golf does not carry enough weight with the young folk to keep all these courses alive. The result? The surrounding housing is suffering.

 

https://www.wsj.com/articles/golf-home-owners-find-themselves-in-a-hole-11547135191

 

 

 

Sent from my iPad using MyGolfSpy

[cksurfdude]

Didn't read the whole article yet, but it is an interesting topic. I personally prefer to play on courses not surrounded by houses and in a more open, natural setting.

But I have wondered about the proliferation / possible over-development of these kinds of golf communities, the economics required to sustain themselves and their longevity...

[sixcat]

Nothing at all surprising within the article.  Virtually everything in modern society has been centered around profit, especially in the US.  Developers took advantage and developed all-inclusive communities to be sold at a premium. 

I still contend, golf overbuilt beginning in the decade of excess (the 80's) through the "Tiger boom" years.  The market is simply reverting back to a more sustainable and healthy level.  Besides, less crowded golf courses and fewer golfers who have seen too many "Jackass" episodes is just fine with me!

[Mr. 82]

The examples they are citing in the article are in the 1/10th of 1% of income levels in the USA.  One condo community in Boca Raton cited a course that required a $70,000 initiation and $1,000 a month golf course membership just to buy a condo there.  And they said that all their prospective buyers had a net worth of over $1 million. 

I mean, come on, if that's your example that you are using to prove a point that golf course communities are dying, please, give me a break.  That sort of emotional BS, based on an example so small in demographics as to be absurd, just to write an article, is 10 minutes of my life I'll never get back.

My point being that the article is unrealistic, and brings conclusions that mean nothing to a guy making $40k a year.  And yeah, if you are pointing at real estate and golf courses that I could never afford (or the vast majority of people reading anything on MGS), then sure, tug at my heart strings.  But as it is, it's just absurd at the minimum, and comical at best.

[PlaidJacket]

50 minutes ago, sixcat said:

Nothing at all surprising within the article.  Virtually everything in modern society has been centered around profit, especially in the US.  Developers took advantage and developed all-inclusive communities to be sold at a premium. 

I couldn't read the article as it's behind a paywall. For me anyway. But I can imagine what it's about just by reading a few comments above.

First I'd say unless you run a non-profit (who depend on other peoples profit) you'd better have your business centered around profit. Otherwise you'll be out of business. But fast! Not sure what the developers took advantage of exactly. I do however believe they saw and opportunity which most business do and ran with it. Some for better and others for worse. That's different from taking advantage. I agree that golf was overbuilt and nobody has to contend they think that's what happened. It's an old cold hard fact that golf overbuilt. I agree that golf has shrunk and rightly so. But I also think it's healthy. For some.

Think about it. Making a Profit is a good thing. I know I sure enjoy it. Otherwise there is no MGS for example. No electricity, no grocery stores, no Starbucks (bucks - get it?), no golf clubs, no golf courses and on and on.

 

[cksurfdude]

Here's a link to a PDF copy of that article, for those who care to read it but cannot access it ...

https://drive.google.com/file/d/1qaKwGWPi5f5bp5j9ePQWZ4oNk0DdpsEZ/view?usp=drivesdk

 

[sixcat]

2 minutes ago, PlaidJacket said:

I couldn't read the article as it's behind a paywall. For me anyway. But I can imagine what it's about just by reading a few comments above.

First I'd say unless you run a non-profit (who depend on other peoples profit) you'd better have your business centered around profit. Otherwise you'll be out of business. But fast! Not sure what the developers took advantage of exactly. I do however believe they saw and opportunity which most business do and ran with it. Some for better and others for worse. That's different from taking advantage. I agree that golf was overbuilt and nobody has to contend they think that's what happened. It's an old cold hard fact that golf overbuilt. I agree that golf has shrunk and rightly so. But I also think it's healthy. For some.

Think about it. Making a Profit is a good thing. I know I sure enjoy it. Otherwise there is no MGS for example. No electricity, no grocery stores, no Starbucks (bucks - get it?), no golf clubs, no golf courses and on and on.

 

Profit is one thing, the never-ending chase for more is an altogether different thing.  I was simply stating, as a society, we are conditioned to never be satisfied.  When is enough, enough?  Whether developers "took advantage" or "saw an opportunity", it's semantics, really.  One and the same.  They took advantage of opportunities they had.

