Green Homes: The New Black?
In today’s over-saturated real estate market, sellers looking for ways to distinguish their properties are touting environmentally friendly and energy-saving features. A recent article from Bloomberg described the measures green builders are taking to attempt to capture this market advantage. While home sales remain flat or in decline, the ability to claim certification from the Environmental Protection Agency’s Energy Star program, the National Association of Home Builders, or the U.S. Green Building Council’s LEED for Homes program adds some credibility to green status and translates to increased marketability….or does it?
What do the green certifications really mean to buyers when there may be a lack of overarching standards for the certifying entities? To earn the Environmental Protection Agency’s Energy Star certification, a home needs to be at least 20 percent more efficient than the benchmark for a standard new home. The “bronze” level of certification from the National Association of Home Builders requires adding a few features, such as low-flow toilets, energy-efficient windows to block out heat and dust, and prefabricated roof trusses. These measures – in addition to state and federal tax credits that may also apply – certainly have merit, but how do they convey value to a potential buyer?
Some industry experts believe that the absence of a clear national standard leads to confusion, preventing easy comparisons for both new and existing homes.
Home sellers, and contractors specializing in green retrofits, would do well to focus on measures that enhance indoor environmental quality along with basic energy efficiency. So in addition to swapping conventional light bulbs for CFL’s, removing asbestos, using low VOC paints, and switching to eco-friendly floor coverings, suggested practices include energy audits and working with qualified consultants to vet your green cred and tap into the possibility of enhanced marketing opportunities.
It is difficult to ascertain the connection between taking steps to green a home – either through new building or energy retrofits – and direct return on investments for these measures. According to listedgreen.com, a recent McGraw Hill study showed 81% of homebuyers would prefer to buy a green home rather than a traditional home, even in this current down economy. However, buyers’ willingness to pay a premium for green features seems to be connected to how long it takes to recover their investment than environmental concerns. Rising utility rates could well provide the impetus to elevate this as a priority that might influence buying decisions. And even if consumers are unwilling to pay a premium for energy efficient features, they may well be a distinction that helps move one property over another.