Homeowners associations (HOAs) are responsible for the upkeep and maintenance of communities, which is an integral part of homeowners association management. One major factor influencing the growth of HOAs in 2022 is an increase in housing demand.
More people are looking to relocate or buy their first home, leading to the development of new neighborhoods and communities that require HOA management.
Another contributing factor is the rising cost of living, particularly in urban areas. Many individuals and families are turning to planned communities with HOAs as a way to afford desirable amenities and a safe living environment.
Additionally, stricter local regulations on property maintenance and upgrades may increase the need for HOA oversight and enforcement.
Homeowners Associations: Retrospective and Trends
You’ll find HOAs in many places worldwide, which have been around since the 1950s. The term “homeowners association” was first used in 1950. The popularity of HOAs has been rising since then, and as a result, their number has increased over time.
The number of associations increased from about 10,000 to 223,000 between 1970 and 2000. The report estimates that around 65 percent of new single-family houses were within HOAs in 2020. Moreover, about 74 million people in the United States live in HOA communities, approximately 26% of the housing stock.
These associations come in many forms, such as housing developments, condominiums, and cooperatives. Many people choose condominiums due to the easy upkeep, various amenities, and quick access to city centers. As a result, the number of condominiums is constantly on the rise.
Will the trend continue to grow? Are HOAs expected to rise or decline in 2022?
Are HOAs Going to Continue to Grow This Year?
The prediction is associations will increase by nearly 5,000 this year. Note that this includes housing cooperatives, condominiums, and homeowners associations.
In the past few years, approximately 4,000 new HOAs popped up in the U.S.
Based on the information provided, it appears that HOAs are becoming more popular and in high demand among homeowners and developers. This trend will likely continue in the coming year as more individuals and communities see the benefits of living in a planned neighborhood with organized rules and regulations.
Additionally, with the housing market steadily improving, there will likely be an increase in new construction developments that choose to establish HOAs for their residents.
What Factors Are Impacting the Homeowners Associations’ Growth?
Residents of HOAs are already familiar with the factors that make these associations attractive. However, if you have never experienced living in those communities and do not know how they work, you might question the projected growth. You may wonder what elements affect the consistent growth of homeowner associations.
Insuring Homeowner Satisfaction
Homeowner satisfaction is one of the main reasons for the continued increase of HOAs. Most residents are satisfied with their associations’ operations, which encourages other people to take up residence in similar communities. The 2022 survey affirmed the findings of similar U.S. surveys conducted over the past four years.
According to these surveys, around 90% of homeowners are satisfied with their HOA experience. The 2022 survey showed that most residents believe that the community boards perform well in serving the interests of the homeowners.
High Demand for Housing
It appears as though housing demand has been declining for a while. However, the real estate market has boomed again since 2020, thanks to relatively low mortgage rates. What’s more, mortgage rates continue to drop, encouraging a growing number of people to buy a home.
As a result, many sellers have difficulty keeping up with the high housing demand. Even though there are a lot of new houses underway, it’s challenging to meet the housing demand because of shortages in the labor and supply chain.
Good Homeowners Association Management
Homeowners associations can only operate effectively if they have the proper management. Many HOAs, especially those that prefer a self-management approach, rely solely on their board’s expertise. That’s fine as long as they work well and the residents are satisfied.
Not every board has the professional experience or enough time for each aspect of HOA community management. However, many communities bring in professional management companies to improve their effectiveness. They can improve homeowners associations and their reputation, which leads to the growth of HOAs.
The Rental Property Market is Strong Throughout the Year
Although an increasing number of people can afford to buy a house, many tenants in the United States still prefer to rent. The U.S. rental market is solid for younger Americans and those who don’t seek a significant housing commitment.
Renting allows you to create a sense of community and get to know your new neighborhood before you invest in a house. Many developers choose to build apartments over condos or single-family dwellings. This is one of the main reasons why the growth of homeowners associations is modest this year.
Other Benefits of Living in an HOA Community
Now that you are familiar with the factors that impact the growth of HOAs, we will explore other advantages of association living. What makes homeowners associations popular in 2022? Here are the main benefits of these associations:
- Location ‒ Many HOAs, especially condos, are situated in prime locations. Generally speaking, there is access to the immediate vicinity of public transportation, restaurants, shops, schools, and city centers.
- A sense of community and stability ‒ Common areas and elements usually feature a better quality and last longer, thanks to the reserves of homeowners associations. In addition, HOAs work on keeping property values high, utilizing the enforcement of rules and the proper maintenance of common areas.
- A wide range of services ‒ HOAs offer many different services for their members, including stormwater management, road maintenance, recycling, trash collection, and snow removal. Therefore, the local governments don’t handle these things.
- Access to common areas and various amenities ‒ People who live within homeowners associations benefit from access to tennis courts, gyms, parks, pools, walking trails, clubhouses, etc. Those facilities and amenities are often exclusive to community members only.
In 2022, the growth of homeowners associations will not stop either. While this increase is modest, we can expect to see more and more HOAs in the future, thanks to their many qualities and benefits. In addition to protecting property values and providing plenty of services and amenities, these associations give a sense of stability and security.
For homeowners associations to excel, it is necessary to find someone to manage them properly. Are you an HOA board member responsible for your community association? Take it a step further and hire an HOA management company.