Welcome to the ArrowCreek monthly property value update for our High Desert, Semi-Rural community that happens to contain a PRIVATE Golf Course. Participation in the golf club is purely optional for all interested parties. This is not your ‘typical’ golf community as it caters to a broad spectrum of indoor and outdoor interests. In addition, the financial diversity within the ArrowCreek community was put in place by the designer of the community and the county in 1997. We are not part of the City of Reno, even though that is our mailing address. ArrowCreek consists of 506 semi-custom homes, typically for middle and upper-middle-income families and individuals, and 578 custom home sites, typically for upper-middle and high net worth individuals. To date, 433 custom homes have been built or are being built. As an observer can see, we are a very financially diverse community spanning a large area of roughly 25 square miles below Mount Rose. This report contains the data that was available on 01 December from the Washoe County Assessor. The Assessor’s web site is now operating two to three weeks behind closures.
The vagaries of the housing market have definitely caught up with the ArrowCreek community. During this past month, only 7 properties changed ownership. As you’ll see in the charts below, ArrowCreek homes and property have continued to gain in value and are definitely a premier area within the Truckee Meadows. However, the lofty prices in ArrowCreek have not appreciated like those of Reno and Sparks/De’Andrea as we are further away from the job centers and because our prices reflect our valley views and security, they don’t rise as quickly from elevated positions. The winter buying/selling season is clearly settling in. So, ‘What are the value propositions for ArrowCreek properties?’ given that our community is now 20 years old. Key ‘take-aways’ from the ‘facts’ and the realtor forum held in October, are that smaller homes are selling better than larger homes, especially if they are in the $600,000 to $700,000 range, and that ArrowCreek owners have the option to join ‘The Club at ArrowCreek’ or not to join – an individual choice of freedom versus other gated communities that own and must maintain golf courses within their gates. Furthermore, it appears that our ‘value proposition’ of being a gated, family-oriented community with excellent nearby schools, is being recognized by the real estate community, although some realtors would like to see improvements to our welcoming landscape. Broader marketing should help the entire community with an emphasis on the use of the southeast connector, Blue Ribbon awarded Hunsberger Elementary and the construction of Marce Herz Middle School just outside our main entrance.
Within the ArrowCreek Home Owner 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 strategic planning initiative, which has yielded a concept that has received rave reviews. 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, for the next 20 years.
Since December of 2018 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 prices have been on parallel paths since the fall of 2018. This trend indicates that homes in ArrowCreek appear to be settling into a growth pattern in the $295 per square foot region. There are nineteen neighborhoods in our community. With seven properties in six neighborhoods changing hands, the ‘hottest’ neighborhood was Painted Vista.
On with THE FACTS:
a.) Seven (7) properties were recorded sold in ArrowCreek between 11 October and 22 November 2019 (per the Washoe County Assessor, who appears to be running two to three weeks behind in reporting closed sales but is being hampered by Title Companies furnishing data). This brings the total number of properties transferred over the past rolling year to 72, slightly ahead of our last report 68, or 6.6% turnover rate for our community. The turn-over rate remains very low, in the single digits, that may be attributed to general satisfaction with living in our gated community and/or a positive perspective on our amenities with an emphasis on the secure stable environment offered within ArrowCreek, or a decreased interest based upon our price position and/or advertising of our community.
b.) Three (3) 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 $294.14 per square foot. This is a decrease of $13.73 per square foot from October’s value, based upon the statistical rolling average calculation. The 12-month rolling average sales price decreased to $1,263,987.50, again based upon statistical methods. The rolling average selling price for undeveloped property on the golf course currently stands at $295,636.54 per acre (no change from last month).
c.) Four (4) properties were sold that are not connected to the golf course. The rolling average selling price for off-course homes increased to $294.95 per square foot, which is up by $2.08 per square foot over last month. Based on the chart below, there has been a steady increase in the value of these properties over the last year. The twelve-month rolling average sales price for non-golf course homes increased to $1,135,864.80. The rolling 12-month average selling price for vacant land, not on the golf course, now stands 20.1% below vacant golf course property at $246,194.53 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. Before misinterpreting the meaning of this chart, you should read further to where custom homes and semi-custom homes are compared. Custom homes not on the golf course are actually doing better than customs on the course. An interesting feature of this figure is the dramatic rise in property values on the golf course in March 2019, holding those positions until October 2019, when they dropped down to levels for off course properties. As noted from the second figure, semi-custom homes don’t appear to have a significant difference between on-course and off-course. The dramatic change appears to be in custom homes.
2. Winter is here! The housing market has firmed significantly. Lenders are being very careful about approving mortgages. For those desiring a secure, safe environment to raise a family, ArrowCreek should not be overlooked.
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. Property impinging upon the Non-Residential area/golf course is currently drawing a -0.3% premium to property not impinging ‘the course.’ 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. The following chart portrays the trend lines for Custom and Semi-Custom homes within our community.
For the past 2.5 months the averages are:
Semi-Custom On-Course: $259.69 per Square Foot
Semi-Custom Off-Course: $259.91 per Square Foot
Custom On-Course: $317.11 per Square Foot
Custom Off-Course: $349.69 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 equivalent homes in Reno are selling, on average, for $260.03 per-square-foot (Median price $1,050,000) with an average of 181 days, or 6.0 months, on the market. As noted above, you can see our ArrowCreek comparable Custom homes are selling $57 to $90 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 $229.17 per square-foot (Median price $619,000) with a time-on-market of 88 days, or 2.9 months. Again, ArrowCreek Semi-Custom home averages are around $30–$31 higher per-square-foot. Median prices rose across the Reno market by 6.9% during the comparable past year while ArrowCreek combined average prices were 3.1% higher.
- Sparks market ‘in general’ – The top quartile in the Sparks market actually compares with the Semi-Custom homes in ArrowCreek. There are no equivalent custom homes in the Sparks market. The median price for these Sparks homes is $188.08 per-square-foot (Median price $565,000) with an average of 94 days on the market, or 3.1 months. ArrowCreek Semi-Custom home averages are around $72 higher per-square-foot. Median prices rose across this market by 1.7% during the comparable past year. For the ArrowCreek community, the Semi-Custom homes increased by 0.8%.
Commentary: ArrowCreek homes are definitely in the top two quartiles of Reno and the Semi-Custom homes are in the top quartile of Sparks. It is very apparent from the data that sales points are driving the market. Also apparent from the data is that the ‘private’ golf course (a.k.a. The Non-Residential area) has not affected sales or price point.
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 and participate in its many activities. 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. Additionally, the communities that are deemed ‘direct competition’ don’t appear to enjoy full disclosure of risks to prospective buyers. Furthermore, it does not appear that it is the ‘age’ of our homes is damping sales, so much as the price differential between our community and surrounding communities.
By Ron Duncan
December 3, 2019
For previous postings of the ArrowCreek property value updates: click here.