He adds industry data suggests selling prices have not reached the bottom.

"A golf course is one of many property types that suffer immediately in poor economic times," Bur tells GlobeSt.com.

However, building continues, making him wonder why developers would want to invest in struggling properties that are filling the market.

Golf courses are definitely being overbuilt in the US, particularly in Michigan, he says.

"Over the last 15 years, the number of new courses has increased from an average of approximately 150 courses per year to more than 400 per year," Bur says. "Michigan led the US in course openings each year from 1995 to 1999, and currently leads the nation with the most public courses."

He says the drop in values is evident in several recent sales, such as the Brentwood Golf and Country Club in White Lake Township, MI, which sold for $2.6 million last year. The sale price represents a drastic discount from the purchase price of $7 million in early 1999, during the peak of a golf course market, Bur notes.

"A similar transaction involved two courses outside of Williamsburg, VA. Royal New Kent and Legends of Stonehouse sold for $10.8 million in May 2001. This amounts to roughly half of the $21.5 million pad for the courses in 1997," Bur reports. "These sales exemplify the drastic decline in golf course values over the past five years."

There are many instances of courses closing and being sold for other developments, mostly residential, Bur observes. There could be a few reasons why developers are still financing new golf courses, disregarding the threat of overbuilding, Bur suggests.

Building subdivisions around courses does help the bottom line, Bur notes. These homes can be sold for significantly more than market price, helping fund the course. About 50% of those entities still building courses are developers marrying a subdivision with a course, he says.

The rest are either public bodies with more interest in providing recreation than making a profit, and developers who haven't yet caught on to the course oversupply, Bur says.

As supply continues to outpace demand, Bur said, it is unlikely that the downward trend in the value of golf courses will reverse in the short term.

"Investing in a course may pay off in the long term, if the economy picks back up and player numbers increase," Bur says.