Welcome to the ArrowCreek monthly property value update for a High Desert, Semi-Rural community that happens to contain a PRIVATE Golf Course. 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 fantasy. Our community is financially diverse having been created that way by the designer of the community and the county in 1997. It consists of 506 Semi-Custom homes, typically for middle and upper middle-income individuals, and 578 Custom home sites, typically for upper middle and high net worth individuals, of which 439 custom homes have or are being built. This report contains the data that was available on 1 August from the Washoe County Assessor’s Records.
The vagaries of the housing market have caught up with the ArrowCreek community. There were six (6) properties that changed owners during this reporting period. Custom homes not on the Golf Course (Non-Residential area) now exhibit a 12.4% premium to custom homes on the course. In the meantime, Semi-Custom homes not on the course are selling and exhibiting a 9.7% premium to those abutting the course. In addition, ArrowCreek Semi-Custom homes are 1.3% more expensive than those in Reno and 15.4% more expensive than similar homes in Sparks. As you’ll see later in this report, Reno custom homes and Sparks semi-custom homes are increasing in value faster than 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, 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, adds to the value of our homes.
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 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 August 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 be lowered to the area around $285 per square foot. With six fully financed properties changing hands this past month, no one neighborhood was most active.
On with THE FACTS:
a.) Six (6) properties were recorded sold in ArrowCreek between 24 June and 21 July (per the Washoe County Assessor, who appears to be current in closed sales). This brings the total number of properties transferred over the past rolling year to 64 or 5.9% 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.) One (1) property on the golf course (where the property boundaries actually touch the golf course, not just have a ‘view’ of it) was closed during this reporting period. The rolling average selling price for homes on the golf course now stands at $286.60 per square foot. Based upon the statistical rolling average calculation the price per square foot decreased by $14.30 per square foot. Likely due to a foreclosure. The 12-month rolling average sales price decreased to $1,249,214.17, again based upon statistical methods. The rolling average selling price for undeveloped property on the golf course stands now at $262,684.27 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 decreased to $295.11 per square foot, which is down by $11.70 per square foot. The twelve-month rolling average sales price for non-golf course homes decreased to $1,166,863.41. The rolling 12-month average selling price for vacant land, not on the golf course, stands 9.9% higher than vacant golf course property at $291,621.79 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. Summer is here and the housing market is showing 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 home sales outside of ArrowCreek are trending upwards in price over this past month, while those in ArrowCreek had a significant down-turn. It can also be observed that semi-custom homes in ArrowCreek, that are not on the ‘golf course,’ have maintained a reasonable value position. In the meantime, if one wanted value, it’s clear that semi-custom homes on the ‘golf course’ present a better value than those in the Reno semi-custom market. It’s also apparent that ArrowCreek custom homes on the ‘golf course’ offer a better value that Reno custom homes.
For the past month the ArrowCreek averages are:
Semi-Custom On-Course: : $243.86 per Square Foot
Semi-Custom Off-Course: $267.51 per Square Foot
Custom On-Course: $300.85 per Square Foot
Custom Off-Course: $338.24 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 $323.57 per square foot (Median price $1,497,500) with an average of 189 days on the market. As noted above, you can see our ArrowCreek comparable Custom homes are selling at -$23 to $15 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 $252.36 per square foot (Median price $799,995) with a time-on-market of 92 days. Again, ArrowCreek Semi-Custom home averages are $8.5 lower, for homes on the ‘golf course’ and are $15 higher per-square-foot for homes not on the ‘golf course’. Median prices rose across the Reno market by 20.8% during the comparable past year while ArrowCreek combined average prices were 4.6% 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 $221.58 per square foot (Median price $707,499) with an average of 64 days on the market. ArrowCreek Semi-Custom home averages are $22 to $46 higher per square foot. Median prices rose across this market by 10.7% during the comparable past year. For the ArrowCreek community, the Semi-Custom homes declined by 4.8.
Commentary: ArrowCreek homes continue to be 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 smaller homes are selling better than larger homes. Also apparent from the data is 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
August 7, 2020
For previous postings of the ArrowCreek property value updates: click here.