Welcome to the ArrowCreek monthly property value update for a High Desert, Semi-Rural community in Washoe County, Nevada, that just happens to contain a PRIVATE Golf Course commercial business (A.K.A. the Non-Residential Area as documented in the Articles of Incorporation, the Covenants, Conditions and Restrictions (CC&Rs) and By-Laws). Participation in the private club (i.e., HOA residents do not have a financial interest nor obligation to ‘The Club,’ which is not true for all Associations) is purely optional for interested and “approved” 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 the golf course, which is likely different for other communities, and, as you’ll observe, the belief that homes on a course are worth more is a ‘belief’ not based on factual data.
The ArrowCreek 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 (all started out as vacant lots), typically for upper middle and high net worth individuals, of which 484 custom homes have or are being built. Approximately one third of the lots are directly adjacent to the golf course (~361). This report contains the data that was available on July 29, 2022, from the Washoe County Assessor’s Records. These records appear to be current.
During this past month the number of properties changing owners was startling at only 3 (three) properties. This data appears to be in agreement with national publications and local real estate and banking professionals. We did not make the list of the hottest local markets per Kiplinger, the Wall Street Journal, or the S&P CoreLogic Case-Schiller national home price index (20.6% increase), BUT our year-over-year price gain of 26% (This number is highly suspect this month as the sale of homes on the golf course have fallen into a never-never land of statistical significance.) would certainly put ArrowCreek in line with the hottest markets in the country. Also, CNN reported that the hottest market in the country was Tampa with a 34.8% increase. ArrowCreek absolutely competes with the top markets in terms of value. These three (3) properties that changed owners over this past month had a total value of $4.1 Million! One of the properties was directly adjoining the ‘golf course.’ ‘Raw’ property adjoining the golf course has fallen statistically ‘out-of-contention’ since no property was sold during the past year in this category.
Since August of 2021 and over the past twelve (12) months:
1. Custom ArrowCreek homes appear to have established a ‘floor’ of $425 per square foot and Semi-Custom homes an identical ‘floor’ of $415 per square-foot to grow from. With three fully financed properties changing hands this past month, there was no most active neighborhood.
On with THE FACTS:
a.) Three (3) properties were recorded sold in ArrowCreek between 16 June and 16 July (per the Washoe County Assessor). This brings the total number of properties transferred over the past rolling year to 66 or 6.1% turnover rate for our community. From a National Publication (TheHill.com) this compares to the fact that only 8.4% of Americans live in a different home than they did a year ago and in Washoe County the number is 18.4% based upon the most recent census data. The aging of the U.S. population, a lack of new housing, and increased caution have produced the lowest rate of mobility recorded at any time since 1948. ArrowCreek remains at a very low rate that may be attributed to a general satisfaction with living in our gated community. In fact, 193 (17.8%) of us have lived or owned property in ArrowCreek for more than 16 years.
b.) One (1) home and no vacant property were recorded as sold on the golf course (where the property boundaries actually touch the golf course, not just have a ‘view’ of it) during this reporting period. We use a 12-month rolling average to normalize home and land prices, The number of homes sold, in the ‘golf course’ category, barely meets the criteria for statistical analysis (11). As a consequence, the observed price escalation this month is once again highly suspect. The rolling average selling price for homes on the golf course jumped to $513.07 versus last month’s $492.04 per square foot. The price per square foot increased by $21.03 per square-foot due to the rolling year statistical calculation. The 12-month rolling average sales price increased to $2,068,102.27 versus last month’s $1,989,510.42. No additional vacant parcels were sold over the previous 12-month period, so a price is unavailable for this type of property.
c.) One (1) home and one (1) property were sold that are not connected to the golf course. The rolling average selling price for off-course homes decreased to $459.70 per square foot, which is down by $2.64 per square foot, based on a sample size of 45 homes. The twelve-month rolling average sales price for non-golf course homes decreased to $1,600,400.00 from last month’s $1,616,192.79. An additional vacant lot was sold, making the rolling 12-month average selling price for vacant land, not on the golf course, standing at $408,819.65 per acre versus last month’s $378,461.34 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. It should be noted that since August of 2021, prices have been steadily increasing across the ArrowCreek market and across the Washoe Valley in general. However, it’s clear that prices and sales have softened over the past month, and we will have to observe what the coming months display. Additionally, it was noted that five years ago the nominal price per square foot was on the order of $200 as opposed to where it is today. An interesting observation was provided recently that may account for some or most of this difference. The observation was from a Damonte Ranch resident who belongs to ‘The Club.’ “I get all the ‘amenities’ of ArrowCreek with my golf membership without the ‘high cost’ of owning a home there.” Something to ponder, as this ‘attitude’ may cause our prices to go lower to match those ‘down in the valley’ and, in fact, there is some evidence that that phenomenon is happening. Certainly, the lack of home sales adjoining the golf course may be one such indicator.
2. Summer is here along with interest rate increases to cool down inflation, and the housing market continues to be barely alive. For those desiring a secure, safe environment with majestic views to raise a family, with abundant recreational opportunities, excellent schools, shopping, medical services and peace of mind, 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/figure is hindsight, not necessarily foresight. In point of fact, it is distorted due to the lack of sales of golf course homes. From the volume of property transfers during this reporting period it is clear that the demand for a secure property environment has remained. A balanced marketing approach focused on our amenities and relatively low fees 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. From the chart it is clear that home values have been steadily increasing since August 2021. Furthermore, values of Custom homes within Truckee Meadows, especially those in Reno and within ArrowCreek, have managed to exhibit nearly the same values. However, as noted in the opening, only six homes were sold on the golf course in the past 4 months. Also, the value of Semi-Custom homes, of comparable home and land size, indicate that both Reno and Sparks offer greater dollar value per square foot than ArrowCreek from a pure price perspective but not from a secure and safe environmental perspective. ArrowCreek’s value lies in our gated security, views, quality of adjacent schools and our other amenities which amounts to a premium of about $70 per square-foot for our homes. Obviously, this is not true for our Custom homes as we enjoy the same ambience, but there is little price difference between Reno Custom homes and ArrowCreek homes.