Background:
Eastpointe Country Club is experiencing significant challenges. The pandemic is over and the golf industry is slowly returning to a similar market as pre-pandemic. There is an overabundance of clubs with fierce competition for the limited number of golf players available. In 2016 a nationwide survey of Golf clubs found that an average of 150 golf clubs fail a year. In Broward County there are 45 clubs and 5 have recently closed. In Miami Dade 37 courses closed over the last 5 years. Palm Beach County, home to more private golf courses than any other county in the United States, had 17 closed or are failing or closing/ being sold off for redevelopment.
Failing Country Clubs Cause Property Prices To Plummet
So, while property prices in Golf communities are higher than surrounding communities when the Golf Club is healthy, prices are negatively impacted when the clubs are financially in trouble. When clubs fail and/or close, the integrity of the neighborhood is at stake. It is well documented that as private clubs begin to fail and revenue begins to decline, ineffective Club Boards raise annual fees, start cutting costs and the condition of the course becomes shabby, and members decide to quit (Raeke 2003). This process, whether it be as a result of existing members participating and spending less at their clubs, members stepping down their membership category to lower dues paying levels, or members resigning from their clubs, places a greater share of financial pressure on the diminishing number of members who remain at their clubs.
Having said that, when fairways become overgrown and club facilities deteriorate because of lack of maintenance, property values plummet. Real estate agents stop bringing clients into these communities and homes are on the market for much longer periods of times. More homes go into foreclosure and more short sells occur, while overall prices drop. We experienced this same problem in Eastpointe where a combination of the Great Recession and a problem with Golf and Racket Club failing, drove prices down, resulting in many foreclosures and short sells, longer time on the market, and significantly reduced real estate prices.
The Bottomline is: The club must be saved to avoid a community financial disaster.
Please read these different articles all detailing the negative impact on real estate prices of a failing club:
An article in Golf Mark Magazine, 27 Jan, 2017, titled “Failing Golf Courses are killing property values” discusses the disaster associated with failing community golf courses and the negative effect on residential property values - beginning from the rumor itself. It can be a domino-effect because falling home prices lowers assessments, which lowers property taxes collected by local counties and cities. So, how much will home prices be affected by a golf course closing? Information, stated in the article, details impacts from $20 per foot to almost 40% of appraised value. For instance, when a popular golf course in Florida (Ravens Golf Course Jacksonville, Fl) closed the residents reported an immediate $20.00 per square foot drop in home prices. Real estate agents will tell you, "Even the hint of the uncertainty of the future of the golf course can be a deal-killer!"
The Orlando Sentinel, dated 2 May 2015, in an article titled “Property Values plummets as golf courses close in Central Florida”, discusses the impacts of closed golf clubs using several real examples (Orlando Golf Club, Rock Springs Ridge, etc.) and what happens when a club closes to the surrounding community. The results are unkept and overgrown grass and fairways, facilities deteriorate and become an eyesore, and vagrants move in. The net result in each community was a deep reduction of property values up to 30% and more.
Another article in Golfmark continues the same theme of dramatic reduction of property prices when a club fails. See the article on the attached link – http://www.golfmak.com/golf%20course%20closings%20affect%20on%20neighborhoods.html
https://www.linkedin.com/.../failing-golf-courses-killing-property-values-michael-a-m...
Jan 27, 2017 - Please pass this on to anyone you know who owns property in a golf course residential development. There's a link at the end of this posting that must be viewed. It shows how a golf course closure in Florida knocked $24 million off the value of its neighborhood. The disaster associated with failing ...
https://www.clickorlando.com/.../property-values-plummet-as-golf-courses-close-in-ce...
May 2, 2015 - In its prime, Lake Orlando Golf Club had manicured greens, magnificent views over lakes and majestic cypress trees. That's a far cry from what it's like no
https://arrowcreek411.com/.../analysis-of-golf-course-closure-impacts-on-home-sales-...
Jun 9, 2015 - Brian Bonnenfant, Project Manager for the Center for Regional Studies, College of Business at the University of Nevada, Reno (UNR), was commissioned by The Concerned Neighbors of ArrowCreek (CNA) to do the Analysis of Golf Course Closure Impacts on Home Sales Price Trends study and report.