Welcome to the ArrowCreek monthly property value update for a High Desert, Semi-Rural community that happens to contain a PRIVATE Golf Course (A.K.A. Non-Residential Area). Participation in the private golf club is purely optional for all interested parties. The origins of this report were based on a heated discussion of the value of homes on a golf course versus those not on a golf course and, as you’ll observe, the premise that homes on a course are worth more is a ‘belief’ not based on factual data from Northern Nevada. Our community is financially diverse having been created that way by the designer of the community and Washoe county in 1997. It consists of 506 Semi-Custom homes, typically for middle and upper middle-income individuals, and 577 Custom home sites, typically for upper middle and high net worth individuals, of which 444 custom homes have or are being built. This report contains the data that was available on 27 September from the Washoe County Assessor’s Records as compiled and analyzed by the author.
The vagaries of the housing market have caught up with the ArrowCreek community. There were nine (9) properties changing owners during this reporting period. Custom homes not on the Golf Course (Non-Residential area) now exhibit a 2.5% premium to custom homes on the course. In the meantime, Semi-Custom homes not on the course are selling and exhibiting a 3.3% premium to those abutting the course. In addition, ArrowCreek Semi-Custom homes are 7.4% more expensive than those in Reno and 29% more expensive than similar homes in Sparks. Over this past month, ArrowCreek Custom homes are currently selling at a ‘premium’ of 8.4% to those in Reno. As you’ll see later in this report, Reno Custom homes have decreased in value compared to similar homes in ArrowCreek. This, of course, leads to the question of ‘What are the value propositions for ArrowCreek properties?’ Key ‘take-aways’ of these ‘facts’ are that the views, security and outstanding schools available to ArrowCreek residents, and ArrowCreek owners have the option to join ‘The Club at ArrowCreek’ or not to join – an individual choice of freedom versus other gated communities, add to the value of our homes.
ArrowCreek Home Owners Association (ACHOA) initiatives are underway to enhance sales and values (a most positive step). The initiatives include a Landscape Committee, which is looking into improving the water quality around our parkway to enhance the ‘greening’ of plantings, and a 2020 update to the ACHOA Strategic Plan. These initiatives are intended to enhance and maintain ArrowCreek as a premier people and family-oriented community collocated with a private golf club, identified as a Non-Residential area in the governing documents, while maintaining the semi-rural, high desert nature we have come to love.
Since October of 2019 and over the past twelve (12) months:
1. ArrowCreek properties have stayed in the premium class within Washoe and Douglas Counties. As you read this report, you will see that home prices reached an inflection point last November and December (2019) with homes not abutting the golf course becoming more valuable than homes on the golf course. This also began a trend where ArrowCreek homes established a ‘floor’ of $290 per square foot to grow from. This ‘trend’ was significantly breached this past month and appears to have been lowered to the area around $285 per square foot. With nine fully financed properties changing hands this past month, the Monte Sol neighborhood was most active.
On with THE FACTS:
a.) Nine (9) properties were recorded sold in ArrowCreek between 21 August and 9 September (per the Washoe County Assessor, who appears to be about three weeks behind in documenting closed sales). This brings the total number of properties transferred over the past rolling year to 81 or 7.5% turnover rate for our community. This remains a very low rate, in the single digits, that may be attributed to a general satisfaction with living in our gated community, or the higher prices of properties and/or a positive perspective on our amenities and an emphasis on the secure stable environment offered within ArrowCreek. Additionally, we may be faced with a slowing economy as the summer buying season is here with shelter in place governmental restrictions mandated due to the threat posed by the COVID-19 virus.
b.) Four (4) properties on the golf course (where the property boundaries actually touch the golf course, not just have a ‘view’ of it) were closed during this reporting period. The rolling average selling price for homes on the golf course now stands at $298.82 per square foot. Based upon the statistical rolling average calculation the price per square foot increased by $5.72 per square foot. The 12-month rolling average sales price decreased to $1,266,371.33, again based upon statistical methods. Three vacant parcels were sold and the rolling average selling price for undeveloped property on the golf course stands now at $255,662.18 per acre.
c.) Five (5) properties were sold that are not connected to the golf course. The rolling average selling price for off-course homes increased to $300.28 per square foot, which is up by $1.18 per square foot. The twelve-month rolling average sales price for non-golf course homes increased to $1,185,840.00. Two additional vacant lots were sold, making the rolling 12-month average selling price for vacant land, not on the golf course, standing at 7.25% below vacant golf course property at $238,378.46 per acre.
d.) The figure below shows the value trends over the past twelve months with the vertical scale being the cost per square foot.
