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In Shadow of Idle Oil Rigs, These Golf Communities Are Flourishing in Texas, California

Image: In Shadow of Idle Oil Rigs, These Golf Communities Are Flourishing in Texas, California
Cordillera Ranch sports a Jack Nicklaus Signature golf course ranked among the top-5 best overall in Texas.

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Tuesday, 09 Jun 2015 11:16 AM Current | Bio | Archive

Editor's Note: Playing Partners is a regular feature on A Golfer's Life. Newsmax will discuss issues with, and give a forum to, industry insiders and golf experts. Today's topic — golf communities and real estate — highlights how golf has flourished in two regions once known more for their oil rigs than their lush fairways.

As the dog days of summer fast approach, industry insiders have predicted the price of gas will remain steady, or even go lower.

In fact, according to AAA, gas prices may have already peaked for a number of reasons — an abundance of oil and gas supplies, the usual seasonal ups and downs, and producers adjusting and dealing with the reality of $50-$60 a barrel prices after last year’s historic drop. This will surely please many as they fill their tanks for Griswold-like summer vacations.

While some may argue that the future looks bleak in terms of a return to $100+ price tags for “Texas Tea,” many oil-rich areas are holding serve, especially when it comes to real estate. Two markets in particular — Bakersfield, California, and Boerne, Texas — are actually flourishing in the shadows of idle rigs and derricks.

Bakersfield is one of the fastest-growing cities in California with a population of more than 250,000 people. It's also located in the most prolific oil-producing counties in the country, Kern County. If Kern County were a state, it would rank just behind Alaska, Texas, and Louisiana as the fourth-largest oil-producing states in the United States.

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All told, Kern County produces 66 percent of the oil in California, 10 percent in the country, and one percent of the world’s total oil production. Moneywise, that’s $2.5 to $3 billion each year in total production.

Jobs-wise, 12,000 of the approximate 200,000 Californians working in oil industry call Bakersfield home. That equates to 7 percent of all the jobs in the region — the highest percentage among large U.S. metropolitan areas.

Because of oil, Bakersfield has been able to handle the economic meltdown and ensuing slow recovery better than most of the nation. In fact, a recent Brookings study on economic recoveries in the U.S. ranked Bakersfield’s recession resilience in the top 10.

The city has also been growing, in part because of an influx of educated young professionals and businesses that are attracted to the relatively low cost of operating in the area. An April 2015 study done by financial advice news website SmartAsset ranked Kern County as the fifth-best county in California for buying a home.

With interest rates continuing to stay low and the oil industry providing plentiful opportunities for the local economy to grow, Kern County/Bakersfield is a great place to purchase a home.

Castle & Cooke, a power house in the area’s residential and commercial construction, is currently building a new upscale community at part of the Seven Oaks brand, called Highgate at Seven Oaks (Highgate). The multi-generational, active-lifestyle neighborhood sets the standard for fine living in central California. It features a mix of architectural styles, an array of beautiful parks and walking paths, and an unmatched sense of community. A sparkling resort-style swimming pool, children’s spray park and a neighborhood clubhouse and fitness center are other residential privileges.

Meanwhile, In Texas

The falling price of oil has also helped many cities and their real estate industries in Texas. Once just a sleepy little town outside of San Antonio, Boerne has thrived and become a bustling enclave thanks in part to its proximity to two major oil regions — the Permian Basin in West Texas and the Eagle Ford Shale to its south.

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It's about a four-hour drive on Interstate 10 from Boerne to the heart of the Permian Basin. Lately, though, it’s been a heartbreaking trip for those in the oil and gas field. In mid-May, the Midland Reporter-Telegram reported that the number of rigs exploring for oil and natural gas in the Permian Basin dropped by four to 233. A year ago, there were 546 rigs in the Permian — a 56-percent decrease.

A hard shot to that region’s chin, but they were not alone. The Texas Workforce Commission reported that the Texas oil and gas industry lost 8,300 jobs in April 2015, the biggest decline in six years when the recession was gripping the nation.

Those slumping figures have forced many to leave the Permian Basin region and look for employment elsewhere, like the neighboring Eagle Ford Shale. And while it hasn’t been totally immune to the drastic dip in oil and energy prices, numbers show that the 30-county deep, energy-rich region in South Texas has bucked the downward trend.

During the same month the Permian Basin lost four rigs, the Eagle Ford Shale added three to 108. Currently, the Eagle Ford Shale has 125 rigs, placing it second behind the Permian Basin in rig counts.

And that rig count looks to be on the upswing. The Texas Railroad Commission released its latest statistics and showed that Eagle Ford Shale led the state in April 2015 with 176 permits to drill oil and gas.

This increased activity has made burgeoning cities in the Texas Hill Country like Boerne very attractive. And it doesn’t hurt that Boerne also ranks among the best in the state when it comes to family living.

Niche rankings, which focus on neighborhoods and education, tabbed Boerne as the best Texas town to raise a family, and awarded it an “overall A grade” for its schools, community stability and housing costs. Newsweek also recently ranked both Boerne Independent School District high schools among the top three percent in the country, and an education analysis group listed five Boerne ISD elementary schools among the eight best in the San Antonio area, including the top four spots.

As for the town of Boerne, the U.S. Census Bureau recently tabbed it one of the fastest-growing areas in the country. Communities within this San Antonio suburb are flourishing, including those of the upscale variety.

Case in point is Cordillera Ranch. The premier private club and community posted record numbers in 2014 — 33 homes sold at an average of $886,000 and total lot sales increased by 32 percent. So far in the first five months of 2015, two dozen homes have been sold, a 71 percent increase from the same period in 2014.

It doesn’t hurt that Cordillera Ranch sports a Jack Nicklaus Signature golf course ranked among the top-5 best overall in Texas. Or that the club pioneered a movement now prominent with newer private clubs — multiple resort-style amenity clubs packaged all within the confines of one location. Besides the golf club, Cordillera Ranch boasts a social club, a tennis and swim club, an equestrian club, a rod and gun club, a spa and athletic club, and a river club.

The luxurious lifestyle — plus the proximity to the Eagle Ford Shale — has attracted oil and gas executives to Cordillera Ranch.

“With the economy thriving and the San Antonio area continuing to prosper, we expect the upward trend in real estate sales to continue in 2015,” says Charlie Hill, Vice President of Development of the 8,700-acre community.

The Alamo City economy should also benefit greatly from the lower gas prices since tourism is its lifeline. More and more families will be hitting the roads or the skies to visit the historic Alamo, enjoy the atmosphere of the Riverwalk or golf and relax at its world-class resorts. A stark contrast to a few years ago, when its economy took a hard hit as gas prices approached $4 a gallon.

It’s unsure when (or if) gas prices will escalate to that point again, but history has proven that the oil and gas industry will rebound and prosper yet again.

Yet, from the Golden State to deep in the heart of Texas, there are success stories during these tumultuous times, especially in the real estate sector.

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RonVarrial
While some may argue that the future looks bleak in terms of a return to $100+ price tags for “Texas Tea,” many oil-rich areas are holding serve, especially when it comes to real estate. Two markets in particular are actually flourishing in the shadows of idle rigs and derricks.
golf, communities, flourishing, texas, california
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2015-16-09
Tuesday, 09 Jun 2015 11:16 AM
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