Welcome to another monthly update of the ArrowCreek community property values for our High Desert, Semi-Rural village within Washoe County, Nevada. The ‘village’ was designed to have 1,083 residences, a small residents center to include a 7/11 type store, real estate office, equestrian center and an independent, PRIVATE Golf Course as a 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). The 7/11 type store and equestrian center were dropped from plans many, many years ago. 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’ likely based upon very long-term marketing from the Golfing Industry.

The ArrowCreek community, like so many small communities in Nevada, 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 and currently, due to some consolidations, has shrunk to 573), typically for upper middle and high net worth individuals, of which 478 custom homes have or are being built. Approximately one third of all the lots, both custom and semi-custom, are directly adjacent to the golf course (~361). This report contains the data that was available on March 6, 2024, from the Washoe County Assessor’s Records. These records appear to be a few weeks late, perhaps due to lack of sales or awaiting bulk uploads.

Winter still has a grip on our high desert community and with interest rates rising, the number of properties changing owners was an amazing 6 (six) properties. This data appears to be in agreement with national publications and local real estate and banking professionals. Home price growth has also slowed and in fact, as you’ve read elsewhere, declined over the past four to eight months. Our ArrowCreek year-over-year price change is 0%. Homes on the golf course declined 6%, whereas homes not on the golf course increased 6%. An article from Kiplinger has forecast single family homes will increase 4% this year, we’ll see. ‘Raw’ property in our ArrowCreek community has fallen ‘out-of-statistical-contention.’

Since March of 2023 and over the past twelve (12) months:

1. Custom ArrowCreek homes appear to have established a ‘floor’ of $480 per square foot and Semi-Custom homes a similar ‘floor’ of $440 per square-foot to grow from. With only six fully financed properties changing hands this past month, there was no most active neighborhood.

On with THE FACTS:

a.) Six (6) properties were recorded sold in ArrowCreek between 26 January and 4 March (per the Washoe County Assessor). This brings the total number of properties transferred over the past rolling year to 46 or 4.3% 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 continues to have a very low turnover rate which may be attributed to a general satisfaction with living in our gated community. In fact, 168 (15.5%) of us have lived or owned property in ArrowCreek for more than 16 years.

b.) No homes or property were recorded sold on the golf course (where the property boundaries actually touch the golf course property, 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 (10). The rolling average selling price for homes on the golf course increased to $487.26 per square foot. The theoretical price per square foot increased by $7.01 per square-foot. The 12-month rolling average sales price decreased to $2,074,800. No additional parcels were sold bordering the golf course; however, vacant parcels are currently valued at $441,162.02 per acre.

c.) Four (4) homes were recorded sold that are not connected to the golf course. The rolling average selling price for off-course homes increased to $474.13 per square foot, which is up by $5.17 per square foot, based on a sample size of 23 homes.  The twelve-month rolling average sales price for non-golf course homes increased to $1,731,956.52 from last month’s $1,710,239.96. Two vacant lots were sold this past month, making the rolling 12-month average selling price for vacant land, not on the golf course, $388,560.87 per acre. This value is very suspect as only nine properties changed hands during the past year and, statistically, the value cannot be relied upon.

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 golf course home values had materially ‘spiked’ in January of 2023 – caused by a small number of sales directly affecting the statistics. This can happen when there are a small number of homes to average across. This appears to be the case for the entire yearly period that we have been tracking. As a consequence, values of golf course adjacent properties have shown losses over the past year (6.3%) due to the small amount of turnover. However, when the over-all trend is observed, it is apparent that our values have been decreasing, or holding steady, from January 2023. Following that time period, golf course homes have been decreasing, while off course home values have been steady to slightly increasing. Additionally, it was noted that five years ago the nominal price per square foot was on the order of $200 as opposed to where they are today. With the minimal sales on the golf course properties, a couple of thoughts come to mind. First, people are extremely happy here and don’t need or want to move on. Second, they may have had a dream of ‘making it,’ and a symbol of ‘arriving’ is the nice home on a golf course. In any case, homes are still being sold, just at lowered values and in much smaller volumes.

Another 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. With the arrival of spring and inflation moderating along with interest rate increases to cool down inflation, our housing market continues to be 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 overlooked. Yes, we are higher priced, but we are worth it!

