As financial analysts sound the alarm bells for a possible recession in 2024, Homeowners Associations (HOAs) must heed the call and prepare for economic turbulence. ONR, the all-in-one property management software, has always been at the forefront of simplifying community management and enhancing resident satisfaction. Now, the question you may be asking yourself is ‘Do recessions affect HOAs?’
In these uncertain times, it’s even more crucial for HOAs to navigate the complexities that a recession can bring. According to a survey by USA Today, economists are pushing their recession predictions further into 2024, giving us a window to prepare.
Here are five things that will affect your HOA if we enter a recession:
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Financial Reserves Will Be Tested
A recession often leads to job losses and financial instability among residents. According to the Congressional Budget Office (CBO), the unemployment rate is projected to reach 4.7 percent by the end of 2024 before falling slightly to 4.5 percent in 2025. This could result in delayed or missed HOA fees, putting a strain on the association’s financial reserves. ONR’s accounting and payment features can help HOAs keep track of their financial health, making it easier to plan and adjust budgets accordingly.
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Property Values May Decline
During the Great Recession of 2008, U.S. home prices fell by about 30%, according to the Federal Reserve Bank of St. Louis. This can affect the overall wealth of the community and may lead to decreased investments in maintenance and amenities. ONR’s digital companion features can help maintain resident satisfaction even when budgets are tight, ensuring that the community remains attractive to both current and potential future residents.
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Increased Demand for Transparency
In tough economic times, residents will demand more transparency and accountability from their HOAs. A study by the Community Associations Institute found that 70% of residents want more interaction from their community leaders during crises. ONR’s community CRM and document portal features can facilitate open interaction between the board and the residents, facilitating the sharing of financial statements, meeting minutes, and other important documents.
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Amenities and Services Could Be Cut
To save money, HOAs might consider cutting back on amenities and services. However, this could lead to dissatisfaction among residents. According to a survey by the National Apartment Association, 76% of residents consider amenities to be crucial in their decision to stay or leave a community. ONR’s amenity booking and management feature allows for more efficient use of resources, guaranteeing that residents still have access to the amenities they value most.
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Community Engagement Will Be Crucial
A recession can either divide a community or bring it closer together. A report by the Pew Research Center found that community engagement increases during economic downturns as people seek support from their neighbors. ONR’s community calendar and association website features can help foster a sense of community, making it easier to organize events and share information, which is especially important in trying times.
Back to your main concern about whether or not recessions affect HOAs, they do. While the economic forecasts for 2024 are unsettling, preparation is key. With ONR’s comprehensive set of features, HOAs can better equip themselves to face the challenges that a recession can bring. After all, it’s not just about surviving the storm but learning to dance in the rain. Book a demo today to learn more.