As I have stated in another thread, my home club is not-for-profit.  The club makes more than enough "revenue" to fully sustain itself with everything left over going back into capital improvement.  Most golf facilities aren't set up that way anymore.  When revenues dip, the bottom line isn't what's being adjusted.  It's usually the condition of the golf course that suffers.

[Kenny B]

1 hour ago, sixcat said:

Nothing at all surprising within the article.  Virtually everything in modern society has been centered around profit, especially in the US.  Developers took advantage and developed all-inclusive communities to be sold at a premium. 

I still contend, golf overbuilt beginning in the decade of excess (the 80's) through the "Tiger boom" years.  The market is simply reverting back to a more sustainable and healthy level.  Besides, less crowded golf courses and fewer golfers who have seen too many "Jackass" episodes is just fine with me!

It's an interesting article, and I agree completely with your assessment.  

I have played two of the courses mentioned in the article.  The Coffee Creek course in Edmond, OK was not a private CC, and I was surprised when I heard that they closed.  My previous swing coach had a golf school there; he has moved to another course in the area..  I played the Kensington G&CC in Naples, FL several times before all of the houses were built around it.  An excellent course, but I could see that it was going to be very expensive to live and play there.  I'm not surprised that as people in that gated community give up golf for whatever reason, the course will suffer.  We had one country club in my area that had to go semi-private to get enough revenue to keep their members happy with the dues.  Our one private CC does not have a problem, but membership is not constrained (nor ever has been) by living in the community.  Anyone living anywhere can join.  They limit the number of memberships, and you pay a fee to join (last I knew it was $5k but that was years ago), and if you want to join you bought your membership from someone on the list wanting to sell their membership; First in-First out.

[sixcat]

I don't know why I feel compelled to expound on this but here goes!

Our first child was born in 2005.  My wife and I were over 30 and had been engulfed in the "rat-race" since leaving college.  We weren't sure we would ever have kids until we were surprised with the news on the morning of the closing of our first home that the "stomach bug" my wife thought she had was in fact, a baby.  The next two years were miserable.  We had climbed the corporate ladder, bought a piece of the idyllic "American dream" in the shape of a 4,000 square foot idyllic home in the idyllic neighborhood in the idyllic large city.  We both worked for giants of our chosen professions and were making excellent money.  And we were miserable!  

We were paying the equivalent of a mortgage payment for the convenience of having someone else raise our child .  We took the textbook definition of a "leap of faith" and sold our home, quit our jobs and moved to our hometown in rural southwest Virginia.  Population 8,000 and declining!  By the way, my former job came with a corporate golf membership.  I could play all the golf I wanted without ever having to spend a dime.  But who had time?!?!?  I was working 14 hour days with the occasional day off every few weeks.

As luck/fate/chance would have it, an older gentleman had just started an AE firm on Main Street in our hometown and hired me with a few caveats. My salary would be 12k less than my previous position!  We would build this company together by putting family first.  We would do quality design work at a fair and reasonable rate with the understanding, our employees will rarely (if ever) work more than 40 hours per week.  It turns out, our clients love us for the concept.  We have experienced measurable growth every year since we opened.  What started with 5 people in one cramped little office is now 45 people spread across three offices.  Our footprint extends into 5 states and we still do not work overtime!  My wife gave up even more than I did.  She lost about 15k in salary along with a company car and credit card.

Life in general has slowed down for us and we love it.  We own our home, outright.  Our kids attend a great school system with fewer than 1,200 students from grades PreK-12.  I play golf virtually every afternoon and most of every weekend.  I can't recall the last time my house, car doors or garage door has been locked.  We went on a 7 day vacation last March.  Our house stayed unlocked the whole time.  Our neighbors went into our unlocked (attached) garage and took our trash out, returning the cans after the trash ran.  A neighbor has plowed every driveway in our neighborhood with a tractor every time it has snowed and has never asked for anything in return.  

My point is, we are conditioned by society to believe we never have enough.  We must have more of everything.  Man, does living this life feel freeing not worrying about such nonsense!  My home club is just a microcosm of the overall region where we live. 

We couldn't be happier with less.

