Friday, December 18, 2015

What Type Of Real Estate Is Performing Worse Than Farmland?

We've recently seen that both British and American farmland are declining at 4-6% per annum.

From Modern Farmer:

From Washington to Michigan to Virginia, golf courses are going under. And they're undergoing a strange conversion—sometimes a poetic one—back to their previous form: farmland.
It’s not widely reported outside of golf circles, but the fact is: In almost every way, golf is a declining sport. The National Golf Foundation declared that, despite a not-insignificant rise in the number of female golfers, the total number of golfers in the US is down by a whopping 400,000 in the last year. Dick’s Sporting Goods sales are holding relatively steady except for golf (and hunting, but mostly golf); retail sales in the company’s Golf Galaxy stores were down more than 10 percent last year.

Most importantly for our purposes, more golf courses have closed than opened every year since 2006, meaning that the total number of golf courses has been decreasing for eight years. Hundreds of courses are closing every year. (The theories why this is happening range from the lack of a superstar, a la Tiger Woods, to the declining state of the American middle class.)

This leaves big chunks of fairly desirable land, carefully tended and often with water and electrical hookups, sitting unused, all around the country. And a curious thing has begun to happen: That land is being turned into farmland. This is not necessarily a given; farmland has been disappearing from both the US and Canada over the past decade, with arable land typically gobbled up by developers. The golf course conversions are an unexpected bright spot....MORE