Although our recent Green issue seemed to show green-certified homes aren’t a big priority for homebuyers, a new study shows that green-certified homes are worth more than homes which aren’t certified. One analysis from the Earth Advantage Institute found that on average, green-certified buildings were being sold for up to 30 percent more in price, according to Builder Online.
Sales from May 2010 through April 2011 in the Portland area show that green-certified new homes sold for eight percent more than non-certified homes, and certified existing homes sold for 30 percent more.
This is the fourth year in a row studies have found green-certified homes selling for more than conventional ones. Certifications for these homes come from LEED for Homes, Energy Star, Earth Advantage, or an Earth Advantage/Energy Star combination.
Rene Oehlerking, marketing director for Salt Lake City Gerbett Homes, explains that buyers will certainly pay a little more for a green certification home, but not too much more.
“Everybody wants to go green, but nobody wants to pay for it,” Oehlerking said.
As Josh Wynne explains, a green builder in the Sarasota, Fla. market, homes are like cars. People will pay more for a Bentley than a Kia, but you shouldn’t use the green certification to as a commodity or to specifically drive up profit.
“Clients are naturally skeptical of green building,” Wynne said. “If you’re disingenuous or sell green as an upgrade like a granite counter,” it won’t work.
And why are buyers willing to pay more for green certifications? So they can save some green.
Energy savings from a home that earns a HERS rating of less than 40 means a savings between 60 and 80 percent on energy bills. Oehlerking says her companies’ homes have electric bills as low as $5 a month and a natural gas bill of about $7 a month.
The challenge though, is finding the right appraiser who understands the value of green features. For example, a GreenStreen remodel in Arizona was first appraised at $140,000 before anther appraiser was found who was more familiar with green construction. The second appraiser came in and marked the home worth $200,000.
According to the Atlanta Green Home Sales Report, in areas where green-certified homes may not be selling for more, they are still on average selling faster and closer to the asking price than other homes.
In 2010, green-certified homes spent an average of 97 days in the market compared to 123 for traditionally built homes.