Green Homes Are in Demand
Earlier in the last decade, the real estate industry started on the path to understanding the importance many of today’s consumers are putting on ‘green’ building. With the collapse of the market later in the decade, the industry became more concerned with survival. But recently, home builders are seeing an increase in movement to environmentally motivated buying decisions. Once again, Green homes are in demand.
According to McGraw Hill Construction research dating back to 2006, the green home building market most rapidly accelerated during the housing downturn when builders experienced in green remained in business at higher proportions than those not knowledgeable about energy-efficient and green home building.
However, as the housing market is beginning to stabilize, we are seeing an increase in movement to environmentally motivated buying decisions. Once again, Green homes are in demand.
In conjuction with NAHB, National Association of Home Builders, McGraw Hill Construction has conducted four studies since 2006 on the demand for green homes. In a recent Wall Street Journal article they reported on the future opportunity in green new construction:
“Green sales are increasing. In 2011, these homes made up 17% of residential starts by value, up from 9% in 2010, according to the latest McGraw-Hill survey of members of the National Association of Home Builders trade group. That figure is expected to hit between 22% and 25% in 2013.”
Recent Green Home Study
The results of the latest study by McGraw Hill Construction were released in 2014, revealing the business benefits of green building:
Competitive marketing advantage: 51% of builders and remodelers find that it is easier to market green homes, up from 46% in 2012 and 40% in 2008.
- 68% of builders (up from 61% in 2011) report their customers will pay more for green, with 23% reporting that their customer will pay more than 5%
- 84% of remodelers report the same (up from 66% in 2011), with 55% reporting their customers will pay more than 5% for green features.
Customer willingness to pay for green features:
- 94% would recommend a green home to a friend.
- 92% would purchase another green home.
- 71% of respondents believe that green homes are, overall, of higher quality.
- 55% knew their home may have cost more than a non-green home, but believed the benefits outweighed the cost.
What does this mean to Frederick homeowners? If you are considering updating your home, look towards green appliances, amenities and improvements. Green homes are in demand, and the demand will increase. Plan to give your home the greatest appeal when you do consider selling.
You will need to do your research to see if the more expensive upgrades are worth the investment. Over-improving for your market is never a good idea, and that goes for environmental upgrades as well, that is, if you are expecting to get a return on your investment.
If you are selling your Frederick Home, give special attention to green updates and highlight them in your marketing. If your green updates have lead to low energy bills, for instance, highlight the fact in your marketing. Publish your bill and place it conspicuously in a brochure. Help your home stand out from the rest and appeal to the largest number of buyers.
Benefits of a Green Home
A modern efficient home is constructed with a lot of thought given to the materials used in construction. Building materials are expected to be toxin-free, sustainable and energy-efficient. The use of toxin-free building materials helps combat indoor air pollution. Since we are exposed to the air in our homes as much or more often than outside air, indoor pollution can pose serious health risks to residents. A healthier home means fewer visits to the doctor and hopefully fewer respiratory problems.
Besides potential health savings, the net cost of owning a green home is typically comparable to, if not cheaper than a standard home. People who live in green homes save money by consuming less energy and fewer resources than standard homes. The savings add up over the years in decreased energy and water bills.
For Further Reading: Benefits of Green Home Building The typical household spends about $2,150 a year on a residential energy bill. Multiply that by 30 years, and the lifelong savings can easily be greater than the initial outlay.
Net-Zero Homes in Frederick
Right here in Frederick, net-zero homes are being built by Lancaster Craftsmen, a Middletown builder. Net-zero homes are just a small portion of the green homes that are being constructed today. Federal tax incentives are helping to fuel the number of green features like insulation that reduces a home’s energy loss or geothermal heat pumps. Depending on where they live, homeowners can also claim rebates from their state, town or utility.
More and more insurance companies are offering discounts on policies covering green homes. Similarly, there are even a few mortgage companies offering discounted loan rates for home buyers buying green.
Costs of Green Homes are Coming Down
The cost of building a home with green features and energy saving materials used to be 10% or more above the cost of traditional construction, but that cost is coming down. Some builders are building green homes for as little as 2% to 3% more. As green features become more in demand and more commonplace, builders and designers are also starting to incorporate them even into moderately priced homes.
A green home is often more durable than standard homes because of its high-quality building materials and construction processes, requiring fewer repairs.
The value of a green home is often higher than that of a comparable standard home, and even though green homes are in demand these days, the market demand for green homes is expected to rise even more. Study after study shows that home buyers are willing to pay a bit more for a green home, knowing that the return on their investment will be significantly lower energy bills for years to come.
