The value of a name: we rank six architects according to the appreciation rates of the homes on their real-estate courses
A 4,000-SQUARE-FOOT Western-style ranch sits on a golf course adjacent to the 15th green. Given the location, that house will likely prove to be a better investment than a similar home in a generic subdivision two blocks away. Now put that same house on a course designed by Pete Dye, and it might be even more valuable. That’s because homes on Pete Dye courses often appreciate faster over five years than residences on courses created by other architects, even Jack Nicklaus, Tom Fazio and Robert Trent Jones Jr., according to data just released by Golf Digest and BusinessWeek (see ranking based on five-year ratios, right). The reason the architects were ranked according to five-year ratios is that a large number of new developments, especially at the high end, opened since 1997. And 31 percent of the developments studied were pre-1997.
The golf-course homes were assessed based on how their market value changed over the past one-, five- and 10-year periods, and how that appreciation compared to other homes in the same zip code. On average, for the six architects included in the study (Pete Dye, Arthur Hills, Tom Fazio, Robert Trent Jones Jr., Jack Nicklaus and Arnold Palmer), the golf homes appreciated 28 percent faster over five years, a higher rate than similar homes in the same area. (Other popular architects, such as Tom Weiskopf, Gary Player, Rees Jones and Greg Norman, were studied but excluded from the final list because the number of real-estate courses they’ve designed in those specific markets was not large enough to render meaningful comparisons.)
There is a significant variance when you scrutinize the numbers. For example, during the past five years, homes built on Pete Dye courses have outperformed other homes located in the same zip code by 60 percent (or a 1.6:1 ratio). Fazio, Arnold Palmer, Jones Jr., and Nicklaus follow Dye in the five-year averages. Meanwhile, homes built on Arthur Hills courses have underperformed, trailing the homes in the same zip code by 10 percent (.9:1 ratio). These are all considered world-class architects. So what gives?
Pete Dye is one of the all-time greats, landing nine designs on Golf Digest’s list of America’s 100 Greatest Courses. His name has been especially recognizable of late, as he continues to create challenging tour-caliber courses. Robert Trent Jones Jr. is a high-profile name in the game, partly from his father, the legendary course architect.
Given these price tags, one might think purchasing a golf home is more the fulfillment of a dream than a shrewd investment. But according to Hegarty, the majority of buyers are keenly aware of the investment aspect of their purchases. “They could invest that money elsewhere, but they believe the most productive investment opportunity is to put the money in a golf-course home,” says Hegarty. “They believe it will perform better than the stock market, bonds or anything else they could invest in. Quite often, they’re right.”
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