Record sales and soaring property values have some
real estate experts fearing a painful correction. But even if the bubble bursts,
golf communities may come through unscathed.
Some see the current housing market as fraught with
hazards—one big sucker pin. They believe that prices are too high and a
correction is not only inevitable but imminent. Others look at real estate and
see only tap-in birdie opportunities, and they keep firing at every flag. They
anticipate prices going up and show no signs of caution.
No matter how you interpret the trend, there’s no
doubt the housing market is white-hot, with sales records being set nearly every
month. According to the National Association of Realtors (NAR), the national
median price for existing homes will rise 9.4 percent in 2005 to $202,600, while
new-home prices will rise 5.8 percent to $233,900, the result of a perfect
confluence of low supply and high demand, a sluggish stock market, low interest
rates and a variety of mortgage options.
“We have to go back to the mid-1960s to see a
period of comparably low mortgage interest rates,” says NAR president Al
Mansell. “A big difference now is a decline in mortgage origination costs, plus
a mushrooming in the availability of low- and no-down payment loans.” The
30-year fixed rate in late August was at 5.77 percent, according to Freddie
Mac.
As a result, the real estate buzz has taken over
America. Nearly every day, scores of
articles in newspapers and magazines try to make sense of the market. Meanwhile,
speculators and investors have snapped up properties in hopes of making a quick,
spectacular profit, in the tradition of day traders or Silicon Valley
IPOs.
At the high end of the housing market, golf
communities are just as hot, with nearly every development reporting record
sales this year. At Southern Highlands in Las Vegas, a five-bedroom, 8,000-square-foot
house is going for $4.95 million. At Lake Nona in
Orlando, the
asking price for a 1.71-acre homesite is $1.9 million.
“This is the greatest time in real estate’s
history,” says Robert Shiels, vice president of sales and marketing for Lyle
Anderson, which oversees several communities, including Desert Highlands and Superstition Mountain in Arizona.
This dizzying escalation has buyers giddy about
their next purchases and potential sellers wary about an imminent bursting of
the bubble, much as with the stock market several years
ago.