Local, state and federal governments are increasingly offering tax breaks and incentives for building a green home or adding green features to an existing home.
Features of a Green Home
Efficient plumbing and bathing fixtures, drought-tolerant landscaping and water-conserving irrigation systems help green homes use less water than standard homes. This feature will become increasingly important as the prospect of water shortages loom in some parts of the country.
Because many green building materials incorporate significant recycled content, they require the use of fewer natural resources. The amount of excess building materials dumped in landfills is significantly less than the amount generated by traditional building practices.
Some green homes incorporate carpets and floor tiles from recycled materials, like tires and bottles. Other homes use salvaged materials or renewable and sustainable products, such as bamboo, hemp, and soybean. Homeowners can choose countertops made from recycled street lights and other recycled glass.
Low-volatile organic compound paints and finishes inside the home reduce exposure to toxic chemicals. Hardwood floor finishes have changed over the recent years to those with lower off-gassing and less toxic formulas. Formaldehyde-free insulation also insures fewer dangerous chemicals are released into the atmosphere.
Energy-efficient appliances, insulation, roofing materials, doors and low-e windows are all effective in lowering heating and cooling bills.
In many cases, builders are also including universal design elements into green homes. These designs, which include wider doorways, no stairs, flat entries and accessible bathrooms, sinks, and showers, assure that people with varying abilities can live in and age in their homes and their neighborhoods.
Smart Home Technology
Many of today’s smart home technologies are designed to add energy efficiency as well as technological convenience to the home. Technology in the home is also helping homeowners have a better living environment by quantifying air quality and keeping indoor temperatures steady.
The Nest Learning thermostat and the Alexa Echobee are just two examples of the ability homeowners have to make the thermostat do several automations, such as control smart devices, shop, play music, and hear the latest news and weather, all using Alexa voice commands. Smart home devices include security, lighting control, appliance control, cleaning and a lot more to make living convenient.
Updating Your Existing Home With Green Features
There are many green renovations and improvements a homeowner can do to retrofit their existing home, making it more energy efficient and healthy. As green homes are in demand, many of these improvements have tax breaks to go with them.
- Solar Energy Systems – Installing a solar water heater or photovoltaic system allows you to take a credit of 30% of the cost of both the purchase and installation, with no upper limit.
- The federal government provides a solar tax credit, known as the investment tax credit (ITC), that allow homeowners and businesses to deduct a portion of their solar costs from their taxes. Both homeowners and businesses qualify for a federal tax credit equal to 30 percent of the cost of their solar panel system minus any cash rebates. Learn more about the federal reneable energy tax credits, including the timeline for the eventual end of the ITC in 2022.
- Windows, Doors, and Skylights – If you replace doors, windows, or skylights with energy-efficient models, you may be eligible to get a tax credit of 10%.
- Water Heaters – get an energy-efficient model and get a tax credit for up to $300 of its cost.
- Energy Efficient Appliances – Check with your energy company, and state for tax credits and rebates as you purchase more energy efficient appliances.
Green Home Updates
Since green homes are in demand, making occasional green updates to your home will add value and keep you home current with newer homes. Just what kind of green updates should you consider? Here is a list I’ve curated from all over the web, in no particular order:
- More and better Insulation, preferably with natural content. Attics, walls, air ducts. Foam pipe insulation.
- Energy Efficient Windows
- New doors.
- Solar Panels – this is more affordable with government grants or tax write-offs. Check with your state government and your energy company.
- Wind power in rural areas, like above, check for incentives.
- Newer, high efficiency furnace.
- Energy-Star appliances.
- Heated Floors. (we have them in our floors…wonderful!)
- Geothermal heating system if you’re building a new home.
- Tankless Water Heater.
Improvements everyone can afford:
- Caulk. A homeowners best friend. Seal up a leaky house to save on energy costs.
- Programmable Thermostat.
- Low flush toilets.
- Efficient shower heads.
- Efficient light bulbs. Timer for lights.
- Energy efficient power strip.
- Smart house technologies for remote access. Control the thermostat or close the drapes from your smartphone.
- A clothesline. If your HOA allows.
- Going Green in the Home,
- Using Less Water on Your Yard,
- Should I Get a Home Energy Audit Before Selling My Home?
For more ideas on how to make your home more energy efficient, read more from Mother Earth News, where evidence is mounting that green homes are in demand.
Further Resources: Federal Tax Credits for Consumer Energy Efficiency via Energy Star.
Thanks for an informative guest post on energy efficient green homes from our favorite home inspector:
Contact Chris Highland for our list of home builders in Central Maryland and learn about the benefits of buyer representation in your new home build.