Across the country, the housing market has been quite a story. From skyrocketing values and record low inventory to the latest seasonal results that signal ongoing interest rate increases and cooling purchase activity – the housing market continues to be a hot topic.
All these changes in the housing and mortgage market also impact the state of U.S. condominiums and homeowner associations (HOAs) throughout the nation. In this blog post, we look at some of the key predictions and trends from various industry experts.
The Outlook: Modest Growth
The Foundation for Community Association Research, which is an affiliate organization of the Community Associations Institute (CAI), undertook considerable research into the subject of growth for U.S condominiums and homeowners associations. In data published earlier this year, the findings show modest growth for new condo and HOA communities by the end of 2022. Their conclusions included an increase of 5,000 new properties in total throughout the country.
National Mortgage News shared more of the individual data from CAI’s research arm, noting that the number of U.S. community associations were 355,000 in 2020 and that this number grew to between 356,000 and 358,000 by the end of 2021. To provide context for this growth, total new association builds only increased by 4,000 in 2019 and 2020. Also, states with the most community associations are California, Florida, Texas, and Illinois.
Variables of Influence
Beyond just gauging home values for your community, it is important to study the larger housing environment to see the impact it can have on HOAs and condominium associations.
In the current market of record high property prices, many of the younger generations – Generation Z and Millennials – are opting to wait on buying their first home. They are not prepared or willing to pay the current prices or rush to commit as interest rates rise. Instead, they are focused on continuing to rent, which is driving the trend to build more apartment and condo communities.
Although construction has picked up in many places around the country to provide for housing demand, it has yet to keep pace with what’s needed for interested homebuyers.
The Foundation for Community Association Research plans to release further data this summer.
A Popular Choice for Home Ownership
With amenities and a sense of community, HOAs and condo associations continue to be a popular choice for homebuyers of all ages. From single buyers to those starting families to retirees, the 2020 Homeowner Satisfaction Survey, conducted by Zogby Analytics on behalf of the Foundation for Community Association Research, reports a positive living experience:
What This Means for Managers
As communities are developed, a choice must be made between whether to go the route of property management or community association management. The main differentiator is that property management works with owners and operators and HOA/condo management partners with volunteer boards.
While Property Managers focus on working with tenants and reporting directly to the owner of a rental unit or units, Community Association Managers are hired by an HOA or Condo Association’s Board of directors and work for the Board and the homeowners.
Tasks are only similar when looking strictly at basic maintenance duties. After that, the differences are striking. Community Association Managers oversee all business operations and apply comprehensive knowledge of business and applicable laws to serving these communities. This level of expertise can assist with the complex issues that impact today’s HOA and condo communities, such as pandemic mandates, deferred maintenance, and Board conflict.
More Info to Come
With so many variables influencing our industry, it’s good to be part of a larger community that can share insights and provide resources that help every member succeed. To find out how your management team can benefit from joining a co-op, learn more about how Innovia can help.