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. A balanced marketing approach, for our community, focused on our amenities and relatively low governmental fees (ACHOA dues) 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 below it is pretty clear that home values across the Truckee Meadows have been pretty stable over the past twelve months. It is also apparent that Custom homes in the broader Reno Custom Home market are now on par with ArrowCreek Semi-Custom and Custom homes on the golf course. ArrowCreek homes not adjacent to the golf course are exhibiting better values as they appear to be slightly smaller in size. Clearly, there is no real comparison to values in the Sparks market.

For the past month the ArrowCreek rolling averages are:

• Semi-Custom On-Course: $458.28 per Square Foot (**only 5 properties)
• Semi-Custom Off-Course: $445.78 per Square Foot (12 properties)
• Custom On-Course: $516.23 per Square Foot (**only 5 properties)
• Custom Off-Course: $505.06 per Square Foot (11 properties)

• • 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 $491.73 per square foot (Median price $2,750,000). The average days on the market was 161 days. ArrowCreek average time on market was unavailable. Reno homes comparable to ArrowCreek Semi-Custom homes are selling, on average, for $360.94 per square foot (Median price $1,050,000) with a time-on-market of 84 days. Median prices rose across the Reno market by 11.7% during the comparable past year, as you can see from the chart, while ArrowCreek combined average, validated prices were flat.

• • • Sparks market ‘in general’ – Over the past year a number of 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 $289.10 per square foot (Median price of $899,000) with a time on market of 133 days. The Sparks Semi-Custom market actually compares with the Semi-Custom homes in ArrowCreek. The average price for these Sparks homes is $265.69 per square foot (Median price $699,995) with an average of 49 days on the market. Median prices fell across this market by 2.9% during the comparable past year. It is 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 has not been an appreciable or corresponding increase in home values.

Commentary: ArrowCreek Custom homes continue to be in the top two quartiles of the Washoe Valley real estate market. Semi-Custom homes continue to be in the top quartile of the same market. In an exchange with one of our readers the following conversation took place:

“Living in a gated community with an upgraded PRIVATE golf club house and courses with a thriving membership (33%) must have some impact on our ArrowCreek home values intuitively speaking. At least it is better than a shut-down golf course that impacts home values because of uncertainty. I would think that the Conrads’ and The Club’s investment in the community has absolutely made a difference in the home values, but I have no basis to make an estimate. Do you have any data?”

RESPONSE: Yes, we live in a ‘gated community.’ However, the ‘community’ is composed of a home owners ‘community’ with housing and recreational opportunities and an ‘industry,’ namely the ArrowCreek golf course (a non-residential area). The gated community designation merely means that our community provides city like services (i.e. road repair, walking path repair, snow removal, security, parks and recreation, flood control, architecture and property monitoring, etc.) to its owners/residents and the golf club business. So, the very real question is ‘How does the ‘industry’ affect our property values?’

Before we look at ‘data,’ there have been numerous National studies, based mostly on data derived from Florida experiences, that indicate the ‘contribution’ attributed to a golf club is 1 divided by X, where X is the number of feet you live from the entrance to the club. Given that ‘contribution,’ if you live two miles from the entrance (with a mile being 5,280 feet), the contribution would be on the order of 1/10,560th. A very small contribution, indeed. A more careful response needs to compare like objects, like apples to apples. With this in mind, consider ArrowCreek (AC) Semi-Custom homes not on the golf course. AC homes of this variety increased 1.3% over the past year, while similar homes in Sparks decreased by 4.9%. Semi-Customs on the golf course decreased by 5.7% while comparable homes across the valley decreased by 2.1%. Looking at Custom homes on the golf course decreased by 7.8% compared to Reno Customs which increased by 7.8%. Are these differences due to industrial/golf course development? It’s definitely unclear.

Some owners of ArrowCreek believe they reside in a ‘golf community’ and that’s fine. In fact, they reside in a small ‘village/HOA’ with governmental-like services. When you look at the chart above, you’ll notice it really doesn’t matter whether you have a golf course home or not. The values are almost indistinguishable. So the words of being a golf community appear to emanate from those who have chosen to belong to the ‘private’ golf club and that’s fine, too. 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 33% of all 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, views, recreational opportunities, good schools, near-by shopping/entertainment, excellent medical services, and the quietude of the High Desert. Realtors will continue to show prospective new Nevadans lower priced housing options but in the end people who value our advantages will settle in ArrowCreek. 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 participating in a committee.

By Ron Duncan

March 06, 2024

For previous postings of the ArrowCreek property value updates: click here.