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Unfortunately, in competitive markets like the Bay Area, HOA neighborhoods are the only option available to you in your price range for most people starting out. Your other options are to rent, or to move to a location far from where you work. (Or to live with your family if that is available to you, and all parties agree on it).

Now, of course, if you can and prefer to permanently work remotely, then moving to a further location from where you work may be a good option for you. But then you will have to consider the risk of you being able to continue to have a job that allows permanent remote work.

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What competitive Bay Area markets are you referring to? We've bought here a couple times, and although we looked at a few properties that were part of a 3-5 unit "HOA", most of the homes we saw (and both of the ones we bought) were not anywhere near HOAs. In fact, we currently live on a street that is not a public road, but which is apparently maintained by neighbors without resorting to an official HOA.

Where are the HOAs around here?

I guess it depends on what your price range is. For most people starting out, the price range is generally less than $1M. At that price, you will generally only have townhouses or condos available to you, which will generally have HOAs. It sounds like the properties you have been looking at are more akin to "multi-tenant" units in which it is much easier for all owners to collaborate. The properties I'm referring to are those with many more units, and in these communities, an official HOA is usually already set in place long before the first unit was purchased (agreement already set with the builders).

That said, I should probably qualify my original comment with "Bay Area within 1 hour of typical office locations in the Bay Area on typical rush hour commute". Here, "typical office locations" will include San Francisco County, San Mateo County, and Santa Clara County. This then limits your property locations to San Francisco County, San Mateo County, Santa Clara County, and Alameda County. In _these_ locations, $1M can generally only get you a condo or townhouse with many units (at least the last time I checked).

I guess I think of HOAs as being organizations that are not necessary and that govern single-family homes. Townhomes that have adjoining roofs and condos that have shared roofs/elevators/hallways/etc. require some sort of governance to handle maintenance of common areas.

It's true that the most egregious complaints about power-hungry board members can be similar among HOAs and condo/coop boards, but in my mind HOAs are different in that they are not strictly necessary.

I would agree that in the areas you mention, $1M doesn't cover a single-family home, or even undeveloped land for a home. But I would guess that many first-time buyers in this area actually buy homes that cost a good deal more than $1M, with cash from IPOs or acquisitions. We got new neighbors after the FB IPO and the Nest acquisition, for example.

Indeed. If I buy (as a first time homeowner), it’ll be for 2-3m. Our next door neighbors are first time homeowners and bought for $2m (not including the $200k+ in renovation costs).

I’m pretty sure the people buying townhouses aren’t just people trying to get into the market but also people who will not likely be able to afford more. The gap between a townhouse and a decent standalone house is still a large gap and it only gets wider as time goes on. Thus it becomes even harder to go from townhouse to sfh even if you already own a townhouse...

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