Colorado Green Real Estate

Consumers Care About Health and the Environment: Green Homes is a Solid Market Trend.

In my last post I covered some of the basic green home market data from McGraw Hill Construction. One of the key points is that the data is all grouped together. In order to be able to extract any information suitable to influence strategic decisions, it must be segmented by factors like price range, geographical region, green features, etc. I think we are going to have to wait a while to obtain data with that type of granularity, but we can still use the information to help shape our general business direction. One thing is for sure, no matter how you slice it, the market outlook for green real estate going forward looks very promising.

In this Part II I am going to list some of the more consumer related information supporting the green home market.

• When asked to list their top 12 influences in buying a home, consumers responding to a National Association of Home Builders survey last year put energy efficiency at No. 2 , behind quality of living space. Five years ago, energy didn't even make the same survey. (The Huntington Post, February 2009)

• According to the National Association of the Remodeling Industry survey, 46 percent of American homeowners claim they would be eager to incorporate green principles into their homes, especially if it would save them money. Experts estimate one can generally save 20 to 30 percent on energy costs with $4,000 to $8,000 worth of improvements.

• Americans Ready to Spend More Green on the Home 48 percent of homeowners would spend $2,500 or more on greening up a home for resale according to the Better Homes and Gardens Real Estate “Living Green” Consumer Survey. The findings are the result of the Better Homes and Gardens Real Estate Living Green Consumer Survey. (Lawn & Landscape Magazine, Nov. 7, 2008)

• A recent survey by the National Association of Realtors found that nine out of ten realtors said their clients were interested in energy-efficient features of green homes and the potential cost savings of such features. An overwhelming 90 percent agreed there will be even more interest in green building practices a year from now. (St. Charles Journal, September, 2008)

• According to a 2007 National Association of Home Builders survey, 63 percent of buyers are motivated by the lower operating and maintenance costs that come with energy and resource-efficient homes. (Environment News Service March 2007)

• According to the National Association of Home Builders, when 800 registered voters were given a list of motives for either purchasing a new green home or remodeling their current home to make it greener, nearly two-thirds (64%) identified “reduced energy costs” as an important factor, followed by “because it would be healthier,” and it’s “the right thing to do for the environment.” (www.nbnnews.com, Nov. 2007)

Back to the economic picture, here is one piece of information supporting the increased value of green homes compared to other homes that are not green:

• While the average U.S. home lost 5.7% of its value in 2007, eco-friendly homes have held their value, even appreciating in price. Come sale time, a green property typically appraises for 10% to 15% higher than comparable conventional homes according to Jim Amorin, vice president for the Appraisal Institute, a professional trade organization. (Smart Money, January 2008)

Again, the data is scattered all around from different sources and at different times. I am hoping to update my information sometime soon. I'll post another blog of the finding when it's done.

Here in Boulder Colorado and also in the Denver Metro region there is a growing sentiment toward green homes. I believe we are going to start to see similar trends in other parts of the country in the near future.

Previous Post: Green Housing Market is Rapidly Growing--Where's the Data?

It’s no longer just a fad, the movement toward Green Homes is a Solid Market Trend.

The green housing market is growing on all fronts—new construction, retrofits, single family and multi-family are all seeing strong growth in the area of green practices and products. The green housing market is following the classic growth pattern of innovative technology adoption progressing through various stages of market development. We are now at the stage where we are starting to move beyond the early adopters—a highly segmented group that is generally less price sensitive—into more mainstream market acceptance.

Although green technology has been around for many years, it is just now beginning to take root. Unfortunately, even though there are tens of thousands of green homes all across the country, we have very little quantifiable market data. I see this as a big problem. I admit, I am a bit of a data guy, maybe even a geek in that regard (I am sure my wife would have more to say about that…), but for me data can give us visibility about market activity and demand. Data can help guide the decision process on all fronts including development of new construction and renovation of existing homes. This is true on both the professional and consumer side of the business.

But all is not lost. There is some green market data out there if you're willing to dig deep enough and piece it together. The problem is that it is spread out and not well organized or segmented. Some of the market segments we need to know about the green housing market activity include geographical region, price range, house size, leading technologies implemented, and consumer uptake. When this information becomes available developers will build smarter, agents and EcoBrokers will market green homes more effectively, and consumers will become more empowered to make better and more informed green home buying and selling decisions. But until that time, we'll have to get by with what we got.

Okay, enough of my rant. Here are a few morsels of data about the green housing market that I’ve gathered from a McGraw Hill Construction report compiled in cooperation with the U.S. Green Building Council. In Part II of this post, I’ll present some of the other data I’ve collected from various sources.

Green home building products are gaining ground according to a report produced jointly by McGraw-Hill Construction and the National Association of Home Builders (2008 &; 2009). The chart above is from a presentation I recently gave showing the market forecast for new green construction.

• The market for green homes is expected to rise from $49 billion to $140 billion over the next five years.

• Standard homes are becoming increasingly green, with home owners using green products for 40 percent of their remodeling work.

• Most Americans find out about green homes through word-of-mouth, followed by television and the Internet.

• Green home owners are happy with their homes and are recommending them at rates significantly higher than recommendation levels of other industries.

• Home owners are buying green homes because they are concerned about the health of their families, as well as to reduce energy and other home operating costs.

• Education and awareness of green ranks as the most important obstacles, slightly higher even than the additional first costs associated with building green.

It's interesting to note that if the new construction part of green building is growing so rapidly, we can only assume that the green renovation market is growing even faster. But this is where I've hit a brick wall. The good news is that the Federal government's Recovery Through Retrofit program announced a couple of weeks ago will likely inspire the market analysts to get to work and start giving us data geeks something to chew on.

Previous Post: Boulder County Colorado's Green Building Code