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You are correct. The red house is in an HOA. Funny enough, the non-HOA house is worth twice as much as it's so hard to get a non-HOA house here and those neighborhoods are worth SOOO much more. I did this to simply point out that having an HOA does not always mean your house is worth more. I just wanted to correct some of these assumptions some people were making in this thread.
That's the stock answer. The REAL answer is that it helps to defray costs of road maintenance from a municipality and thus helps developers get their projects approved by town councils, etc. Since this adds additional tax revenue vis-a-vis residential property taxes but adds little in burden to the town, towns are all too happy to have HOA developments built in their municipalities.
They sell the idea of HOAs to potential homeowners by telling them it will help their real estate value, blah, blah, blah. As you will see with responses on this thread, many, many people truly and genuinely believe their HOA helps their home values. I, on the other hand, am a skeptic. A nice neighborhood is a nice neighborhood with good market value no matter if an HOA is in place or not. I've lived in both - no impact up or down on the market value of my home but living in an HOA is a lot more of a pain in the rear.
I competely agree. Some HOAs are a pain, others aren't. Most are, in my experience, and it's hard to predict which ones will be more of a bother. Rural areas often don't have them at all, but I'm speaking from experience as a resident of the states of Texas, Montana, and Alaska, so different states may be different. The only thing I found they do is mow common areas, maintain neigborhood pools many residents don't use, and attract developers other residents don't want. And of course there are the ridiculous rules.
If you want the skinny on the HOA in your next potential home, ask the neighbors. You will be more likely to get honest answers. The information you receive should be a factor on whether or not you choose to move there. HOAs can really interfere with your happiness in some instances. Conversely, they can improve it, if they keep the neighborhood looking nice and morale up on the sidelines without bothering the residents too much.
But, one is considered more desirable than the other. Might have to do with the school district or the traffic flow or just the ingrained perception that one is "tonier" than the other. Or it could have to do with an older more established neighborhood being more preferred than a newer more recently established one. If you polled 10 people in your location that don't live in either neighborhood, but have lived in the area for long enough to be aware of what are considered the "best" areas, what which one would they choose to live in if money was no issue? That answer will reveal which location is more desirable.
And what you or I or anyone else experiences in our little part of the world is, at best, anecdotal to the discussion of whether HOAs increase or decrease property values.
Same school districts. This entire area is considered "tonier" because it's an expensive area near the beach with fantastic schools. Those 10 people would likely be about evenly split. Some might prefer the Old Village, the neighborhood of the first home because it does not have an HOA and generally homes are worth a lot more but others might prefer the second because they can get more house for their money and don't mind the HOA. Yes, the Old Village is older but that's the reason it's not in an HOA. What's happened there is that people bought the old houses there, tore them down, and built new. So, older neighborhood being relative here. They're even equidistant to the water, a big selling point here.
It is anecdotal, absolutely, and thus those on here saying HOA always means an increase in property value are wrong because of these types of instances. All real estate is local and for some areas, being in an HOA does not necessarily equate to an increased value. That's all I was trying to demonstrate - that a blanket statement cannot be applied to HOA's impact on real estate value.
You are correct. The red house is in an HOA. Funny enough, the non-HOA house is worth twice as much as it's so hard to get a non-HOA house here and those neighborhoods are worth SOOO much more. I did this to simply point out that having an HOA does not always mean your house is worth more. I just wanted to correct some of these assumptions some people were making in this thread.
The house number was a giveaway. The top one doesn't have a visible house number and that's usually low hanging fruit for HOA fines so they like to have that as one of their enforcement items.
I lived in Florida and our HOA became much worse when turned over to a management company. You could tell they had a system worked out where everyone would have to powerwash their roofs one week and then everyone would get a letter for edging/cleaning flower beds 2 weeks later. We had a fellow move into the neighborhood who was a retired wildlife photographer. He planted a variety of beds designed to attract certain species of butterflies and hummingbirds. The HOA made him remove them and replace with sod. It was very sad.
Anyway, suburban HOA's are just a vehicle for passing on development costs from the corporate builders and municipalities to the property owners. They usually have a defined expiration date but most boards elect to continue them beyond their intended payback lifespan due to most of the various reasons listed in the previous comments. The only way to dissolve them is to be part of the board and, baring a coup, it's rare that someone is elected to an HOA board with dissolution as a platform.
Condo HOA's are a different animal as they have to cover overall structure items like windows, roof, mechanical etc. Special assessments for those things are especially problematic for those not expecting the additional expense.
Bank appraisers don't increase a property appraisal because of an HOA. they go by sales records like the realtors do as that's the only thing that matters.
