What's the deal on prices of Colleton River real estate?

 I just got done reading the Club's "Marketing, Real Estate & Membership Update." What great news! Sales are UP! Sales price as a percentage of asking price is UP! Member experiences are UP! What exciting times.

But you know what isn't in the Update? Information about how the Club's sales prices doing in the local market. Based upon the victory laps taken by the Board, one would imagine that real estate prices are soaring. So I went looking for data. Through the kindness of a local Realtor, I obtained sales information about Colleton River, Belfair, and Berkeley Hall for 2020 and 2021.

As Mark Twain observed over a century ago, "There are three kinds of lies: lies, damned lies, and statistics. So people should take statistics (including mine) with a grain of salt. I decided to use sales price per square foot as my metric. I made this decision before I conducted the analysis--I didn't conduct the analysis and then search for metrics that supported a narrative. Since I only had data for the first 10 months of 2021, I compared that period with the first 10 months of 2020. Obviously, the real estate market has been in turmoil during this period--but Colleton River, Belfair, and Berkeley Hall were all subject to identical market forces. Here's what my analysis showed (in $ per square foot):

                                                    Jan-Oct 2020                Jan-Oct 2021            % Change

Colleton River                                $230                                $244                        6%

Belfair                                            $190                                 $221                      16%

Berkeley Hall                                 $190                                $224                       18%

Note: The above numbers are based upon all sales. If one used the middle 50 percent of sales                   (which would reduce some of the randomness caused by properties at the low end or high end of the sales range) to calculate the sales price per square foot, Colleton River increased by 5%, versus 29% for Belfair and 16% for Berkeley Hall. If anyone's curious about my work product, just send me an email and I'll send you the Excel worksheet.

Between 2020 and 2021, Colleton River has experienced significantly less appreciation than either Belfair or Berkeley Hall. I won't speculate as to why Belfair and Berkeley Hall have experienced greater price appreciation--but they have.

Of course, the interesting question is why the Board doesn't find this information worth sharing with the Owners. 

Wait a minute!! Maybe the price difference has something to do with the amenities? So I looked at prices (again per square foot) during the fourth quarter of 2020 and the second quarter of 2021 (you may recall that the vote on the amenities proposal was conducted during the first quarter and ended in late March 2021). One of the Board's sales pitches for the amenities was that approving the amenities projects would lead to higher property values. Here's how prices changed:

                                                  4Q2020                                2Q2021                    % Change

Colleton River                              $237                                    $244                            3%

Belfair                                           $195                                    $224                          15%

Berkeley Hall                                $200                                    $236                          18%

There may be a lot of reasons for the change in prices and I certainly don't attribute Colleton's underperformance to the amenities projects--and if the amenities projects are ever completed, they may result in higher property values. But there isn't any evidence that that the approval of the amenities projects created a competitive advantage for our Club.

I'll have more to say about the amenities in another post.


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