Of course, the answer is "it depends"

If the houses in the back of the subdivision have consistently held their value above the other homes (with the current differential), I would think it would be OK.

If the homes in the back have historically been $20K more than the homes in the front, no way.

The answer is always "it depends". Is it a new or established subdivision? Do you have children or seniors who rely on neighbourhood services (schools, transit, etc)? What type and size household are you? Is it a natural or manmade lake? Does the neighbourhood have a good vibe to you when you walk around? Are the HOA rules to your liking (or, at least, not onerous)?

I prefer living in a mixed neighbourhood of households in different stages of life and different styles, but YMMV.

If you like (or at least can tolerate) the HOA, and you like the lakefront house and its location in general, and can afford it, then I'd buy it in a heart beat.

I know of several communities where there are different levels or "price points" (I hate that term but can't think of a better one at the moment). I would suspect the generic you never want to be the most expensive house in the neighborhood is not taking into account lake front status.

Water front homes are generally more expensive than a similar house in the same neighborhood not on the water. The fact that someone drew an arbitrary line around the place and made it an HOA notwithstanding.

Generally speaking I feel like 10% of the houses all in a specific location within the development is not the same as a standalone house in a neighborhood where all values are lower.

The way you have described the subdivision, the price points are not comparable and there is no need worry about it. Many or most new large planned unit developments in the U.S. are designed for a mixture of housing types. Common is to have a small enclave of large "estate" style properties (that which you are considering), mixed in the same subdivision as smaller single family, duplex, townhome, and sometimes 55+ Lifestyle, apartments, or low-traffic commercial. Each style is congregrated in distinct "districts" or "neighborhoods" within the whole planned unit development, each with their own visual feel yet connected by trails or walks or dedicated green belts. It is similar to how most cities are zoned when you have commercial, single family, industrial, and multi-family areas in separate parts of the city, but at a more micro scale.

Thank you, everyone! I should have also said that I'm buying this house as an investment property with the possibility of living in it at some point later on.

This is a new, large subdivision and about 10% of the homes are slated to be higher priced though not all but many will be lakefront. Thing is, you have to drive through the beginning of the subdivision and many of the homes there--all new homes--are already not being kept up so that concerns me. I don't mind being in a mixed neighborhood but if I had to sell the house, I'm worried that a buyer driving through the subdivision might not like the beginning of hte subdivision--being that it is already beginning to look a little neglected--and not bother to drive to the back of the subdivision to see the house I'm trying to sell.

There's a lakefront neighborhood similar to what you describe located not too far from me; in fact, I looked at house on the periphery of this particular neighborhood. It's a dump, and putting large, expensive houses into it isn't changing that -- you still have to drive thru the run-down diddle-lee-dee houses with rusty pick-ups parked on the front lawns, and that pulls down the value of the shiny new stuff.

Ah-ha. Yes the added info would make me give pause too...

Hard to know, without knowing so much more about where you are, what other options you may have, just how bad "not kept up" is, etc.. It would be concerning to me that people are already letting brand new homes look ratty - but again, every neighborhood tends to have a few of those too. Are they truly looking dumpy - like in the example mxk posted above? Are we talking just 1 or 2 homes, or is for some reason the whole enter front part going to heck in a handbasket? What do other HOA communities around you look like? (Is this one better, worse or about the same...?)

I understand your worries about resale. That may be what would cause me to reconsider too.

Mxk3, that is exactly my concern although the houses are all new in my described subdivision so none of the houses could be described as a dump. However, I think the difference in price point and the desire for cohesiveness governed by the HOA emphasizes the differences between the sets of homes. Pride of ownership shows more with higher priced homes.

There's a difference between a handful of run-down houses in any given neighborhood and the majority of the neighborhood being dumpy. Big difference.

Evaluating the area where you'll be living is important. I don't want to live next to an adult bookstore, a mobile home park, or whatever I deem undesirable if I can afford not to, and I wager the majority of home buyers would agree.

I think the key is to find out what the HOA rules say about the appearance of the exterior of the houses, what you are allowed to have outside and so forth. I know someone who lived in one that you could not even hang a wet towel over the railing of your own deck. I know someone who lived in one where you could not leave cars out in the driveway overnight without permission, they had to go in the garage.. On the flip side, some HOAs exist only to have some sort of funding for some very basic upkeep of common infrastructure.

The other aspect is HOAs don't really have any teeth in terms of enforcement, lots of times--they can impose fines or sanctions all they want, but collecting them is not easy.

I lived in one where the owner paid the HOA fee once or twice, (and it was significant, it was a complex, not houses) and she lived there for almost ten years. So she missed over 100 HOA monthly payments and short of spending a lot of money trying to sue her nothing could be done. She knew it was cheaper for the association to let her get away with it than it was to hire attorneys. Eventually she defaulted on her mortgage and was out because of that. Some of the fees were recouped from the sale of the unit.

Sure, I'd buy it. One suggestion, if you are part of that HOA, make sure there is no right of way to the water, so any, or all of the 300 home owners, don't use your yard to take a swim, set up a fire pit and enjoy a barbecue.

Again, thank you everyone.

judianna20, there is no right of way to the lake through the subdivision but there is access to the lake outside of the subdivision, though that access is quite a distance away. I highly doubt anyone would be able to camp in my--or any of my neighbors'--backyard. We own the land up the water's edge.

Despite the lure of the beautiful view, I'm thinking of not purchasing the home as an investment or as my residence because the real estate market is starting to show signs of cooling. And my concerns about driving through the front of the subdivision (this is not a gated subdivision), means a lagging market may--probably will--slow construction. If that happens, I would be looking at 2 to 3 years of driving through construction of the other homes to get to this house. I think that's why the beginning of the subdivision, which has smaller lots and is almost completely sold but have some yet under construction, is a little neglected looking. The owners of those homes must have a tough time keeping their yards neat and free of weeds when there's construction around or even next to them.

What you consider "neglect" may be just under-construction homes waiting for sod. And bicycles and stuff left out that didn't fit in the tract-sized garage while it is full of boxes as they are slowly moving in. What you see is unknown to us, but it sounds like you passing on this opportunity is better for you. Besides, a smaller home, actually the townhomes you say are in neglect, would be better candidates for the rental market than a large "estate or executive genre" home.

Who is your target renter? Would this house, the HOA, the fact that the house is in a subdivision, and the surrounding neighborhood appeal to them? Do they appeal to you?