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Graph sure looks good, doesn't it?
Unfortunately, it's not a measure of appreciation.
It's a measure of "what is my home worth" in a gated community.
IE, if I took a 3/2 home in a normal non-controlled neighborhood and
plopped it down in a gated highly controlled neighborhood, would it
sell for more? Of course it would.
Why? Because land is going to sell for a premium in an area with
amenities over an area without any. Nevermind the correlation between
increased land price and increased "base price" of a home. What I mean
is, if you're going to spend more on a lot, you're more likely to spend
more on a home.
This study provides statistics that homes in an HOA (and/or gated
community) sell for a premium, which is something that I personally do
not dispute...
For me, there are two fundmental questions (in terms of value):
1) Do homes in HOAs APPRECIATE faster than homes in non-HOAs? (I am not
asking if the base price is more)
2) If you factor in the expense of that association, how does the
appreciation model compare HOA vs non-HOA.
The closest study I have seen - which has a signficant basis of homes for
study (over 15000, compares 3 things):
1) Appreciation in HOAs with foreclosure filings
2) Appreciation in HOAs with no foreclosure filings
3) Home appreciation in general.
See: http://pages.prodigy.net/hoadata/trenddist.html
The statistics suggest that HOAs that do not engage in foreclosure see
some level of appreciation over "all home" and signficant appreciation
over HOAs with foreclosures...
I am not sold on the fact that HOAs increase "appreciation" just yet (if
there are no foreclosures). Foreclosures could be associated with a
number of other statstically significant conditions, such as lower end
homes, builders that engage in shoddy financing, etc.. I am not sure...
And again, I've to ask: If my HOA dues are $600 a year, what if I
paid that $600 toward my mortgage? After 15 years, what will I net on
the sale of my home?
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Re: HOA PROPERTY VALUES IN QUESTION !!!!!!!