[tony@CIC]

We had a personal experience over 15 years ago in North Carolina on the Neuse River. This was a combined Golf and Marina community. We purchased a waterfront lot in anticipation of retiring there . The development consisted of a combination of older homes built in the early 70's and newer homes that were recently built. The course was owned by the HOA and  services outsourced to a 3rd party (maint, grounds, etc). The course fell into disrepair and shortly after we purchased, there  were 2 factions suing each other because the retirees didn't want the upgrades to the course and facilities and the newer home owners did.  Several hundred thousand dollars were spent in legal fees plus the ill will developed between neighbors. Fortunately we were able to sell our property at a slight profit before this came to a conclusion. Definitely a lesson learned for me.

This article resonates with me since we are currently in the process of searching for property in Fl to use during the winter. I'm using that lesson to ensure that we're not locked into a Club or course.  

 

 

[sixcat]

18 minutes ago, tony@CIC said:

We had a personal experience over 15 years ago in North Carolina on the Neuse River. This was a combined Golf and Marina community. We purchased a waterfront lot in anticipation of retiring there . The development consisted of a combination of older homes built in the early 70's and newer homes that were recently built. The course was owned by the HOA and  services outsourced to a 3rd party (maint, grounds, etc). The course fell into disrepair and shortly after we purchased, there  were 2 factions suing each other because the retirees didn't want the upgrades to the course and facilities and the newer home owners did.  Several hundred thousand dollars were spent in legal fees plus the ill will developed between neighbors. Fortunately we were able to sell our property at a slight profit before this came to a conclusion. Definitely a lesson learned for me.

This article resonates with me since we are currently in the process of searching for property in Fl to use during the winter. I'm using that lesson to ensure that we're not locked into a Club or course.  

 

 

I had two former coworkers at my former employer take a transfer to the Raleigh area in 1999-2000 time frame.  They both bought condos on a golf course on the Neuse River that ended up in disrepair and in court several times.  I forget the name of the place but it has to be the same as your experience. 

I used to go down and play some golf with them but haven't in years.  One is still there.  The other has since moved out of the area.

[tony@CIC]

1 hour ago, sixcat said:

I had two former coworkers at my former employer take a transfer to the Raleigh area in 1999-2000 time frame.  They both bought condos on a golf course on the Neuse River that ended up in disrepair and in court several times.  I forget the name of the place but it has to be the same as your experience. 

I used to go down and play some golf with them but haven't in years.  One is still there.  The other has since moved out of the area.

Fairfield Harbour? Southeast of New Bern about 30 min.

[sixcat]

28 minutes ago, tony@CIC said:

Fairfield Harbour? Southeast of New Bern about 30 min.

Not the same place.  This place was just east of Raleigh.

[cksurfdude]

5 hours ago, sixcat said:

I don't know why I feel compelled to expound on this but here goes!

Our first child was born in 2005.  My wife and I were over 30 and had been engulfed in the "rat-race" since leaving college.  We weren't sure we would ever have kids until we were surprised with the news on the morning of the closing of our first home that the "stomach bug" my wife thought she had was in fact, a baby.  The next two years were miserable.  We had climbed the corporate ladder, bought a piece of the idyllic "American dream" in the shape of a 4,000 square foot idyllic home in the idyllic neighborhood in the idyllic large city.  We both worked for giants of our chosen professions and were making excellent money.  And we were miserable!  

We were paying the equivalent of a mortgage payment for the convenience of having someone else raise our child .  We took the textbook definition of a "leap of faith" and sold our home, quit our jobs and moved to our hometown in rural southwest Virginia.  Population 8,000 and declining!  By the way, my former job came with a corporate golf membership.  I could play all the golf I wanted without ever having to spend a dime.  But who had time?!?!?  I was working 14 hour days with the occasional day off every few weeks.

As luck/fate/chance would have it, an older gentleman had just started an AE firm on Main Street in our hometown and hired me with a few caveats. My salary would be 12k less than my previous position!  We would build this company together by putting family first.  We would do quality design work at a fair and reasonable rate with the understanding, our employees will rarely (if ever) work more than 40 hours per week.  It turns out, our clients love us for the concept.  We have experienced measurable growth every year since we opened.  What started with 5 people in one cramped little office is now 45 people spread across three offices.  Our footprint extends into 5 states and we still do not work overtime!  My wife gave up even more than I did.  She lost about 15k in salary along with a company car and credit card.

