Welcome to the ArrowCreek monthly property value update for a High Desert, Semi-Rural community in Washoe County, Nevada, that happens to contain a PRIVATE Golf Course (A.K.A. the 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, which is likely different for some other communities, 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 445 custom homes have or are being built. This report contains the data that was available on 28 December 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 four (4) properties changing owners during this reporting period. Custom homes not on the Golf Course (Non-Residential area) do not now exhibit a premium to custom homes on the course (further discussion of this point is below). In the meantime, Semi-Custom homes not on the course sold at a 5% premium to those directly abutting the golf course. In addition, ArrowCreek Semi-Custom homes are continuing to be 2.4% less expensive than those in Reno and 42% more expensive than similar homes in Sparks. It should be noted that these statistics are compiled for equivalent lot and home sizes. As you’ll see in the charts below, ArrowCreek homes attached to the golf course experienced a significant increase in the previous month which then aligned them with the price of homes not on the golf course. This appears to be due to the small sample size, as only 14 homes of this type changed hands over the past year. This makes any change to value appear to be exaggerated. The available data shows ArrowCreek custom homes selling at a discount to similar Reno homes by 3.4%. 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.
The ArrowCreek Home Owners Association (ACHOA) strives to enhance sales and values of our ArrowCreek homes.
Since January of 2020 and over the past twelve (12) months:
1. Custom ArrowCreek homes appear to have established a ‘floor’ of $290 per square foot and semi-custom homes a ‘floor’ of $260 per square-foot to grow from. With only four fully financed properties changing hands this past month, the Granite Point I neighborhood was most active.
On with THE FACTS:
a.) Four (4) properties were recorded sold in ArrowCreek between 23 November and 7 December (per the Washoe County Assessor, who appears to be about two weeks behind in documenting closed sales). This brings the total number of properties transferred over the past rolling year to 93 or 8.6% 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 are faced with a slowing economy as the fall buying season is past and 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 $311.93 per square foot. Based upon the statistical rolling average calculation (only 15 homes are in the calculation. This creates a situation where a single sale above or below the average skews the data to false values.) the price per square foot decreased by $25.32 which counters the increase of last month’s $22.62 per square foot. The 12-month rolling average sales price decreased to $1,305,994.67, again based upon statistical methods. No additional vacant parcels were sold and the rolling average selling price for undeveloped property on the golf course still stands at $300,537.66 per acre.
c.) Three (3) properties were sold that are not connected to the golf course. The rolling average selling price for off-course homes increased to $307.38 per square foot, which is up by $0.55 per square foot, based on a sample size of 55. The twelve-month rolling average sales price for non-golf course homes increased to $1,201,196.36. No additional vacant lots were sold, making the rolling 12-month average selling price for vacant land, not on the golf course, still stand at 20% below vacant golf course property at $250,373.65 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. Winter has arrived very dry 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/figure is hindsight, not necessarily foresight. From the volume of property transfers during this reporting period it is clear that the demand for a secure property environment has remained constant. 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. This past month some homes in Sparks were comparable to ArrowCreek custom homes in both acreage and size. As a consequence, we will begin tracking this comparison next month. The following chart portrays the trend lines for Custom and Semi-Custom homes within this broader community. In the chart it is not clear whether the price increases shown by the realtor databases, and the ArrowCreek data, are accurate or reflect a calculation error based upon sample size. There was a similar increase blip in this timeframe last year as well. In any event, ArrowCreek custom home prices have remained fairly stable. It can also be observed that Semi-Custom homes in ArrowCreek have maintained a reasonable competitive value position within the Truckee Meadows.
- For the past month the ArrowCreek averages are:
- Semi-Custom On-Course: $269.72 per Square Foot
- Semi-Custom Off-Course: $283.12 per Square Foot
- Custom On-Course: $327.27 per Square Foot
- Custom Off-Course: $326.03 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), Somersett (Reno market) and Saddlehorn (to be included next month). 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 $369.54 per square foot (Median price $2,050,000). This value is highly suspect as the month-to-month increase would appear to be unbelievable and may be due to a statistical error and/or a small sample size variation. The average days on the market is 275 days. As noted from above, you can see our ArrowCreek comparable Custom homes are selling at a discount of $42 per square foot LOWER. Data for separate ArrowCreek average time on market was not available. Reno homes comparable to ArrowCreek Semi-Custom homes are selling for $283.17 per square foot (Median price $860,000) with a time-on-market of 115 days. Again, ArrowCreek Semi-Custom home averages are about the same as those in the Reno market. Median prices rose across the Reno market by 33.7% during the comparable past year while ArrowCreek combined average prices were 5.5% higher.
- 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 $229.77 per square foot (Median price $799,747) with an average of 85 days on the market. ArrowCreek Semi-Custom home averages are $47 higher per square foot. Median prices rose across this market by 15% during the comparable past year. For the ArrowCreek community, the Semi-Custom homes remained at 8%.
Commentary: I was surprised again 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
January 03, 2021
For previous postings of the ArrowCreek property value updates: click here.