I started attending house concerts over 15 years ago. They were hosted by a friend I knew from the local music clubs (north Dallas area, at the time). The first performer I saw was an artist that I knew, but most of the performers were new to me. As it turns out, this just didn't matter.
For me, the lure of the club was always the music, but there is nothing more disappointing than struggling to hear the music over the club noise. Artists tend to get to a place where they are "just getting through the gig" in this situation. There's little point in trying to relate to an audience that doesn't realize the song has just ended. Artists, on the other hand, want to engage with the audience, to feel that their performance is the sole focus of the assembled group. House concerts provide that opportunity, and the artists' perception of this usually results in extraordinary performances.
In addition, a house concert venue effectively removes all constraints from the performers. If they want to try out a new tune (or even a new instrument) to gauge our reactions, we will be treated to new music before anyone else hears it.
Finally, a well-promoted and well-attended house concert will offer the artists a much more rewarding event than a typical "public" event, such as a bar. Since we turn over 100% of the proceeds to the artists, and we schedule our events at a time (Sunday afternoon) when they usually have nothing else planned, it can be a real bonus and most artists really do treat house concerts as very special events.