A Day in the Life of Appraising Iowa-Nebraska-Florida

Florida golf courses disappear as developers seek new type of $green$

Land along a golf course has long been coveted by golfers and non golfers alike. Even people who don’t play golf like to look at golf courses. Lined with majestic pines and oaks, the edges of the land where eagles often nest has also been sought after for building high end residential real estate. Pastoral views of rolling fairways and well maintained greens used to play the quiet, relaxing game have driven the value of these lots up for decades. Now a new phenomena is threatening the property values along courses. In areas where vacant land is at a premium, developers are purchasing the courses and setting their sights, not on bunkers and water hazards, but new construction.

What will this mean for the values of homes that already exist along a course? Homes that were purchased and priced specifically due to their location along a gorgeous swath of empty land. It’s a tough question, and one that is weighing on the minds of thousands of landowners.

Next to waterfront views, golf course views are often considered the most desirable, and are heavily factored into the property valuations performed by residential real estate appraisers.

Between 1998 and 2006, more than 4,000 new courses opened. More than 400 U.S. courses went defunct in 2016 and 2017, according to the National Golf Foundation. Florida is home to about 1250 of the nation’s remaining 15,000 or so golf courses. It has the most of any state. Let’s take a look specifically at Pinellas County, FL, and explore what this could mean for values along the Bardmoor Golf Course in the City of Seminole. The owner of the 150-acre Bardmoor course agreed earlier this year to sell to Wheelock Communities and Gentry Land, the companies that developed Starkey Ranch, a planned community of new construction homes in Pasco County.

The Bardmoor course has hosted a wide variety of golfers over the years, from High School teams to PGA Tour Champions. Bardmoor was founded in 1971, and homes began popping up around the course shortly after. Unlike many courses that have closed, Bardmoor appears to be thriving. The course and club are owned by Bayou Golf LCC, which paid $12.5 million for them in 2006. The Bardmoor course is currently designated for recreational use. Redevelopment would entail a change in land use and zoning, a long process that would involve multiple county, state and federal agencies.

Representatives of the developers claim that buffers of trees and landscaping would ensure that after they develop new homes where the course once was, homeowners who now have sweeping golf course views wouldn’t be looking into someone’s else’s windows, and to mitigate the impact on property values, the new homes would be of comparable quality as existing ones.

Realtor Bobbie Kahler, who has several listings in Bardmoor spoke to a reporter following a recent community meeting, “We don’t want any publicity on this,” she said. “There are houses under contract, closings are coming up. People won’t want to buy in here if they know the golf course might go away. This is horrific,” according to the Daily Commercial, a local news outlet.

According to Forbes, “Once closed and left untended for as little as a year, it can cost several million dollars to repair and reopen a course — nature reclaims unmaintained land quickly, and home values can drop as much as 50% within weeks of a course closing.”

Concerns not only about the loss of the golf course view, but increased traffic, taxes, and construction noise, are shared by residents not only of single family homes along the course, but also villas and multi family units.

Currently 12 homes are listed for sale along Bardmoor golf course, ranging in price from $539,000 to $875,000. 5 homes are currently pending at prices ranging from $550,000 to $1,699,000. In the last 6 months 7 homes have sold for sale prices ranging from $415,000 to $810,000.

Other recent golf course closures in the area include, The Tides Golf Club. However, properties along that course were limited to a relatively small number, and the real estate in the area, which is near the water, is already at a premium.

The main question on the minds of all property owners along the Bardmoor golf course is how will this affect my property value? The answer is complicated and dependent on several factors that are as of yet unknown. Will the land use change be approved? How will the views be affected? What amenities will be added to the community as a result of redevelopment? Will property taxes increase to pay for new infrastructure? And just what are they going to build on the Bardmoor golf course?   

There is not much information out there in terms of hard data to calculate exactly how much property values will decline due to a golf course closing. It's because each situation is unique. One thing is for sure, this is not an anomaly that will wane in the coming years. Closures will continue to increase and the crisis may even begin to affect values at golf courses which are currently operating without issue. Even the hint of uncertainty of the future of a golf course could greatly affect property values.

