HOAs Growth Rate Slows, But Income Continues to Increase

By Ryan Kwon

According to the Levy, Erlanger & Company’s latest tracked data, there was a reduction of approximately 50 HOAs in the state of California compared to 2021, representing an approximate 0.1% decrease. According to David Levy, founding partner of the Levy, Erlanger & Company, “the actual number of new associations from September 2021 to September 2022 was approximately 250. The apparent net decrease was due to the deletion of about 300 nonprofit organizations that were researched and determined not to be community associations.”

Despite the decline in HOAs, gross revenue increased from $14.1 billion in 2021 to $14.3 billion in 2022, or 1.4%.

“The increase in revenues was likely due to the modest increases in assessments during COVID and perhaps a greater number of ‘no increases’ due to COVID,” said Levy.

California currently has around 55,000 (55,350 associations to be exact) HOAs, and according to Levy’s statistics, around 66% (36,369) of those associations are in Southern California while the remaining 34% (18,981) are in Northern California.

In terms of development types, condos and condo conversions are sweeping the majority with 65% (33,620 associations) while planned unit developments remain in the minority with 34% (17,975 associations). The other 1% (3,755 associations) are cooperatives, timeshare and unclassified developments.

As house prices are predicted to drop 8% in California due to the significant rise in interest rates, “the construction of new homes will probably be fueled by demand for larger and nicer homes due to the trend of working from home, but this could potentially be somewhat offset by the number of people moving out of California,” said Levy.

Levy obtains his data for his statistics from various sources that include: California’s Department of Real Estate public reports and Secretary of State, over 1,500 Northern Californian managers, other state sources, and the internet. Annually, Levy compiles his statistics in September using a program that pulls all the necessary information for his statistics from his sources.

Levy, Erlanger & Company has been compiling its annual statistics book for more than 14 years, but began tracking the number of HOAs in California for much longer. David Levy, founding partner of the firm, has been building the firm’s database since 1985.

Ryan Kwon, Communications & Web Manager, CACM