Real Estate Musings
Browsing through the Daily Stats for the last 4 days, I got to thinking about HOA fees, since many of the properties that piqued your interest were condos/townhouses/lofts. I’ve never had to pay an HOA fee, but a good portion of the listings in San Francisco (578 to be exact) are condos/townhouses/lofts, which generally do have an HOA fee.
HOA fees are collected from homeowners in buildings or neighborhoods that have communal features. In a condo/townhouse/loft situation, that would be maintenance of the landscaping, exterior of the building, hallways, common elevators, roof, and other amenities (pool, gym, rec room, garage, doorman or security). Traditionally there is a board that governs the Homeowners Association and regular meetings are held for the benefit of input and governance. While there are great advantages to HOA, there can be downsides for urban dwellers, such as restrictions on what can go on a patio or deck, what modifications you can make to your unit, length of stay for guests, etc. So it is wise to read the by-laws before you place a bid on a home.
But I was seeing varying fees on the units, and wondered if size of building/complex affected the HOA rate. Looking at the 6 properties that were on the Daily Stats listings shows a range from $174 to $433.01 (and what is that 1 cent about, anyway?) Most of the listings are 2 bedrooms and 0-7 years old. The smallest building, with only 4 units, charges the lowest at $174, while the most expensive fee is paid on a mid-sized 18-unit building.
But these 6 didn’t really give me enough information, so I did an extended search, concentrating on 2BR/2BA condos/townhomes/lofts, built after 2000, priced at $600-800,000—which was the average range for the 6 Daily Stat listings. This gave me a larger picture with 25 properties. What I found is:
5-15 units 5 $350-418.63 average HOA $378.51
16-30 units 2 $322-433.01 average HOA $377.50
31-49 units 4 $308.48-385.74 average HOA $338.01
50+ units 12 $318.18-719 average HOA $497.86
Unknown 2 $379-421.37 n/a
The larger buildings charged the most to their owners, and almost 42% of 50+ unit complexes charged over $500/month. So bigger may not necessarily be better when it comes to HOA dues. How much do you pay? And do you think that your fee is reasonable?
Recent Sweet Digs Posts:
Broker4you said:
Hello Susan,
You forgot to mention that some (if not most) of the association fees include $$ that go to a “reserve fund” that is calculated on a component’s life span. An example would be roofing – they figure that in, say, 20 years the roof will need replacement and the asscociation should have the funds ready by then to replace it (when the time comes) If they do not have the funds, then they will have to pass onto the owners a huge assesment to cover the cost of replacement. The same goes for repaving, common unit water heaters, etc etc…..
Hope this helps!
December 18, 2007 10:01 AM
susan.brady said:
Good clarification. Thank you Broker4you. For those unfamiliar with HOA dues, monies collected are used for both present/ongoing expenses (gardeners, security, etc), as well as large, one-off projects such as roof replacement. The funds for the larger, single repairs are held in a reserve fund.
December 18, 2007 10:59 AM
gfw said:
Those are pretty interesting stats. Thanks for putting that together. I wonder if the high HOA fees on 50+ unit buildings are due to the fact that larger buildings have more amenities per unit or because of something else. I would guess that larger developments include things like gyms, pools and such. Small developments can’t just have smaller pools or gyms– a gym or a pool has a minimum size…
What else could higher HOAs be an indicator of? Would it reflect higher taxes on larger parcels? (Do the HOA fees cover taxes?) Maybe increased wear and tear on common spaces because of a higher number of owners per unit of common space? Higher insurance costs because there are a greater number of owners, and so more can go wrong?
December 18, 2007 1:50 PM
susan.brady said:
I definitely think that additional amenities are part of the higher cost, as many did have pools and gyms. Overall, I am not sure if that is the total reason, or if there are others. Maybe one of our SF bloggers will know, or perhaps a reader?
December 18, 2007 2:52 PM
thebaglady said:
Hey Susan, thought that you’d be interested in this story:
http://baglady.dreamhosters.com/2007/12/18/reader-email-beware-of-crappy-condo-assessment-fees/
a reader of mine sent that to me and it’s pretty awful
December 21, 2007 4:05 PM
susan.brady said:
Thanks for sending that link baglady. that is a horrific story. I have heard numerous stories such as that, although not as awful. I think it is common to have special assessments at some point in time, and it’s no worse than having to finance a new roof on a single family home. But it seems the common assumption is that the monthly fee will cover any and all expenses, which does not appear to be the case all too often.
December 21, 2007 5:19 PM