You've probably heard the conventional wisdom: higher HOA fees hurt property values. But by how much? And does it always work that way?

After years of watching comparable properties sell for wildly different prices (often because of HOA fee structures), I can tell you the relationship is more complicated than most real estate agents admit. But there are patterns worth understanding, especially if you're selling, buying, or just trying to figure out whether your monthly dues are reasonable.

The Numbers: What Does It Actually Cost You?

Here's the rough math that real estate appraisers and buyers tend to follow: every $100/month increase in HOA fees typically reduces property value by $15,000 to $20,000.

That's not a perfect formula. Markets vary, property types behave differently, and luxury buildings sometimes break the rule entirely. But in most suburban condo and townhome markets, that range holds surprisingly well.

Why? Because buyers think in monthly payments, not purchase prices. A $300/month HOA fee versus a $500/month fee is a $200 difference, about $2,400 per year that never goes toward building equity. Over time, that compounds. Buyers discount future cash outflows, and the market reflects it in lower purchase prices.

The psychology is even harsher than the math. Buyers hate seeing a big HOA fee on the listing sheet. It triggers immediate skepticism about hidden costs, special assessments, and whether the building is financially healthy. Even when the fee includes utilities, insurance, or premium amenities, the sticker shock often kills interest before anyone reads the fine print.

Why Fees Hit Value Harder Than Mortgage Costs

You might think: "If a $200/month HOA fee reduces value by $30,000, why doesn't a $200/month mortgage payment increase do the same?"

Because HOA fees feel permanent. Mortgage rates fluctuate. Buyers can refinance. Property taxes can be appealed or may drop if the market softens. But HOA fees almost never go down. They only go up, sometimes predictably, sometimes in sudden jumps when reserves run low or major repairs hit.

Lenders know this too. While they don't explicitly reduce home valuations based on HOA fees, underwriters absolutely factor monthly HOA costs into debt-to-income ratios. A buyer who qualifies for a $400,000 mortgage on a single-family home might only qualify for $370,000 on a condo with $350/month in fees. That shrinks the buyer pool, which puts downward pressure on prices.

Appraisers, meanwhile, adjust comparables based on fee differences. If two identical condos sold recently (one with $250/month fees and another with $400/month fees), the appraiser will adjust the higher-fee unit's value downward to reflect that ongoing cost burden. It's not a line item you'll see labeled "HOA penalty," but it's baked into the adjustment grid.

When Higher Fees Don't Hurt (or Even Help)

Now for the exceptions, because they matter.

In high-end buildings (think luxury condos in downtown markets), HOA fees above $800 or even $1,200/month don't scare buyers. Why? Because those fees typically cover concierge service, fitness centers, pools, security, and sometimes even utilities. Buyers at that price point expect full-service living. A building with suspiciously low fees might actually raise red flags about deferred maintenance or underfunded reserves.

Similarly, in active adult or resort-style communities with golf courses, clubhouses, and extensive landscaping, higher fees are part of the lifestyle package. Buyers self-select into those communities knowing the cost structure upfront. The key difference: the amenities are visible, used frequently, and central to the property's appeal.

But here's what separates those situations from the typical suburban townhome complex: transparency and predictability. Buyers will tolerate high fees if they understand exactly what they're paying for and trust that the HOA is well-managed. They'll run from high fees that seem arbitrary or keep climbing without explanation.

The Resale Problem Nobody Talks About

Even if you're fine with your HOA fees today, think about the next buyer. Every year your fees increase, your resale pool shrinks slightly. This is especially brutal in older condo buildings where fees started reasonable but have crept up to $400, $500, or $600/month as roofs, siding, and mechanical systems needed replacement.

I've seen sellers get blindsided by this. They bought at $225/month in fees ten years ago, figured it was fine, and now they're trying to sell at $475/month. Comparable homes in nearby HOAs with lower fees are moving in 30 days. Theirs sits for 90, then takes a price cut.

Investors feel this even more acutely. Rental property cash flow gets hammered by high HOA fees because they come straight off the bottom line every month. I know landlords who've sold out of otherwise great buildings simply because rising HOA fees turned a profitable rental into a breakeven headache.

Why Two Similar Homes Sell for Different Prices

This is where HOA fees create the most confusion. You'll see two townhomes with the same square footage, same finishes, same school district. One sells for $340,000, the other for $365,000. The difference? The cheaper one has $310/month in HOA fees; the pricier one has $180/month.

That $130/month gap, multiplied across the likely ownership period and discounted for buyer psychology, explains almost the entire $25,000 price difference. It's not about the home. It's about the cost structure attached to it.

This is also why single-family homes in HOAs almost always command a premium over attached housing in the same area, even when the condos have better amenities. Buyers perceive single-family HOA fees (typically $50–150/month) as more about neighborhood maintenance and less about subsidizing shared building systems. That perception matters more than the actual services provided.

What This Means for You

If you're buying: Don't just look at the purchase price. Calculate your true monthly cost including HOA fees, and compare that to similar properties. Ask about fee history. If they've jumped 40% in three years, expect that trend to continue. Request reserve study summaries to gauge upcoming special assessments.

If you're selling: Be realistic about how your HOA fees compare to nearby comps. If yours are significantly higher, you'll need to price accordingly or emphasize what the fees cover. Transparency helps; surprises kill deals.

If you're living in an HOA: Pay attention to reserve funding and fee growth. Boards that defer maintenance to keep fees artificially low are setting up everyone for painful special assessments later, and that tanks property values faster than gradual fee increases ever would.

The bottom line: HOA fees aren't just a monthly nuisance. They're a structural cost that directly impacts what buyers will pay for your home. Understanding that relationship gives you leverage whether you're negotiating a purchase or deciding whether it's time to sell.