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I've seen a trend in pro HOA posts on these forums, the sentiment that HOAs help maintain or even raise home values. The argument often follows the form that junky cars on blocks sitting in front yards lower values, so rules against them must raise values. While junky cars may only be an example, it seems like an extremely small occurrence. It's more typical for individuals to take great pride in their homes, especially after spending hundreds of thousands on it.
There are thousands of factors in evaluating house prices, to the point that we will never be able to understand the impact of HOAs through arguments, anecdotes, or hypotheticals. So I have to wonder, has anyone ever ran a statistical analysis on the effect of HOAs?
After a couple hours of research I was not able to find any definitive answers. I could find pieces such as:
Quote:
Higher [ HOA fees lead to lower property values - 2011
Quote:
http://faculty.washington.edu
Proponents of homeowner associations often cite higher property values as the key benefit of HOAs. ...
The raw numbers do not support the HOA’s case: property values in neighorhoods with HOA
filings grew at an 4.9 percent annual rate from 1994 to 2000, versus 7.1 percent in all other neighbor-
hoods
This also brought my attention to a much darker side of HOAs, beyond curtain colors and garbage cans, to the realization the residents in an HOA community run a much higher risk of foreclosure. At a time when someone is most vulnerable, out of work, injured, or just down on their luck. HOAs foreclose on owners who don't pay their dues in order to maintain home values.
Unfortunately, these are only pieces, small studies that can't be extrapolated. Nothing was conclusive and I couldn't find any real data analysis on the subject to answer the question.
So to the members of this forum who state with certainty that HOAs increase home values, to those of you who state it as common knowledge, how do you know? Was there a study I missed? Where is the report and analysis proving that HOAs increase property values?
Understand, that I believe HOAs still have value. Maintaining common areas, pools, landscaping and other amenities are excellent things that many homeowners enjoy and appreciate. I just don't see any correlation between the existence of an HOA and property values, from my perspective it's at best a wash even before you factor in dues.
Nobody likes rules when they don't benefit them. But when the lack of rules hurts them, they start crying out for help from the county or city or whatever, expecting for tax payers to fix their crybabyisms.
But what business does the state of North Carolina have in requiring it in the first place? If all the developments in an area have HOA's because that's all people buy, then so be it. But shouldn't that be market driven?
I've seen a trend in pro HOA posts on these forums, the sentiment that HOAs help maintain or even raise home values. The argument often follows the form that junky cars on blocks sitting in front yards lower values, so rules against them must raise values. While junky cars may only be an example, it seems like an extremely small occurrence. It's more typical for individuals to take great pride in their homes, especially after spending hundreds of thousands on it.
There are thousands of factors in evaluating house prices, to the point that we will never be able to understand the impact of HOAs through arguments, anecdotes, or hypotheticals. So I have to wonder, has anyone ever ran a statistical analysis on the effect of HOAs?
After a couple hours of research I was not able to find any definitive answers. I could find pieces such as:
This also brought my attention to a much darker side of HOAs, beyond curtain colors and garbage cans, to the realization the residents in an HOA community run a much higher risk of foreclosure. At a time when someone is most vulnerable, out of work, injured, or just down on their luck. HOAs foreclose on owners who don't pay their dues in order to maintain home values.
Unfortunately, these are only pieces, small studies that can't be extrapolated. Nothing was conclusive and I couldn't find any real data analysis on the subject to answer the question.
So to the members of this forum who state with certainty that HOAs increase home values, to those of you who state it as common knowledge, how do you know? Was there a study I missed? Where is the report and analysis proving that HOAs increase property values?
Understand, that I believe HOAs still have value. Maintaining common areas, pools, landscaping and other amenities are excellent things that many homeowners enjoy and appreciate. I just don't see any correlation between the existence of an HOA and property values, from my perspective it's at best a wash even before you factor in dues.
I don't believe that HOA's increase property value as well - I don't mind them though, I think for the most part, the large majority of them have common sense rules/regulations.
But what business does the state of North Carolina have in requiring it in the first place? If all the developments in an area have HOA's because that's all people buy, then so be it. But shouldn't that be market driven?
My understanding is that HOAs are now required to deal with water issues, specifically water runoff and retention ponds. Builders are required to set one up for large communities to ensure that the town/state will not have costly issues in regards to water. It's possible for the HOA to have no other responsibilities or covenants besides maintaining common areas, most just choose to throw in other random stuff as well.
Quote:
Why aren't there as many HOA's up north? Is there a reason that those states don't require them, but North Carolina does?
I believe this is the same reason. Most states up north don't have water drainage issues. They tend to have slate or sandy soil, etc. while North Carolina gets to enjoy thick non-porous clay.
Last edited by Fyzbo; 04-28-2016 at 02:21 PM..
Reason: Added up north section.
Why aren't there as many HOA's up north? Is there a reason that those states don't require them, but North Carolina does?
Do people there trust their neighbors more?
Well here a lot of the new houses are all planned communities built by contractors/builders. In my hometown of Belmont, MA we have none of that (granted the houses have been there for years but the way they were developed is completely different - not in batches). Not sure if that plays a difference.
I'm also curious about this - I suspect there may be a good reason but it may not be completely clear.
Why aren't there as many HOA's up north? Is there a reason that those states don't require them, but North Carolina does?
Do people there trust their neighbors more?
Services that are provided by HOAs in NC, are taken care of by local governments "up north". Maintaining common areas, local parks and pools, code enforcement. btw, they have the higher taxes to go with it.
Would you rather have a government tell you how you should live, or would you rather you and your neighbors agree on guidelines?
I still get fined when visiting my LI mother in law, if I leave my car in the street!
Services that are provided by HOAs in NC, are taken care of by local governments "up north". Maintaining common areas, local parks and pools, code enforcement. btw, they have the higher taxes to go with it.
Would you rather have a government tell you how you should live, or would you rather you and your neighbors agree on guidelines?
I still get fined when visiting my LI mother in law, if I leave my car in the street!
On the face of it, I would say my neighbors; but after reading that HOA's can restrict constitutional rights because you enter into a contract agreeing to it, I think I'd rather a governmental body with more accountability handle it.
Of course you shouldn't agree to a contract if you're worried about the provisions, but if you have no choice but to go with an HOA or move to a different region because of state law, then I think there's a problem.
But what business does the state of North Carolina have in requiring it in the first place? If all the developments in an area have HOA's because that's all people buy, then so be it. But shouldn't that be market driven?
I think that discussion could be one in itself, but kind of gets the thread off topic and veers a bit towards a politics forum. There are a lot of reasons a state might want to do this, partially to provide economic stability via home values and to help protect $600k houses from having trailers sitting next to them, making the state a more desirable (overall, on a wide scale, not necessarily to all individually) place to live.
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