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To Do:

Research existing vs historic property values around Bardmoor golf course

Research closer and property values around the The Tides Golf Club in Seminole

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Posted by Patricia Smith on April 14th, 2019 9:19 PMLeave a Comment

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February 20th, 2019 8:52 AM
For the last several days, I have logged in at 6:00 am, fully intending on writing a great blog about a lesson I learned on my most recent appraisal assignment.  However this morning, rather then spending two hours creating a blog, and sharing about the appraisal assignment, I am writing about how easy it is to get to distracted from your original intentions.  At 6:00 am, sitting down to write, but first "let me clear this one thing on my desk, I promised to scan and email a copy of an appraisal to someone".  Sounds simple.  I typically start out by scanning the document to my desktop computer, even though there is that feature on my fabulous all in one printer, email, scanner to simply scan and email the document directly.  How long could it possibly take to do that "thing" I have been putting off; adding my email address to the printer/scanner thus eliminating a step and adding one more automated feature which will enhance my productivity.  Two hours later, after much reading, googling, security settings and g suite email smtp protocols I can now email from my scanner!  Look for an appraisal blog later this week.  If you need help adding your email to your scanner I am now an expert, just reach out. 

Posted by Patricia Smith on February 20th, 2019 8:52 AMLeave a Comment

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A Day in the Life of an Appraiser in Rural Pottawattamie County and Douglas County.  The majority of our appraisal valuation services today is in the city/suburbs of Council Bluffs, IA and Omaha, Nebraska, we are often called to appraise small acreages in rural communities like Underwood, Treynor, Carson, Oakland Iowa, and Blair, Bellevue, Papillion rural areas in Sarpy County or Douglas County Nebraska.   
Whether it is a home on 5 acres, or an outbuilding and 10 acres we are challenged to value the land and location for adjustment purposes, in order to arrive at a credible opinion of value.  Some of the land valuation involves Surplus Land and Excess Land which we have already discussed here.  But the other issue which is not uncommon are land easements.  Often times, these easements were created when a small parcel of land was divided from a working working farm to allow a family member to build a house near by.  The easement serves as an access for a farmer to reach a grain bin with a truck load of corn harvested in the fall, or a tractor to cross on to adjoining land to plant crops in the spring. These easements are known as Appurtenant Easements.  An Appurtenant Easement is a right to use adjoining property that transfers with the land. The parcel of land that benefits from the easement is the dominant tenement. The servient tenement is the parcel of land that provides the easement.  The answer to this question is never a simple one.   It comes down to how much less will a buyer pay if there is an existing easement allowing someone to drive across their property.  Often it relies on how much of a "nuisance" the easement is, how close is the road to the home, how often is the road used, does it require a lot of maintenance.  Each easement is treated individually and we can only base the impact on data provided by colleagues,real estate agents, listing services and the owners themselves.  Patricia Smith

Recently we performed an appraisal that had two plotted lots on one parcel ID with the same address.  The second lot had a part of the garage on it and was also land locked.  Per FHA Guidelines the lender asked us to clarify if the additional lot was excess or surplus. In this case the lot was surplus.  It would not be feasible to divide the two parcels.  Here is the rule directly from the FHA Handbook. 

FHA Handbook 4000.1 Page 497

"Excess Land refers to land that is not needed to serve or support the existing improvement. The highest and best use of the Excess Land may or may not be the same as the highest and best use of the improved parcel. Excess Land may have the potential to be sold separately.

 Surplus Land refers to land that is not currently needed to support the existing improvement but cannot be separated from the Property and sold off. Surplus Land does not have an independent highest and best use and may or may not contribute to the value of the improved parcels.

 The Appraiser must include the highest and best use analysis in the appraisal report to support the Appraiser’s conclusion of the existence of Excess Land. The Appraiser must include Surplus Land in the valuation.

If the subject of an appraisal contains two or more legally conforming platted lots under one legal description and ownership, and the second vacant lot is capable of being divided and/or developed as a separate parcel where such a division will not result in a non-conformity in zoning regulations for the remaining improved lot, the second vacant lot is Excess Land. The value of the second lot must be excluded from the final value conclusion of the appraisal and the Appraiser must provide a value of only the principal site and improvements under a hypothetical condition. 

FHA Handbook