Energy Efficient Homes Sell for More

A new study involving an unusually large sample of 1.6 million homes found that, holding all other variables constant, a green certification label on a house adds an average of 9% to its selling value. Researchers also found something they call the “Prius effect”: Buyers in areas where consumer sentiment in support of conservation is relatively high—with a certain percentage of hybrid-auto registrations—are more willing to pay premiums for green-certified houses.

It has been a controversial question in the home real estate market for years: Is there extra green when you buy green? Do houses with lots of energy-saving and sustainability features sell for more than houses without them? If so, by how much?

The study found that green-certified houses sell for at least a modest premium over similar but less-efficient homes.

The study found no significant correlations between local utility rates and consumers’ willingness to pay premium prices for green-labeled homes. But it did find that in areas with more extreme temperatures, buyers are willing to pay more for the cost savings on energy that come with a green-rated property.

From their study’s 1.6 million home transactions, Kahn and Kok identified 4,321 dwellings that sold with Energy Star, LEED or GreenPoint Rated labels. They then ran analyses to determine how much green labeling contributed to the selling price, eliminating all other factors contained in the real estate records: locational effects, school districts, crime rates, time period of sale, views and amenities such as swimming pools.

The National Association of Home Builders has enthusiastically embraced labeling as a selling advantage for new houses. Buyers of such homes today are far more likely than purchasers of resale homes to find them rated as energy-efficient and environmentally friendly.

For more information on energy efficient, green construction of modular homes, contact Avalon Building Systems.

The Washington Post