Green home building isn’t just a construction industry buzz word, it is a body of home construction techniques and practices that are becoming increasingly important to home owners and home buyers alike.
Energy efficient, sustainable homes are characterized by their use of sustainable materials, and less volatile chemicals. Green homes are finished with Energy Star rated appliances and lighting fixtures. And these homes also employ innovative air handling systems and home sealing techniques. These features save homeowners money over the course of time when they are living in the home, but are energy efficiency and sustainability features that increases the resale value of your home?
Since energy efficient and green homes are still on the leading edge of home building technology, it only makes sense that the valuation practices for these features are still in their infancy. The Appraisal Institute published their first book teaching professionals about how to value green homes in June of 2010, and as a developing paradigm for appraisal professionals it is a challenge that is top of mind for many home builders and homeowners.
Kim Hibbs, owner and general contractor for Hibbs Homes, explains, “Accurate appraisals for green verified homes are really a challenge right now. Most appraisers don’t fully understand the benefits to a green built home, only made more difficult because it is hard to find comparable homes to help with their analysis. The NAHB and many local HBA’s are taking an aggressive approach to help educate appraisers as to the short and long term benefits of these homes.” He went on to add, “In many markets, there is now a special category for green homes in the Multiple Listing Service (MLS) which is used by Realtors to search for homes.”
Taking into consideration the daily cost of living, the average green home saves the homeowner around $800 a year in living expenses. Take, for example, the course of a standard home loan (30 years): the average green homeowner will save about $24,000 in living expenses, or about $66 per month, during that period of time if you maintain an energy efficient home, e.g. by replacing appliances, etc. That figure doesn’t even account for the increase escalating energy costs during those 30 years. So, bare bones you could easily say that an energy efficient home is worth in the ballpark of $24,000 more than a conventionally built home.
But the big question that remains to be answered is whether that will translate into the perceived value of a home by buyers? We predict, based on customer demand and education about these features, that energy efficiency is going to become much like many modern amenities that home buyers have come to accept as standard when looking for a home. Just as you have a home inspector evaluate the foundation of your home, you will also see buyers performing energy efficiency audits to determine if they will purchase a home or not.