Thursday, May 18, 2017

HOA fees

I was checking out a new listing today at Opera Plaza and the monthly HOA fee of $950 caught my eye.  Seems like only only yesterday (but in reality it's been ten years) HOA fees in that building were in the $500-$600/mo range for similar sized units.  And, of course, those fees do not include parking and they aren't deductible in the same way that mortgage interest is.

It turns out that there are 68 currently available units listed in the MLS that carry HOA fees of over $1,000/mo.  Of those, all but two have an asking price of over $1,000,000.  21 do not include parking.

Another 71 listings have HOA fees ranging from $800-$999/mo.  112 listings have HOA fees between $500-$799 and 170 listings have HOA fees under $500/mo.

High HOA fees aren't entirely a bad thing.  In some ways they may indicate a very well run homeowners association keeping up with repairs, maintaining healthy reserves, avoiding costly special assessments and, possibly, providing a lot of services such as a staffed lobby, concierge, swimming pool and elevators -- all of which contribute to HOA costs.  Very low HOA fees can indicate an association without adequate reserves, very few services and possibly deferred maintenance and minimal reserves.

As HOA fees increase as a percent of your overall monthly housing costs it's all the more important to review the HOA disclosure documents to make sure you understand why the monthly fees are what they are and to get insights into likely changes in the future.

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