Knocked flat by the Great Recession, the retirement and second home golf course real estate market across the Triangle and North Carolina is finally coming back to life.
For proof, look no further than St. James Plantation, the 6,000-acre golf and marina community near Southport, which has attracted approximately $50 million in new home construction since the start of 2013 – levels last seen in the booming market of the early 2000s.
Construction at St. James, which boasts 81 holes of golf, has been propelled by a steady flow of retirees from the Northeast and the Washington, D.C., area. However, now a lot of its new blood is coming from a little closer to home.
“We’re starting to invest more marketing dollars in North Carolina, especially Raleigh and the Triangle,” says St. James marketing director Katie Campbell. “In fact, we’re coming to Raleigh this coming January for the first time to do a real estate show. We think it’s going to be a really good market for us.”
When the economy took a turn for the worse, St. James had to make adjustments. As pre-retirees looked at their finances, it made sense to tweak some of the home offerings.
“We’ve had to get a little more creative,” Campbell says. “With the economic turn, a lot of people’s portfolios were affected. Their retirement saving they had worked so hard for took a hit.”
St. James Plantation wasn’t the only golf course community to rethink its marketing plan. After all, many people seeking golf course real estate are looking for second homes. That sort of purchase can be put off indefinitely. But the other reality is just as important: it is a clientele with money.
“So we created some offerings for folks who at one time thought they were going to build a 4,000-square-foot house that would house all their family when they came to visit,” Campbell says. “(Another option is) a house that is 2,500 square feet that is maybe a little more low maintenance. We’ve had to correct a little bit that way for the market, and it’s been successful for us.”
In the first half of 2013, St. James Plantation made 154 transactions on new homes and lots, totaling more than $27 million in sales. Compared to the first half of 2012, that marks an 11 percent increase in sales of home sites and a 30 percent increase in sales figures.
Back in the spring, Mountain Air sales broker Becky Stiles was working with a couple that loved her Blue Ridge Mountains community outside of Burnsville. When the couple called about an available condominium, they were ready to jump in with two feet.
“The people were so excited,” Stiles says. “I was on the phone, crawling around measuring – where the bed could go, where the couch could go, whether the dining room set would fit. I sold a condo sight unseen.”
Such optimistic tales in the residential real estate market are becoming more familiar. But many golf course communities survived the economic downturn better than other communities. That’s a built-in strength of golf real estate. With an affluent base of buyers, many communities managed to skirt some of the economic woes.
“The market downturn certainly affected second-home communities,” Stiles says. “Pricing has adjusted, but we had very little foreclosures at Mountain Air. When a few foreclosures hit the market, they were gobbled up by existing property owners. But things have not plummeted here.”
The same is true at Glen Laurel, the Clayton community that winds through The Neuse Golf Club. Back in 2000, developers built 50 new custom homes. Recent times have picked up, and careful planning allowed Glen Laurel to maintain the integrity of the community.
“When the economy turned, so many (neighborhoods) brought in production builders,” says Judy Kluczykowski, a Glen Laurel sales rep. “These developers didn’t do that. We have the same developers who came in here 20 years ago. They continue to put money into it with expansion and upgrades of the neighborhood.”
Glen Laurel recently finished 18 custom build over the past 18 months. They plan to release another 20 lots in September. The modest pace to the build out has helped avoid the pitfalls experienced in other neighborhoods.
“They didn’t put as many lots on the ground because they didn’t want it to look like one of these ghost town neighborhoods where they put 100 lots out and no one was building,” Kluczykowski says.
Chapel Ridge, located outside of Pittsboro, is rebounding from some tough blows dealt during the recession. Years ago, local realtor Sam Petrides sold nearly $10 million worth of inventory at Chapel Ridge. It was easy work.
“It has absolutely the prettiest views in the Triangle – no ifs, ands or buts,” Petrides says.
But the 1,000-acre golf community took some lumps along the way.
“Bluegreen (Communities) asked for 0 percent down – interest only for three years,” says Petrides, who now works for Windjam Properties. “They were able to sell 600 lots in about three years, and those directly to people who were going to retire, people who bought for investment. Some people bought two or three lots.”
When the economy turned and the interest came due, troubles followed.
“The 20 spec houses went under,” Petrides said. “They couldn’t sell them. Lots went under. It just crashed.”
Purchased by SouthStar Communities in 2012, Chapel Ridge is poised for better days ahead.
“It’s clean. All we need are homes to get going and everything will work out positively,” Petrides says. “There are 803 total lots, with 160 built on. We’re getting calls all the time asking for builders. People’s timing just changed, that’s it.”
Most of that timing is due to a better economy and improved consumer confidence. But there is a certain intangible that comes with communities that build an identity around golf course.
“It’s huge, even for people who don’t golf,” Kluczykowski says. “Sometimes it’s just a status thing – or they just like the view. There are a lot of people who don’t golf and they want a property with a golf course view because they know it’s going to help their resale value when they go to sell.”
Meanwhile, Stiles is still on her toes at Mountain Air. The couple who had her crawling on her hands and knees closed on their condo recently, and the requests keep coming.
“They’re so excited,” she says. “They’re like little kids. I get probably two calls a day from either him or her.”