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Golf course communities were established in the mid-1920s, but gained momentum in the ’70s and ’80s, when developers capitalized on the popularity of golf at a time when many Americans were happy to pay large premiums for a golf course home. However, golf communities are now far less desirable than they were thirty years ago. In the article “The Rise and Fall of Golf Club Communities Could Mean Big Bucks for Homebuilders,” Bisnow turned to Steven Werth to provide insight on this trend.
“The problem is that developers sometimes build golf courses to sell houses with golf course views, and not to create a profitable long-term golf course,” Mr. Werth said. “The golf course premium that a homebuyer pays to be near a golf course may be too high, given the high-risk nature of the golf course business in that revenue structure.”
In the past, golf course-adjacent homeowners paid a monthly fee in exchange for course membership and added privileges. In turn, these fees paid for the course’s upkeep. However, as Mr. Werth pointed out, the declining popularity of golf means that many homebuyers no longer feel that extra membership fees are worthwhile. The sport’s lack of popularity, coupled with an overabundance of golf courses, has caused the demand for golfing community homes to plummet.