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 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.
I’ve recently heard from one of our owners that our homes are selling for $500 per square foot. As you’ll see from the charts below, only a specific set of our homes are selling anywhere near this value. In fact, the vast majority are selling in the $430 per square foot range. Another resident told me that ‘The Club’ contributes to ALL of our home values. This is also a false ‘belief.’ If it were true, you should expect that values move consistently across our entire development, and they don’t. Also, when you look at the second graph of ArrowCreek values versus the rest of the Truckee Meadows, you’ll see that our home values are not outstanding above those in Reno, except for custom homes not on the golf course. So, be very careful in taking ‘opinions/beliefs’ as fact.
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 482 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 April 30, 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 at a nominal rate of 8 (eight) 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 20.2% certainly puts 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. These eight (8) properties that changed owners over this past month had a total value of $12.5 Million! Only one of the properties were directly adjoining the ‘golf course.’ Currently ‘non-golf course homes’ enjoy a sales price advantage of 5.4% ($24.55 per square-foot) advantage over ‘golf course’ homes, with the advantage clearly noticed, as you’ll read below, in the value of custom homes. However, it was also noted that semi-custom homes ‘on-the-course’ are showing a higher value than custom homes ‘on-the course,’ an unexpected observation. This ‘advantage’ has now spread to undeveloped land as the price, as you will also read shortly, is only 4.5% higher for property that does not adjoin the golf course. Of course, ‘raw’ property adjoining the golf course has fallen statistically ‘out-of-contention’ since only one property was sold during the past year, in this category.
Since June of 2021 and over the past twelve (12) months:
1. Custom ArrowCreek homes appear to have established a ‘floor’ of $410 per square foot and semi-custom homes an identical ‘floor’ of $415 per square-foot to grow from. With eight fully financed properties changing hands this past month, the most active neighborhood was Chantalaine.
On with THE FACTS:
a.) Eight (8) properties were recorded sold in ArrowCreek between 26 April and 17 May (per the Washoe County Assessor). This brings the total number of properties transferred over the past rolling year to 81 or 7.5% 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, 195 (18%) of us have lived or owned property in ArrowCreek for more than 16 years.
b.) One 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. The rolling average selling price for homes on the golf course now stands at $433.20 per square foot. Based upon the statistical rolling average calculation (only 12 homes are currently 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 decreased by $3.58 per square-foot due to the rolling year statistical calculation. The 12-month rolling average sales price decreased to $1,668,177.08, again based upon common statistical methods. No additional vacant parcels were sold and the rolling average selling price for undeveloped property on the golf course now stands at $361,544.79 per acre. It should be noted that there is only one (1) lot that make up this average and as a consequence, the statistical significance of this value is highly suspect.
c.) Seven (7) homes and properties were sold that are not connected to the golf course. The rolling average selling price for off-course homes decreased to $457.75 per square foot, which is down by $3.59 per square foot, based on a sample size of 56 homes. The twelve-month rolling average sales price for non-golf course homes decreased to $1,592,500.45. One (1) additional vacant lot was sold, making the rolling 12-month average selling price for vacant land, not on the golf course, standing .5% above vacant golf course property at $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 June of 2021, prices have been steadily increasing across the ArrowCreek market and across the Washoe Valley in general. However, it’s clear that prices 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. One of the stunning features of this chart is the absolute difference between non-golf and golf related homes. 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 dirth of home sales adjoining the golf course may be one such indicator.
2. Spring has sprung, and the housing market continues to be barely alive. For those desiring a secure, safe environment to raise a family or to have abundant recreational opportunities 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. From the volume of property transfers during this reporting period it is clear that the demand for a secure property environment has remained fairly constant. 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 June 2021. 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 values along with ArrowCreek Semi-Custom homes, both on and off the golf courses. However, as noted in the opening, only one home sold on the golf course in the past 3 months. Also, 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 but not from a secure and safe environmental perspective. ArrowCreek’s value lies in our views, gated security, quality of adjacent schools and our other amenities which amounts to a premium of about $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 between Reno Custom homes and Custom homes on the golf course. However, those ArrowCreek Custom homes not on ‘the course’ exhibit a $40 to $80 advantage to both internal and external Custom homes.
For the past month the ArrowCreek rolling averages are:
- Semi-Custom On-Course: $470.02 per Square Foot
- Semi-Custom Off-Course: $436.48 per Square Foot
- Custom On-Course: $396.39 per Square Foot
- Custom Off-Course: $488.26 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 $462.48 per square foot (Median price $1,833,300). The average days on the market was 21 days. As noted from above, you can see our ArrowCreek comparable golf course Custom homes are selling at a discount to those in Reno, both custom and semi-custom. ArrowCreek average time on market was 63 days. Reno homes comparable to ArrowCreek Semi-Custom homes are selling for $334.64 per square foot (Median price $950,000) with a time-on-market of 14 days. Median prices rose across the Reno market by 20.2% during the comparable past year, as you can see from the chart, while ArrowCreek combined average prices were 21.4% higher. (Note: ArrowCreek appreciation is now very much in line with the Reno market.)
- Sparks market ‘in general’ – Recently, some homes in Sparks have been identified as qualifying for ‘custom’ designation. These homes are definitely comparable to those in ArrowCreek from both a square footage and lot size perspective. The current average selling price for these homes is $298.36 per square foot (median price of $939,900) with a time on market of 21 days. The Sparks Semi-Custom market actually compares with the Semi-Custom homes in ArrowCreek. The average price for these Sparks homes is $275.60 per square foot (Median price $700,000) with an average of 14 days on the market. Median prices rose across this market by 15.8% during the comparable past year. It’s worth noting that the Sparks Semi-Custom market includes the D’Andrea market and with the revitalization of their golf course over the past two years, there hasn’t been an appreciable or corresponding increase in home values.
- Saddlehorn – In reviewing the records for this development, the sample size was too small to obtain meaningful information.
Commentary: ArrowCreek Custom 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 or a negative impact 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. Also, the ArrowCreek Homeowners Association does not, repeat does not, have a financial or any other fiduciary interest in ‘The Club at ArrowCreek (TCAC).’ TCAC is not an amenity of ArrowCreek. It is a separate and private entity.
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 that only a third of the homes and lots are on the golf course and approximately 34% 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, recreational opportunities, and the views and quietude of the High Desert. More people will come to ownership in ArrowCreek as Nevada businesses gather top talent with competitive salaries.
Please consider contributing your knowledge and energy to make our HOA better for all owners.
By Ron Duncan
May 31, 2022
For previous postings of the ArrowCreek property value updates: click here.