Hard seeing the ‘green’ on resale homes

When it comes to energy efficiency and green features in homes, there’s a large disconnect in the marketplace among consumers, real estate appraisers and the nation’s realty sales system. More

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HOUSING

Hard seeing the ‘green’ on resale homes

Posted 4/1/13

When it comes to energy efficiency and green features in homes, there’s a large disconnect in the marketplace among consumers, real estate appraisers and the nation’s realty sales system.

On the one hand, prospective buyers routinely tell researchers that they place high priority on energy-saving and environmentally friendly components in houses. The presence of high-efficiency systems in a home makes shoppers more interested in buying because they’ll save money in the long run.

On the other hand, the vast majority of multiple listing services (MLS) – the organizations that compile listings of local homes for sale – do not yet include so-called “green fields” in their data search forms to facilitate consumer shopping for homes with high-performance features. Plus most real estate appraisers do not yet have training in the valuation of green homes and often do not – or cannot – factor in the economic values of expensive but money-saving components such as solar photovoltaic panels.

Two new research studies document consumers’ strong appetites for energy efficiency and green features. A survey of 3,682 actual and prospective purchasers by the National Association of Home Builders found that 94 percent of respondents rated Energy Star appliances as among their top several “most wanted” items out of 120 they could choose from. Ninety-one percent said the same for new houses that came with Energy Star certifications on the total structure.

Energy Star is a federally backed set of energy-saving performance standards for a wide range of products, including appliances, lighting, windows, doors, electronics, heating and cooling systems all the way up to and including newly built homes. The study also found that buyers would be willing to pay an additional average of $7,095 in the upfront cost of a house if that investment saved them $1,000 a year in utility expenses.

Meanwhile, a survey of buyers and sellers conducted by the National Association of Realtors found that 87 percent rated energy efficiency in heating and cooling as “very” or “somewhat” important to their choice of a home. Seventy one percent said the same for energy-efficient appliances. The newer the house, the more important were energy-saving and green components.

Now here’s the disconnect: While most new homes come with energy certifications and ratings, the overwhelming majority of resale homes do not. For shoppers and purchasers who prefer to save on energy outlays, there’s often little information in the formal listings search data on MLS systems to highlight houses with extensive green components.

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