Life in general has slowed down for us and we love it.  We own our home, outright.  Our kids attend a great school system with fewer than 1,200 students from grades PreK-12.  I play golf virtually every afternoon and most of every weekend.  I can't recall the last time my house, car doors or garage door has been locked.  We went on a 7 day vacation last March.  Our house stayed unlocked the whole time.  Our neighbors went into our unlocked (attached) garage and took our trash out, returning the cans after the trash ran.  A neighbor has plowed every driveway in our neighborhood with a tractor every time it has snowed and has never asked for anything in return.  

My point is, we are conditioned by society to believe we never have enough.  We must have more of everything.  Man, does living this life feel freeing not worrying about such nonsense!  My home club is just a microcosm of the overall region where we live. 

We couldn't be happier with less.

I'm moving to Virginia :-)

[fixyurdivot]

On 1/13/2019 at 5:01 PM, toehold57 said:

 

Too many built and golf does not carry enough weight with the young folk to keep all these courses alive. The result? The surrounding housing is suffering.

 

https://www.wsj.com/articles/golf-home-owners-find-themselves-in-a-hole-11547135191

 

 

 

Sent from my iPad using MyGolfSpy

 

Thanks for the article.  This very issue has been on my mind as my wife and I have been considering buying a home in a 55+ planned community.  With more golf courses closing than opening, and golf play declining overall, it stands to reason that these golf courses are struggling to stay afloat. I'm noticing that a number of the 55+ communities are revising their by-laws to allow for a percentage of younger age residents.  The demographics are changing quick and they have to change to survive financially.  A number of on-line reviews about various communities speak to the demise of golf course quality - i.e., was once a gem, now not so much.

While I like the idea of having a "home course", I also tend to get bored playing the same course over and over.  Like the plush recreation centers, the golf course costs have to be covered one way or another - and this will likely mean higher HOA dues.  This issue has definitely got my attention as we look into potential retirement communities.  

Here's another article on this topic.

https://www.bisnow.com/national/news/construction-development/developers-are-making-big-bucks-off-once-thriving-golf-courses-73058

[sixcat]

12 hours ago, cksurfdude said:

I'm moving to Virginia :-)

Boy, I painted with rose colored glasses yesterday morning.  

We're not perfect.  I think I mentioned about a year ago, some kids were vandalizing properties with their trucks.  The update to that is, it turned out to be the kids of longtime police and firefighters.  The November election saw four of the seven City Council seats on the ballot.  All four incumbents were thoroughly trounced.  Almost immediately afterward, the police chief and fire chief resigned along with three other key positions around town suspected of some minor corruption.

Jobs and other key essentials are few and far between.  My wife and I are fortunate to be able to do what we do here.  It's not common!  A lot of professional services like doctors, dentists and optometrists are not top quality.  Which is why my family travels an hour for those services.  It's difficult to get people to want to come to a rural area to provide professional services.  They see everything the area doesn't have rather than what we have in abundance.  About 60% of the local population (8,000 city/45,000 county) are associated with some sort of farming.  Whether farmers themselves or in direct support of farming. 

To give you an example, we hired a civil engineer from Raleigh a few years ago.  He and his wife moved here and began to settle into the community.  As time went on, they had their first child and we noticed his wife becoming more and more distant.  After only being here for two years, they moved to Atlanta and we were searching.......again...... for another professional engineer.

 

[TR1PTIK]

I certainly think the author may have cherry picked the "data" used for the article, but even assuming that this were the case across the board, I'm not surprised. With fewer people currently picking up the game, there's a greater likelihood home buyers would view a golf course in their backyard as a nuisance rather than a perk. I listened the No Laying Up podcast yesterday and they had a decent take on it.

[bens197]

The examples they are citing in the article are in the 1/10th of 1% of income levels in the USA.  One condo community in Boca Raton cited a course that required a $70,000 initiation and $1,000 a month golf course membership just to buy a condo there.  And they said that all their prospective buyers had a net worth of over $1 million. 
I mean, come on, if that's your example that you are using to prove a point that golf course communities are dying, please, give me a break.  That sort of emotional BS, based on an example so small in demographics as to be absurd, just to write an article, is 10 minutes of my life I'll never get back.
My point being that the article is unrealistic, and brings conclusions that mean nothing to a guy making $40k a year.  And yeah, if you are pointing at real estate and golf courses that I could never afford (or the vast majority of people reading anything on MGS), then sure, tug at my heart strings.  But as it is, it's just absurd at the minimum, and comical at best.

