Is so-called Lifestyle Living a victim of the recession too?

A recent article on the Business Week Web site - http://tiny.cc/TT1Tr was about the value of choosing to living in a particular place because of a lifestyle choice. That article was about the choice of living in an expensive upscale neighborhood, but that got me to thinking about what is happening to lifestyle living in our area.

Michigan has its share of ”lifestyle communities” or neighborhoods. We have communities built around golf courses, communities built around our many inland lakes and communities where the draw is horse riding in our various parks and state recreation areas. Of course, we also have smaller enclaves of lifestyle living, such as loft living above downtown stores and a few shared facility colonies, called co-housing communities, as well as other identifiable lifestyle communities.

What I’m seeing locally is a trend away from the lifestyle communities that require fairly large discretionary spending along with a real estate premium on the property itself. This has been particularly obvious in the case of golf communities, where hefty monthly club fees greatly inflate the cost of living. We have some here where the monthly club fees exceed the property taxes and those communities are hurting, with tons of homes on the market for extended periods and lots of foreclosures. The downsizing of local companies and the elimination of executive positions in the current economy have caused much of the shift in these communities.

We also have lots of lake-oriented neighborhoods in the area and those are also feeling the heat of this recession. Lakefront houses have always commended a premium and likely always will, if for no other reason that the views afforded; however, the lakefront lifestyle is an expensive one to maintain, with all of the peer pressure to have the boats ands other water toys. Lately one of our agent who specializes in representing lakefront homes in this area has noticed more and more buyers who are evaluating the homes directly against other comparably sized and featured homes that are not lakefronts. In other words they have discounted the lakefront premium significantly, if not completely and are saying, “look, I’m buying a house here and the fact that it happens to be on water is nice, but let’s look at the house first.”

That’s a significant shift for our market, if it holds. What that’s saying to me is that we are looking at a buyer pool who basically doesn’t have the time or the money to support committing to a full lifestyle purchase. They are looking at the houses, even if they don’t intend to participate actively in the lifestyle of the neighborhoods. In some cases, the extra costs associated with an otherwise acceptable house (mandatory golf club fees for instance) are the deciding factor in whether to buy or not and that is adding to the woes of many sellers in those neighborhoods. As much as a person may like the house, if there is a $1,000/mo mandatory club fee built in to the costs the place is just not likely to sell. Unfortunately, the days of the company picking up fees like that as entertainment costs is long gone.

We are also “horse country” out here in Milford, Michigan; however, the days when people could afford to maintain 2-3 horses on 5-10 acres of land seem also to have faded. We still have lots of horse people and many “gentlemen’s farms” in the area, but more And more people who want to ride seem to be finding places to board their horses, rather than buy and maintain horse facilities themselves.

I’m sure that there are many other lifestyle community types that I could have discussed and many that just don’t exist here in the Midwest. We don’t have the beach-oriented lifestyle here, nor the mountainside lifestyle that might be found on the coasts. Both of those are very expensive and have their on sets of issues to deal with, in terms of maintaining the lifestyle.

Are you seeing the same things where you are? Has the economy forced people to rethink paying the extra money to enjoy specific lifestyles and communities? Are the premiums for certain lifestyle living areas starting to go away or to cause sales of homes there to slow? Do you think this is just temporary or are we seeing a fundamental shift away from some of these lifestyle communities?