Mike,
This picture was most likely taken between January 1917 and April 1917. The April 1917 article in Golf Illustrated that Sven alluded to also had pictures of Wilfrid Reid teeing off on the 6th hole, so this exhibition match was very early. Whether the Olmsted Brothers started building houses to the south of the 2nd hole by 1916 or 1917, I am not sure. I do know that many of the early houses were built around the lake.
When I look at Joe's modern picture, I can't see any houses along side the 2nd hole either. Granted the photos are taken from two different directions and 96 years apart.
I have never stepped foot on the property so I am at the mercy of the 1917 reporter. Here is the quote from Golf Illustrated., April 1917:
"The course is laid out over rolling country splendidly adapted to golf. The punchbowl green on the second hole, and the full second shot uphill to the home green present spectacles as pleasing to the eye as may be found on any Northern links. A few rounds at Mountain Lake will refute forever the idea that golf in Florida must be played on flat courses."
Bret