Boca / Delray definitely has their hold on these properties. I lived in Jupiter for 9 years and Northern PBC has at least half a dozen elite club that cost $200k just to get in and are $1k a month. To your point, you’re right, many of us can’t relate unless we’ve seen it first hand.

Inherited wealth could keep them afloat but I do think there is some truth to this. Married couples are having fewer kids and Gen Y/Z are less interested in social activities like golf...yes I know that’s painting with a broad brush but think about it. The family structure was designed for the men to work, entertain and be social and the wives to care for the home. It’s shifted and golf participation as a whole just isn’t what it was. Besides, portions of Florida may be underwater in 50-100 years from now.

To your point, the author “journalist” is just using identity politics to trigger a response.

[sixcat]

5 minutes ago, bens197 said:

Boca / Delray definitely has their hold on these properties. I lived in Jupiter for 9 years and Northern PBC has at least half a dozen elite club that cost $200k just to get in and are $1k a month. To your point, you’re right, many of us can’t relate unless we’ve seen it first hand.

Inherited wealth could keep them afloat but I do think there is some truth to this. Married couples are having fewer kids and Gen Y/Z are less interested in social activities like golf...yes I know that’s painting with a broad brush but think about it. The family structure was designed for the men to work, entertain and be social and the wives to care for the home. It’s shifted and golf participation as a whole just isn’t what it was. Besides, portions of Florida may be underwater in 50-100 years from now.

To your point, the author “journalist” is just using identity politics to trigger a response.

 

I try to be careful painting with a broad brush but every generation definitely has trademarks that are very easily identifiable.  Millennials are the largest percentage of wage earners in the world yet, buy homes at a shockingly lower clip than previous generations.  Millennials are far more likely to live in urban areas, not own a vehicle, not own a home, not be married and not have children than any previous generation.  Each of those things directly affects the others and indirectly affects the golf industry.

[bens197]

I try to be careful painting with a broad brush but every generation definitely has trademarks that are very easily identifiable.  Millennials are the largest percentage of wage earners in the world yet, buy homes at a shockingly lower clip than previous generations.  Millennials are far more likely to live in urban areas, not own a vehicle, not own a home, not be married and not have children than any previous generation.  Each of those things directly affects the others and indirectly affects the golf industry.

 

I agree. It has a lot to do with inflation, flat wages, debt obligations and buying power. While they’re the largest group of wage earners they’re also shouldered with debt from school and credit card usage.

 

The generations dying out we’re taught to spend what they had, save first and live within their means. Who’s to know what will happen when Millennials are set to retire?

[Mr. 82]

8 minutes ago, bens197 said:

The generations dying out we’re taught to spend what they had, save first and live within their means. Who’s to know what will happen when Millennials are set to retire?

I'd learn Mandarin if I were a Millenial.  Either that or Spanish.

Not going to make this political, but with declining birth rates here, and abundant births south of the border and in Asia, just do the simple math.

[bens197]

I'd learn Mandarin if I were a Millenial.  Either that or Spanish.
Not going to make this political, but with declining birth rates here, and abundant births south of the border and in Asia, just do the simple math.

You did, but that’s ok

Have a good day.

[sixcat]

16 minutes ago, bens197 said:

I agree. It has a lot to do with inflation, flat wages, debt obligations and buying power. While they’re the largest group of wage earners they’re also shouldered with debt from school and credit card usage.

The generations dying out we’re taught to spend what they had, save first and live within their means. Who’s to know what will happen when Millennials are set to retire?

To an extent, I think some are assigning whatever meaning they want to the data being collected.  Sort of a "strawman" argument the No Laying Up guys mentioned.  If golf courses are closing, golf must be dying, right?  If golf is dying, millennials must not be playing, right?  If the next generations refuse to play, golf will eventually die, right?  As the NLU guys said, chicken versus egg.

