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 as documented in the the Covenants, Conditions and Restrictions (CC&Rs)). 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 in Northern Nevada) 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 other communities, and, as you’ll observe, the belief that homes on a course are worth more is a ‘belief’ not necessarily 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 469 custom homes have or are being built. Approximately one third of the lots are directly adjacent to the golf course. This report contains the data that was available on September 26, 2021, from the Washoe County Assessor’s Records as compiled and analyzed by the author.
During this past month the number of properties changing owners was at a nominal rate of 6 (six) properties versus 6 (six) for last month. 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 (19.1% increase), BUT our year-over-year price gain of 32.1% certainly should have qualified us for the list. These six (6) properties that changed owners over this past month had a total value of $7.0 Million! None of the properties were directly adjoining the ‘golf course.’ So, currently ‘non-golf course homes’ enjoy a sales price advantage of 5.3% ($21.58 per square-foot) advantage over ‘golf course’ homes, with the advantage squarely noticed, as you’ll read below, in the value of custom homes. This ‘advantage’ does not hold up for undeveloped land as the price, as you will also read shortly, is 12.1% higher for property adjoining the golf course.
Since October of 2020 and over the past twelve (12) months:
1. Custom ArrowCreek homes appear to have established a ‘floor’ of $330 per square foot and semi-custom homes a ‘floor’ of $280 per square-foot to grow from. With six fully financed properties changing hands this past month, there wasn’t a most active neighborhood.
On with THE FACTS:
a.) Six (6) properties were recorded sold in ArrowCreek between 16 August and 16 September (per the Washoe County Assessor, who appears to be current in documenting closed sales). This brings the total number of properties transferred over the past rolling year to 133 or 12.3% turnover rate for our community. This remains a low rate 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 rising economy as the summer buying season is here and ‘investors’ see an increasing value within our community.
b.) No homes 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 from late June to the end of September. The rolling average selling price for homes on the golf course now stands at $383.48 per square foot. Based upon the statistical rolling average calculation (19 homes are in the calculation. This creates a situation where a single sale above or below the average skews the data, which is what likely has taken place over past several months.), the price per square foot increased by $.23 per square-foot due to the rolling year statistical calculation. The 12-month rolling average sales price increased to $1,768,018.42, again based upon statistical methods. No additional vacant parcels were sold and the rolling average selling price for undeveloped property on the golf course stands at $356,232.51 per acre.
c.) Five (5) homes were sold that are not connected to the golf course. The rolling average selling price for off-course homes increased to $405.06 per square foot, which is up by $15.93 per square foot, based on a sample size of 61 homes. The twelve-month rolling average sales price for non-golf course homes increased to $1,463,312.44. One additional vacant lot was sold, making the rolling 12-month average selling price for vacant land, not on the golf course, standing 12.1% below vacant golf course property at $317,895.13 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 July of 2020 prices have been steadily increasing across the ArrowCreek market and across the Washoe Valley in general. Additionally, it was noted that five years ago the nominal price per square foot was $200 as opposed to where we are today.
2. Fall has arrived, and the housing market is very much alive even though water resources are getting tight. For those desiring a secure, safe environment to raise a family or to have abundant recreational opportunities, 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. 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 July 2020. Furthermore, values of custom homes within Truckee Meadows, especially those in Reno and on the ArrowCreek golf course, have managed to exhibit nearly the same value, no matter the immediate environment they are located within. However, the value of Semi-Custom homes, of comparable home and land size, indicate that both Reno and Sparks offer greater value per square foot than ArrowCreek from a pure price perspective. ArrowCreek’s value appears to lie in our gated security, quality of adjacent schools and our other amenities which amounts to a premium of $70 per square-foot for our Semi-Custom homes. Obviously, this is not true for our Custom homes as we enjoy the same ambience, but there is little price difference.
- For the past month the ArrowCreek rolling averages are:
- Semi-Custom On-Course: $370.32 per Square Foot
- Semi-Custom Off-Course: $380.27 per Square Foot
- Custom On-Course: $388.18 per Square Foot
- Custom Off-Course: $446.02 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. 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 $400.49 per square foot (Median price $1,750,000). The average days on the market was 42 days. As noted from above, you can see our ArrowCreek comparable Custom homes are selling in the same price range without a lot of differentiation. Data for separate ArrowCreek average time on market was not available. Reno homes comparable to ArrowCreek Semi-Custom homes are selling for $306.95 per square foot (Median price $850,000) with a time-on-market up four days from last month to 21 days. Median prices rose across the Reno market by 26% during the comparable past year, as you can see from the chart, while ArrowCreek combined average prices were 32% higher.
- Sparks market ‘in general’ – The top quartile in the Sparks market actually compares with the Semi-Custom homes in ArrowCreek. The average price for these Sparks homes is $249.29 per square foot (Median price $797,500) with an average of 24 days on the market. Median prices rose across this market by 21.2% during the comparable past year. For the ArrowCreek community, the Semi-Custom homes rose 40% over the same time period.
- Saddlehorn – In reviewing the records for this development, the sample size was too small to obtain meaningful information.
Commentary: ArrowCreek homes continue to be in the top two quartiles of Reno and the Semi-Custom homes are in the top quartile of Reno and Sparks. 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 and the data compiled in this report.
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 and lots are on the golf course and 39% of owners are actually members of ‘the club.’ Yes, we have a private golf club within our gated community that is not an HOA amenity, 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 ownership in ArrowCreek as Nevada businesses gather top talent with competitive salaries.
By Ron Duncan
October 1, 2021
For previous postings of the ArrowCreek property value updates: click here.