Gated Communities: What are they worth to Sacramento Area Buyers?

Does a gate around a community add value? Can you sell a property for more if it is located inside a gated-community as opposed to outside of the community? Do you think that buyers consider a gate as a feature worth paying a monthly HOA fee for? Does an enclosed community attract some people while turning others off? And a sociological question to ponder just for fun, why is there a gate? 

The best way to determine if there is a premium for the gate is to analyze recent and past sales, run data, talk with Realtors, investigate properties within and outside the community and interview home owners among other things. This is part of the normative appraisal process. It would be nice if there was a simple formula to apply to determine the value or lack thereof for a gate, but that just isn’t the case.

No Recent Sales in a Gated Community?  Sometimes recent sales within the gated community are not available – maybe because of the small size of the community or other factors which may also be important. One must always ask why there are no new sales. Is there litigation preventing new sales? Is there a reason why buyers in the market are turned off by the community? Is there some sort of environmental concern? 

In today’s market, some HOAs are actually suffering because of the vacant houses due to foreclosure and/or residents not having the extra cash to pay their monthly HOA fees. There are even some reports of HOAs going bankrupt. Could this impact value or be the reason why there are no recent sales within a planned HOA community? Could it be worth investigating how the HOA is doing if you are a buyer?  

This is a photo of the gated ”Whitney Oaks” neighborhood in Rocklin, CA. There are a series of gated communities throughout this area.

There are many questions to ask when it comes to something simple like a gate. This is part of the job of an appraiser – to ask questions throughout the appraisal process and get answers. So with all this being said, do gates really matter in terms of value? Sometimes. Sometimes not. It’s really not a black and white issue. 

If you have any questions or potential appraisal needs in the Sacramento area (or Whitney Oaks in Rocklin), feel free to contact me at 916-595-3735 or www.lundquistcompany.com

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