“How is HOA not tanking home values? Who in their right mind would want to pay money for some Karen to tell them how to live? Sounds like a living hell to me.” is just one of the comments on a recent YouTube video by CNBC that provides us with a report that delves into the intricacies of homeowners associations (HOAs).
In the video, we are brought up to speed on these organizations’ extensive role in modern real estate.
The discussion reveals a mix of some positive aspects and a larger number of negative experiences, prompting us to contemplate the impact of HOAs on property ownership.
The video begins with a startling statistic: a staggering 84% of newly built single-family homes sold in 2022 belonged to homeowners associations. These associations, mandated by certain local governments, aim to offload municipal responsibilities and ensure community-wide adherence to rules and regulations.
While HOAs ostensibly provide value to property owners by managing communal responsibilities, the video acknowledges a growing backlash stemming from negative homeowner experiences. The video features testimonials from individuals who, initially excited about joining a close-knit community, found themselves entangled in what they describe as a “horror story.”
It is emphasized that joining an HOA involves a trade-off, as homeowners may inadvertently sign away certain civil rights. The video explores the dichotomy of opinions on HOAs, with one of the guests, Jeff Ostrowski, likening it to personal preferences such as the divisive choice of anchovies on pizza. Well, we’d say that the question of HOAs holds a bit more significance than that one.
A significant portion of the discussion centers on the financial aspect of HOAs. The video shows that these associations are typically run by a board of volunteers, overseeing communal responsibilities and ensuring adherence to rules. Homeowners contribute to an HOA fund, with monthly fees ranging from $200 to $300 in the U.S.
However, the video takes a turn as it recounts the experiences of a couple, the Inostrozas, who faced significant challenges with their HOA in Newnan, Georgia. The couple encountered numerous issues, including fines, liens on their home, and wage garnishments. Despite paying substantial amounts, they claim their balance remains unsettled.
The video delves into the power dynamics within HOAs, highlighting the authority of boards to issue fines and enforce rules. The Inostrozas case exemplifies the potential pitfalls homeowners may face, with fines accumulating and legal battles ensuing.
In the pursuit of transparency, other homeowners in the community, Jessica Navas and Matt Bazan, launched investigations into their HOA’s financial practices. Their efforts uncovered a history of foreclosures in the community, prompting them to advocate for more transparency and accountability.
According to research, 57% of homeowners polled disliked living in an HOA, and more than 3 in 10 homeowners believe that the HOA has too much power. The video’s highest-rated comment agrees: “There should definitely be more laws regulating HOAs.”
Moving on, the video explores the debated impact of HOAs on property values. While some studies suggest that HOA homes may cost at least 4% more than non-HOA homes, the video presents an interesting perspective. Whether HOAs contribute to increased property values or the community enhances the neighborhood’s appeal is questioned.
As the discussion in the video unfolds, the role of management companies hired by HOAs to handle day-to-day operations is examined. The narrator acknowledges the need for a balanced approach, emphasizing that both the management company and the homeowners’ board play essential roles.
People in the comments, however, are firmly against HOAs: “Based on our previous home we told the real estate agent “NO HOAs!!!” It worked out great. Sure, my neighbors have big RVs and trucks, but that didn’t stop our house prices from doubling.”
The video concludes with an exploration of the broader issues surrounding HOAs, including the limited regulatory oversight and challenges homeowners face when seeking dispute resolution. While some lawmakers in certain states have introduced policies to address these issues, the video suggests that grassroots efforts and homeowner involvement are crucial for change.
In presenting a diverse array of perspectives, the video leaves viewers pondering the complexities of HOAs and questioning their role in modern real estate. As homeowners continue to navigate the challenges these associations pose, the debate surrounding their efficacy and impact on communities remains a central topic in real estate discussions.
As one commenter bluntly puts it: “We are basically giving control of our homes over to a corporate board staffed by Karens. How are the American people allowing this? We’ve definitely gone soft.“ Do you agree?