Quote:
Originally Posted by dewilson58
IF someone paid a premium, they paid for a golf course view.
IF someone paid a premium, the premium value continues to grow in value.
IF someone paid a premium, they have not lost a dime.
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I have to respectfully disagree with all three of the above points.
Let’s consider one of the homes on the 9th fairway of the Oaks course.
- Yes, part of the premium paid was for a view of the golf course, but part of the premium was for what is viewed on the other side of the fairway, along with living in a Country Club atmosphere. They used to see tennis courts and a pool which they had easy access to. They also saw a practice facility, and a clubhouse/restaurant. The building they looked at was a couple stories high and did not have the planned multiple story apartment complex with balconies facing their homes. A good portion of the premium they paid for is no longer there, and there is extreme uncertainty as to what will eventually be there. People pay a premium for certainty and discount value for uncertainty.
- In my opinion it is a major stretch to claim the premium value paid for the home is currently increasing given the negative changes that have already taken place, as well as future uncertainty. That is not to say the home price itself has not increased because of both home price appreciation as well as significant increases in the cost of building a new home. But that is entirely separate from the premium they paid for the home. The relevant comparison should be how has their premium increased relative to the premiums paid for similar homes on other Championship courses that have not experienced the same unfortunate turmoil.
- Again, using the proper comparison, how can it be said that if someone paid a premium, they have not lost a dime. Granted, unless one of the homes in question was purchased just before the plans for HH became public, the homes are most likely worth more than their cost basis, so technically they have not lost a dime. But again, the proper comparison would be what would the fair market value of the home be If HH was still the Country Club they bought into versus what it is now and will most likely become. I am generally not a gambler, but I would put a substantial wager on the fact the homes have lost some real value based on the proper relative value comparison.