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ArrowCreek Housing Market Observations April 2012

by admin on April 4, 2012

 

ArrowCreek Golf  View

View of ArrowCreek Golf Course

 

“In the business world, the rearview mirror is always clearer than the windshield.”
-Warren Buffett

I don’t enjoy writing  posts like these,  but as this site has gone up to be number one in a couple of search engines queries about ArrowCreek community, I feel I need to write the good and the not so good about the ArrowCreek market.  I want to share the facts and share my thoughts freely and only hope it’ll help you in your investment decision.

Alright, here’s the gist: why does it seem that ArrowCreek’s housing prices are holding lower than comparable luxury communities? And why do I think home values in ArrowCreek will most likely lag  if and when the Reno luxury housing market rebounds. 

First, I want to start that this is not an encompassing sample size but primarily what I’ve personally seen out there in the market; I hope someday I can write a more in-depth research on comparing ArrowCreek’s housing prices to other communities.

Last week I showed a home in ArrowCreek that was comparable to homes  the same buyer looked at Saddlehorn and Caughlin Ranch (he was looking at the Southwest and South).  Here’s what he was looking for:

  • 3,100 – 3,300 square feet.
  • Newer home
  • 3 bedrooms
  • 3 car garage that’s roomy not cramped
  • Turn-key and ready to move in.
The ArrowCreek home we were looking at was priced at $488,000.  Beautiful home, nice layout, upgrades to the max, with the best views the buyer’s and I have seen since we started looking.

The comparable home in Caughlin Ranch was older by about 10 years and did not have as much upgrades, asking price $550,000 (price is justified by pending comparables).

The home in Saddlehorn had a bigger lot but lower square footage (-300 Sq./ft.), older by four years; asking price $520,000.

Summary:
  • ArrowCreek: $488,000
  • Caughlin Ranch: $550,000
  • Saddlehorn: $520,000
Our buyer chose the Saddlehorn listing over ArrowCreek (Caughlin was, according to him, overpriced).  And this is where it gets tricky.  Again, this is an isolated event, and is not meant as an absolute fact, more of personal observation.

I have 3 reasons why I think ArrowCreek homes are going to lag in the luxury housing recovery:
  • Too much land to build on.  Land around the Southwest area (around Caughlin Ranch, Plumas, Manzanita) is more scarce, thereby, more expensive than empty lots in ArrowCreek.  To illustrate, let’s compare vacant lots for sale in and around ArrowCreek to in and around Caughlin Ranch:
ArrowCreek (Reno South Suburban – Area 165)
– Vacant Lots for Sale: 101
– Average: $179,440
-Median: $150,000
-High: $625,000
-Low: $50,000

Caughlin Ranch (Old Southwest, and West Southwest)
– Vacant Lots for Sale: 25
– Average: $403,000
-Median: $295,000
-High:$2 million
-Low: $69,900

All markets are bound by the centuries old principle, Supply and Demand.  And ArrowCreek is not exempted from this.  There is an abundant supply of land in ArrowCreek compared to other luxury communities (perhaps Somersett, the closest one? It’s housing values also struggled mightily when the market crashed.)
  • When there is an abundance of supply of land, it would probably  have an abundance of supply of built homes for sale.

Demand is arguably lower because of the 15 mile distance to downtown Reno and highway 80 and higher HOA fees.  Not to say that there isn’t enough demand for homes in ArrowCreek, believe me, there is sufficient demand.
But I think most buyers in the $500,000 and up range would look at the Southwest area  first before ArrowCreek because of housing limitations (ArrowCreek homes rarely, if any, have enclosed walled or picket fences) and lower HOA fees (ArrowCreek has gone down to $205) per month.

ArrowCreek has one of the best golf courses in Nevada, but as the economy tanked almost 4 years ago, many golfers are now shunning high golf memberships and looks more likely to settle for second level courses.

That being said, ArrowCreek continues to be one of the most desirable places to live in Nevada and have bounced back from the internal problems from the market collapse. It’s a beautiful, well-planned luxury community. You should go see it and do additional research before passing any judgement.

Hope that helps shed some light and as always, if you need anything, I’m here for you.

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