I've never had a desire to play golf courses built in and around neighborhoods.  I don't want to play from someone's back yard.  Courses built that way have some unique traits in common.  They are usually unimaginative, difficult to walk and built on land left over after homes, streets and infrastructure were laid out.  

[sixcat]

8 minutes ago, GSwag said:

I'd learn Mandarin if I were a Millenial.  Either that or Spanish.

Not going to make this political, but with declining birth rates here, and abundant births south of the border and in Asia, just do the simple math.

Not to mention the amount of national debt we own Asia!  And we wonder where millennials learn it from!

[fixyurdivot]

Here is an article about this from 2009.

http://gotoby.com/news/article/763/Future-Developers-will-Build-Fewer-Golf-centered-Communities

And another from 2016, whose author spoke about and predicted these same problems back in 1999.

https://www.cnu.org/publicsquare/2016/08/25/struggles-‘golf-course-communities’-and-foresight-new-urbanism

While outwardly, most of the Del Webb, Trilogy, Robson, etc. developments here in AZ seem to be prospering, who really knows by how much?  Presuming a perspective buyer can review the HOA's financials, would you be able to answer this question?  You are not likely to get an honest read from the sales office, local realtors, or residents.  These communities tend to have a pretty high turnover (house sales volume), but that stands to reason due to age group - so this isn't necessarily a good indicator.  I think as a going in position, one would be smart to ask themselves if they'd be OK paying HOA dues 2x the current rate at some point over their period of ownership.  Definitely lots to consider. 

[SteddyGolf]

For the most part the large majority of those who play golf regularly have or are well on their way to building a measured amount of financial freedom. We have discussed the rising cost of Golf on this forum many times and those discussion have led to some pretty heated exchanges of thoughts and ideas. There is always a contingent of folks who state Golf can be played on the cheap. I would argue the word cheap is relative and directly related to one’s level of disposable income. A soda is cheap if you have a $1 in your pocket.

 

A very recent Army retiree, I joined my first Gym in 31 years last week. I was extremely surprised I could play basketball, racquetball, run, ride the bike, lift weights and swim all for $15 a month. Researching a Golf membership the best deal I could find was a group of 7 courses for $300 a year plus $39.00 each round. If I play just 4 times a month that comes out to about $181 a month for four rounds of Golf. The gym membership is unlimited access 7 days a week at no additional charge.

 

When a Golf Course closes its because of one of two reason; the owners feel they can make more money in another market or the course is actually losing money. Nothing more than conjecture on my part but I would guess golf course closure is more related to losing money than it is to profit margins.

 

Back to my original point......Golf takes money, time and “won’t to”. Often times you must have the first two to even get to the “want to”. As money and time become less available the “want to” never comes into sight.

 

The last thing I’ll say is Golf is hard! Equipment might be better than its ever been but Golf is still crazy hard. For many folks it seems impossible and when measuring the cost to benefit ratio they just would rather join their local gym for $15 a month.

 

 

 

 

Sent from my iPhone using MyGolfSpy

 

[revkev]

Nothing at all surprising within the article.  Virtually everything in modern society has been centered around profit, especially in the US.  Developers took advantage and developed all-inclusive communities to be sold at a premium. 
I still contend, golf overbuilt beginning in the decade of excess (the 80's) through the "Tiger boom" years.  The market is simply reverting back to a more sustainable and healthy level.  Besides, less crowded golf courses and fewer golfers who have seen too many "Jackass" episodes is just fine with me!

I’ve followed the thread and must say that I died laughing at the “seen too many ‘Jackass’ episodes” remark cited here.

I’m in the camp that also sees this is a normal leveling off within the golf industry. Think for a bit about the courses that are closing. For the most part they are newer nondescript layouts and or else older places that weren’t well run and/or found themselves in changing neighborhoods. They were surplus stock quite frankly.

Interestingly too I have recently counseled a number of young couples who value a lifestyle that Sixcat articulated. They aren’t anti-capitalists but are seeking a balance between career, family and personal time where career is the stepping stone for the first two.

Good topic - I’m not as concerned about Golf’s demise as others seem to be. There are plenty of young people on courses in my area. Plenty enough junior golfers in Florida to keep the sport alive for the next generation even if not at Tiger boom numbers. That was never sustainable IMO.


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