2. Fall is here and the housing market continues to show signs of life. For those desiring a secure, safe environment to raise a family, ArrowCreek should not be over-looked.
Do keep in mind that everyone’s selling price is based upon his or her own set of circumstances and the above picture is hindsight, not necessarily foresight. From the sheer volume of property transfers during this reporting period it is clear that the demand for a secure property environment is definitely weakening. A balanced marketing approach focused on our amenities should go a long way toward creating a better environment for all homeowners and buyers.
Continuing with the commentary from previous months: the author received queries about Semi-Custom and Custom homes both on and off the golf course and their relative selling prices with respect to those found in Reno and Sparks. The following chart portrays the trend lines for Custom and Semi-Custom homes within this broader community. In the chart it can be observed that the Custom home sales in Reno have turned down in price over this past month, while those in ArrowCreek have moved sideways. It can also be observed that Semi-Custom homes in ArrowCreek, that are not on the ‘golf course,’ have maintained a reasonable value position.
For the past month the ArrowCreek averages are:
Semi-Custom On-Course: : $264.29 per Square Foot
Semi-Custom Off-Course: $272.94 per Square Foot
Custom On-Course: $311.38 per Square Foot
Custom Off-Course: $319.27 per Square Foot
- We also received a request from one of our readers for a comparison of the ArrowCreek values with those in D’Andrea (Sparks market) and Somersett (Reno market). Having obtained the appropriate reports from the real estate community, here is what was learned. (Data extracted from altosresearch.com Chase International)
- Reno market ‘in general’ – Custom homes in Reno are selling, on average, for $300.86 per square foot (Median price $1,395,000) with an average of 189 days on the market. As noted from above, you can see our ArrowCreek comparable Custom homes are selling at $11 to $18 per square foot higher. Data for separate ArrowCreek average time on market was not available. Reno homes comparable to ArrowCreek Semi-Custom homes are selling for $250.00 per square foot (Median price $775,000) with a time-on-market of 84 days. Again, ArrowCreek Semi-Custom home averages are $14 higher, for homes on the ‘golf course’ and are $73 higher per-square-foot for homes not on the ‘golf course.’ Median prices rose across the Reno market by 29.7% during the comparable past year while ArrowCreek combined average prices were 0.4% lower.
- Sparks market ‘in general’ – The top quartile in the Sparks market actually compares with the Semi-Custom homes in ArrowCreek. The median price for these Sparks homes is $222.19 per square foot (Median price $775,000) with an average of 35 days on the market. ArrowCreek Semi-Custom home averages are $42 to $51 higher per square foot. Median prices rose across this market by 14.5% during the comparable past year. For the ArrowCreek community, the Semi-Custom homes declined by 4.3%.
Commentary: I was surprised this month by the price appreciation in the Reno/Sparks area versus our ArrowCreek community, which is certainly observable from the above chart. Our homes continue to be in the top two quartiles of Reno and the Semi-Custom homes are in the top quartile of Sparks and it should be recognized that our base values from a year ago were significantly above those for other portions of the Truckee Meadows. It is also apparent from the data that smaller homes are selling better than larger homes. In addition, the data suggests that the ‘private’ golf course (a.k.a. The Non-Residential area of ArrowCreek) has little effect on prices because ArrowCreek homes are selling at roughly comparable non-gated community homes in the Truckee Meadows based upon real estate advertising.
Some owners of ArrowCreek believe they reside in a ‘golf community.’ Those words appear to emanate from those who have chosen to belong to the ‘private’ golf club. In their minds, it may be true; however, in fact, the truth is only a third of the homes are on the golf course and less than 50% of owners are actually members of ‘the club.’ Yes, we have a private golf club within our gated community, but we also enjoy the freedom to belong or not. The ‘value proposition’ for our unique community should continue to focus on attracting professionals who value security, good schools and recreational opportunities. More people will come to the ArrowCreek ‘experience’ as Nevada businesses gather top talent with competitive salaries.
By Ron Duncan
September 29, 2020
For previous postings of the ArrowCreek property value updates: click here.