Buyers Ready to Spend on Green?
Buyers Ready to Spend on Green?
Heating and cooling a home today is not cheap. But neither is purchasing a solar heating system, installing new double-pane windows, or replacing old appliances. For a long time, the high expense associated with "going green" has kept many home owners from embracing energy-efficient features; instead, they’ve focused on the little things like weather-stripping and using compact fluorescent lightbulbs.
But there are indications that more and more Americans are seriously considering green construction and adding new energy-efficient upgrades—and determining that the cost is worth it.
Green Products Buyers Really Want
"Energy efficiency is not on the wish list for home buyers in 2011—it is on the ‘must’ list," writes Paul Cardis, CEO of Madison, Wis.–based AVID Ratings, which conducts research on home design preferences. Which eco-friendly amenities are grabbing buyers’ attention?
- High-efficiency insulation
- High-efficiency windows
- Double- and triple-glazed windows
- Tankless water heaters
- Water-conserving devices
- Products aimed at improving indoor air quality
- Renewable flooring products, such as bamboo and cork
Sources: American Institute of Architect’s Home Design Trends Survey (second quarter 2010) and 2010 AVID Home Design Drivers study.
"Expenditures on energy-efficient home improvements, which have been essentially flat over the last few years, will see a period of strong growth through 2014, reaching $50.2 billion in that year," says the new Energy Efficient Homes report by Pike Research, a Boulder, Colo., market research and consulting firm focusing on clean technology.
In response to demand, some home builders such as KB Homes and PulteGroup Inc. are rolling out energy labels for new homes, which provide estimates of monthly energy costs, triggering a different approach to home-shopping for energy-conscious buyers.
Consumers are "motivated to do the right thing about the environment, but they’re also finding they can save money in the long run," says Bob McCranie, green, GRI, broker-owner of Texas Pride Realty in Carrollton, Texas, and a recipient of the 2010 NAR EverGreen Awards.
McCranie says he’s seen his own utility costs fall by 40 percent since outfitting his 1983 home with features including a solar water heater, Energy Star appliances, a solar oven, R50 insulation in the attic, and a water reclamation system. McCranie details his savings on his DallasGreenStreets.com blog and gives consumers tips on how they can do the same.
Connie Morelle, GREEN, GRI, with Keller Williams Realty First Atlanta, says many of her buyers over the past year have expressed concerns about increasing utility costs and some are rejecting homes with two-story great rooms and walls of windows—often costly to heat or cool.
Yes, the cost of going green is still an issue for buyers, practitioners say—especially because the upgrades that can cut utility bills by the greatest amount are also the priciest. Solar water heating systems can cost between $1,500 to $3,500 and solar panels can cost $15,000, but when used together, they can drop electricity bills to practically nil.
And that’s one reason the price hurdle is getting easier to overcome. With consumer education, more buyers understand the benefit. A recent study by Lawrence Berkeley National Laboratory shows that home owners who install solar panels on their home likely will recoup that investment, and maybe even more, at resale.
Federal tax credits also are helping sway the buyer mind-set, and energy-efficient mortgages are another option to help home owners pay for costly "green" upgrades.
"It’s easy for [home owners] to get overwhelmed with green ideas because there’s so much they can do," McCranie says. "But you don’t have to do everything. Just pick one or two things, such as solar cooking or composting, give it a try, and then add something again later."