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The purpose of this paper is to examine the pricing of vacant lots in master planned golf course communities (GCCs) over the period of 2000-2016. The authors compare the longitudinal pricing behavior of different lot types during this economic cycle and examine the causes of the property bubble and subsequent deterioration of the business model with the arrival of the Financial Economic Crisis (FEC).

The authors construct spatial hedonic models for three master planned GCCs in Pickens County, South Carolina and use interaction dummies to examine the pricing of different types of vacant lots before and after the FEC.

The authors find that there is a collapse in value for interior lots in the GCCs compared to interior lots in the county. As interior lots comprise over 50 percent of inventory in a typical master planned GCC, this loss of real estate value threatens the viability of such communities in the aftermath of the FEC.

The research results inform real estate investors, real estate developers, current homebuyers and potential homebuyers of the impacts of the FEC on master planned GCCs and some of the risks associated with such developments.

This is the first paper the authors are aware of that indicates the financial viability of master planned GCCs is associated with the pricing fragility of interior lots during cyclical markets. While demand for premium quality lots suffers, there is a collapse in demand for interior lots during the crisis.