Homebuyers Pay More for "Green" Homes

Written by Posted On Sunday, 18 February 2007 16:00

A recently released survey by Green Builder Media and Imre Communications indicates that homebuyers are willing to pay a premium for green homes -- homes that are environmentally safe and, in many cases, more valuable than those traditionally-built.

There were 250 U.S. Builders from the affordable, market-rate, luxury/semi-custom, custom, multi-family, and developer categories surveyed. Slightly more than half of the builders (51 percent) said that buyers would pay anywhere from 11 to 25 percent more for green-built homes. According to the survey, the average green homebuyer is between the ages of 35-50, college educated, and has a fair amount of green product knowledge.

The green-home building is a growing trend. But builders like Matt Belcher of Belcher Homes, says that it's been part of his practice for more than a decade.

"I grew up in the building business with that general philosophy of homebuilding."

Belcher says that ever since the National Association of Homebuilders launched its green-building guidelines, it has given him more structure and focus and "made it possible to do a little bit better job of what I was already doing." He adds that the availability and enhanced production of better green-building components also is contributing to the growing desire for green-built homes.

But what exactly is a green-built home? Green Builder Media's website states that "green building means responsible development in natural areas that conserves the environment and improves the well-being of the inhabitants."

Belcher says that often people think the homes are going to be built very futuristic or modern looking. "That's not really the case. The whole idea is the green homes look just like [traditionally-built] homes," says Belcher.

It's the green components -- products with long and efficient life cycles -- that make the house more environmentally safe and ultimately economically beneficial for the homebuyer. Green-built homes benefit those living in them and the environment through such things as improved energy efficiency, durability, indoor environment quality, resource management, and general environmental appropriateness of the home. A typical green product is made from renewable raw materials or contains recycled components. Green products are missing toxins and pollutants.

"Builders are buying green products because they feel it's important to both the environment and their businesses. This shift in behavior and purchasing patterns confirms just how significant the green-building movement is," says Sara Gutterman, CEO of Green Builder Media.

She adds, "As demand increases for green products within both the consumer and trade market, manufacturers will respond by accelerating research and development, which benefits both the environment and homebuyers."

Already it is becoming less expensive to build in green style. "The heating and cooling cost for these [green homes] are a third of what they used to be," says Belcher.

Belcher has seen the changes over the last 14 years. He says today there are some building materials that you simply cannot buy any other way than "green". He says that's good news for everyone.

"The fact is that green homes that are built this way inherently have a little bit more equity in them. There are lenders and appraisers that give credit where credit is due," says Belcher.

He continues, saying that green homes are not only cost savers but really are appreciated and valued by the homebuyer.

"The occupant satisfaction and comfort are higher than [traditional-built homes] and green homes are more durable. Their maintenance cost, along with the operational costs are less," explains Belcher.

But building a green home will cost you more. However, Belcher says, the cost-savings in the end, equalizes the initial building costs. "The average statistic that I hear is that it might cost around 2 percent more [to build] than a traditional home, but the green-built house is worth up to 15 percent more."

He says it amounts to an equity offset that more than pays for the additional charges to get the green home built.

Belcher says, "It's a quick payoff and then it's a longer lasting benefit and that's why there's more equity in these types of homes."

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Phoebe Chongchua

Phoebe Chongchua is an award-winning journalist, an author, customer service trainer/speaker, and founder of Setting the Service Standard, a customer service training and consulting program offered by Live Fit Enterprises (LFE) based in San Diego, California. She is the publisher of Live Fit Magazine, an online publication that features information on real estate/finance, physical fitness, travel, and philanthropy. Her company, LFE, specializes in media services including marketing, PR, writing, commercials, corporate videos, customer service training, and keynotes & seminars. Visit her magazine website: www.LiveFitMagazine.com.

Phoebe's articles, feature stories, and columns appear in various publications including The Coast News, Del Mar Village Voice, Rancho Santa Fe Review, and Today's Local News in San Diego, as well as numerous Internet sites. She holds a California real estate license. Phoebe worked for KGTV/10News in San Diego as a Newscaster, Reporter and Community Affairs Specialist for more than a decade. Phoebe's writing is also featured in Donald Trump's book: The Best Real Estate Advice I Ever Received and The Complete Idiot’s Guide to Buying Foreclosures. She is the author of If the Trash Stinks, TAKE IT OUT! 14 Worriless Principles for Your Success.

Contact Phoebe at (858) 259-3646 or phoebe@livefitmagazine.com. Visit PhoebeChongchua.com for more information.

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