I now live in Texas in an area originally developed as part of the city charter so there's no HOA. The city has it's own enforceable standards which cover lawn maintenance and community safety concerns and that works out just fine.
Same school districts. This entire area is considered "tonier" because it's an expensive area near the beach with fantastic schools. Those 10 people would likely be about evenly split. Some might prefer the Old Village, the neighborhood of the first home because it does not have an HOA and generally homes are worth a lot more but others might prefer the second because they can get more house for their money and don't mind the HOA. Yes, the Old Village is older but that's the reason it's not in an HOA. What's happened there is that people bought the old houses there, tore them down, and built new. So, older neighborhood being relative here. They're even equidistant to the water, a big selling point here.
It is anecdotal, absolutely, and thus those on here saying HOA always means an increase in property value are wrong because of these types of instances. All real estate is local and for some areas, being in an HOA does not necessarily equate to an increased value. That's all I was trying to demonstrate - that a blanket statement cannot be applied to HOA's impact on real estate value.
I specifically said "if money was not an issue". There are many neighborhoods I'd love to live in, but my budget has other ideas! If you removed money as an obstacle, how many would choose the first home and how many the second? That's the true measure of what neighborhood is more preferred, not what they would choose given their monetary constraints.
I'm researching buying my next home. I'm pretty sure I want a condominium, but I'm not completely ruling out houses, either. Over time, I learned that tract home subdivisions almost always have a home owner's association (hereafter: HOA). Houses on traditional gridded streets usually don't have one. So far, I'd prefer not to have one. It's easier to deal with just one set of cops (city) than two (city + HOA).
In the research process, I've read plenty of horror stories about HOA's. The horror stories were plentiful, ranging from having to fix a broken window (reasonable, even good) to paying a $50 fine for a newspaper left out in the yard (stupid). In that light, it seems like HOA's are just a nuisance, run by people with too much time on their hands, who were bullied in school, and are now delighted to make other people's lives more difficult, not to mention play favorites with certain residents. Plus, charge X dollars per month for the privilege of that. True or not, don't shoot the messenger; I'm just posting what I read in other sources.
But there has to be some tangible purpose to HOA's. Otherwise, they'd be disbanded long time ago. So what do HOA's actually do? What benefit do they provide for residents, outside of enforcing rules? Either way, if I were to buy a house and not a condo, I'd buy one that doesn't have an HOA. But I'm still interested in finding out about its role.
I hate(d) HOA's myself and broke my vow never to live in one. The one I'm in now is not intrusive and militant about crap.
Basically, ask around and see just how strict the HOA is.
There are far more horror stories about neighbors with sh*thole houses and dogs etc. than there are bad HOA stories.
I think that if you have a relatively laid back HOA then that's the best way to go as opposed to not having one at all.
There is a website called neighborshame.com that will show you plenty of horror stories.
I specifically said "if money was not an issue". There are many neighborhoods I'd love to live in, but my budget has other ideas! If you removed money as an obstacle, how many would choose the first home and how many the second? That's the true measure of what neighborhood is more preferred, not what they would choose given their monetary constraints.
Well, the value of the non-HOA house is more and thus could be construed to be more desirable but the question is why. Both neighborhoods are very nice to live in, both are considered "tony", both are the same school districts, both are in the same town, both are the same distance to the water. The biggest difference between the two is one is an HOA with all that implies (amenities, rules, etc), and the other is not (no amenities, no HOA boards, etc). Yet the non-HOA house is worth far more. For this area, since there are almost no homes not in an HOA, those non-HOA homes are worth far, far more.
Well, the value of the non-HOA house is more and thus could be construed to be more desirable but the question is why. Both neighborhoods are very nice to live in, both are considered "tony", both are the same school districts, both are in the same town, both are the same distance to the water. The biggest difference between the two is one is an HOA with all that implies (amenities, rules, etc), and the other is not (no amenities, no HOA boards, etc). Yet the non-HOA house is worth far more. For this area, since there are almost no homes not in an HOA, those non-HOA homes are worth far, far more.
Perhaps the nonexistence of an HOA is, in part, why the homes are more valued. But, it's more likely that they are older, better built, have more mature landscapes, bigger lots and are unique where newer homes are not. And then there's the intangible, but very real, phenomenon where people decide that area is "it". Or they perceive that neighborhood is where all the "best" people live. Who knows? I have no idea whether some neighborhoods I would love to live in have HOAs or not. Nor do I care one way or the other. And based on how quickly they sell and the dollars they sell for, neither does anyone else.
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Rain check on Potted Meat?! I have crackers....
