Assessing the Long-Term Investment Value of HOA Properties: A Comparative Analysis

This study examines whether single-family homes governed by homeowners associations (HOAs) generate superior investment returns compared to homes in non-HOA communities. Integrating asset-capitalization models with property rights theory, we analyze a comprehensive dataset of 163,000 residential transactions from Colorado’s Multiple Listing Service (2006–2024). We employ longitudinal regression analysis, validated by Propensity Score Matching (PSM) and Oster bounds analysis, to control for selection bias and isolate the HOA effect. Our findings reveal that HOA properties consistently underperform, with amenity-based HOAs yielding 1.07 percentage points less and restriction-based HOAs 0.802 percentage points less annually than non-HOA properties (p < 0.001). Furthermore, we find that HOA fees rise 1.10 percentage points faster than inflation each year. The cumulative effect is substantial: over a typical ownership period, the appreciation gap translates to a potential equity loss of approximately $143,000 for HOA homeowners compared to non-HOA counterparts. These results suggest that HOA restrictions on property adaptation and the capitalization of escalating infrastructure costs create a compounding drag on investment value.