I had this very question a few years ago. To answer the question I did an analysis of 12 subdivisions with HOA's and adjoining housing without an HOA.

We found that the subdivions with HOA's outperformed the adjoining developments by an average of 12%.

In today's market, HOA's may be of greater importance because they, if well managed, can enforce maintainace standards. With more and more homes going to rental, this can be important as one can often tell a rental by the lack of upkeep.

On the flip side, HOA fees associated with Condo developments and some subdivisions can be so high as to make the subdivision too costly. I've seen some developments where the HOA fees are in the 50-60 cent per square foot range. this can add monthly payment upwards of $1000/month and make the units unaffordable.

As with most real estate questions, the answer would be dependant on the specific property in question.

There are diferent types of homes for different types of buyers. Empty nesters or individuals who work alot or travel alot (not in today's market maby) like the idea of having the common elements maintanied automatically. While nobody like the idea of an additional monthly expense as Art pointed out a well run association usually leads to well maintained properties & grounds which are attractive to like minded buyers.

They bring the values down. Why? Becuase they reduce the market for people who are willing to buy your home. When I was a realtor most people I met refused to look at homes that had HOAs, if they aren't going to look at your home they aren't going to buy your home. The reducuction of the prospective market, subsequently reduces your asking price. Several homes in my area of PA that have HOAs also have JUST REDUCED signs attached to their FOR SALE signs and take months before they are sold. And it is a shame the houses are really nice, but people don't want to deal with the HOAs and who can blame them, this is America and not Germany throughout the 1930s.

I think it really depends on how the HOA fee for a certain HOA compare to comparable properties and what the fee covers.

For similar HOAs with similar properties where most of the features for the properties are the same, the one with higher HOA will not be able to attract as many buyers as the other one. It also depends on how high a percentage is the HOA fee compares to the price of the house. .

Having said that, when we do com parables, we may look at HOA fees, but it will not affect the property that much.

Keep in mind that in addition to compare HOA fees, you really want to read the CC&R and also look at their meeting minutes (at least 12 months) to make sure you understand how the HOA is run and their financial situation. Sometimes a poor managed HOA will have special assessment for homeowners or it will raise the HOA fee. You don't want to find that out after you bought the house.

Best,
Sylvia

A well run HOA can be an asset. In addition to taking responsibility for particular tasks, they maintain the standards of the community. Here's a counter-intuitive fact about HOA's. The association with the lowest fees might be one to avoid. It could be an indicator of low reserves, deferred maintenance, and an inactive board. Read over the financial reports and minutes. Has there been a reserve study? Are there sufficient reserves to cover the repair and replacement of big price tag items like a roof?

Most HOA's protect property values. It is important they have a good reserve and budget and their dues are kept in check. If repairs and dues get out of hand it could be a deterrent for a potential buyer.

Generally increase. They mandate standards of care and maintenance that bring values up. Ulitmately, it can vary according to how good of a job a particular HOA does.

For those that manage budgets well and keep things going well, it will have a postive effect on valuations.