Life & Then Golf – What’s After
Something I've always noticed about the golf world is the often inflated level of importance we place on our beloved pastime. While nobody (I hope) would argue that times like these call for altered priorities and perspective, it's certainly legitimate to wonder what's ahead, both in life and golf.
Pilots are taught to "stay ahead of the airplane" and it's abundantly clear that we got behind the airplane with respect to the Coronavirus Pandemic. What's ahead long term for our society and our game/business?
Some of the questions I've considered include:
What changes will result in our social interaction?
Will shaking hands & hugs become a thing of the past?
Will eating and drinking out decline?
Will working remotely become the norm?
Will improvements in crisis preparation and management occur?
What industry(is) will likely benefit or suffer long term as a result?
Commercial (office and retail) Real Estate?
How will the value of all types of real estate be impacted?
That brings us to golf. We've been inundated with articles in the past week about the virtues of golf related to social distancing and there have been numerous practices introduced to enhance same. Compared to most other sports, golf allows for social distancing quite favorably. We play in wide-open spaces, we can walk or take individual carts and we don't really have to touch others' equipment or any non-personal elements. My sister suggested tennis as an acceptable alternative, however like basketball, football and baseball, multiple players have occasion to frequently handle the same ball. Not so in golf.
It's been suggested that the ancient game offers a unique level of safety in the age of COVID-19. I'm interested whether that will translate to potential growth in participation and economic success for golf courses and clubs.
Long term, will golf gain favor among those seeking an outdoor activity that offers such safety as the lasting impacts of this global experience changes our habits?
Predicting the future of golf property values is an even more challenging question. Interest rates should (at least temporarily) decline making financing cheaper. That would positively impact values. It also stands to reason that the forced closures of courses/clubs already in distress before the crisis would equalize the supply/demand balance in favor of the survivors.
I'm not making a prediction here that values will increase, but depending on how things shake out, it's possible, at least in some cases. In estimating golf property values (appraisals) we will be cautious not to react in a knee-jerk way to the crisis and recent economic events, however we will continue to observe market factors to determine the more long-term impact of recent events. After 9/11 we practiced a similar approach because the market value of real estate is based on the presumption of a sale with neither buyer or seller being atypically motivated. Accordingly, each tend to make long-term decisions which are often subject to factors different from those observed at the beginning or middle of a crisis.
As yet, we don't know what the long-term impacts on market value will be. We will be including a statement in our upcoming appraisal reports addressing this phenomena until we know more about the direct and lasting impacts of this crisis.
Written by Larry Hirsh, Golf Property Analysts