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Green - What Will Buyers Pay?

My green builder is going to start a mid-range house in a new, very trendy, forward-thinking subdivision.

Area: Freeport, Northwest Florida.

Price range: $250,000 to $500,000.

The builder plans on offering variations of a design depending on the buyer's price point. We are actively discussing what the buyer will pay for certain green features in this price range. Green has not become big in my Emerald Coast market yet. Suggestions as to what can be recouped and what will sell and what the buyers will pay? Thank you!

Posted by Wendy Rulnick "Its Wendy!" Destin Real Estate -Florida on 02/01/2008 10:15 AM

Comments (8)

Originally posted at: Destin Real Estate - Emerald Coast of Florida: Green - What Will Buyers Pay?

8 Comments on Green - What Will Buyers Pay?

FEB

2008

Hi Wendy - great question! Keep in mind it's not only about what buyer's will pay but also about where the home will appraise. The Appraisal Institute has a podcast regarding Green Building. They will also be offering seminars beginning this summer.

For me personally, I would pay more for the "green things" like energy efficiency, passive solar, renewable energy, no-VOC's, etc. Features that will make my house more healthy and more efficient. Also, I would require a builder that follows sustainable practices. These would be my most important requirements.

Let's pretend I went for the $450,000 house and it cost me 10% more to go green (high figure) bringing my grand total to $500,000 -- The 10% difference would cost me approx $285 more at today's rates (fixed, 30YR.) Could I make up at least $100 - 200 of this in energy savings? Likely. Maybe more, built efficiently enough. Also, because I choose a fixed rate mortgage I am not subject to inflation like I would be with utilities. Do you think this presentation and logic makes sense?

FEB

2008

Hi Wendy,

Great post! Here are a few ideas for features that you don't see often... built in recycling centers, on-demand hot water heater, rainwater recovery system, cork or concrete flooring, paper based counter tops, salvaged materials, southern exposure, etc.

Analysis indicates that home values increase by about $20.00 for every $1.00 reduction in annual utility bills ("More Evidence Of Rational Market Values For Home Energy Efficiency" from the Appraisal Journal).

The most sought after green upgrades are energy savings, followed by water saving appliances and recycled building materials.

Hope some of this information helps! Oh wait, what about offering a home that was lit completely by CFL's, and then detailing out the green house gas (in pounds) savings, energy and cost savings.

Lisa

Mary- Great reference to the Appraisal Instute! I will review and share it with my builder. The 10% increase in price resulting in energy savings that recoups part of the investment makes sense. Energy-efficiency, low voc, sustainable practices are a "go", I believe. The difficulty with my market is the over-supply and declining price trend.

Lisa- Thanks for the plethora of ideas! I will discuss with my builder. Is Eco-Broker Certification worthwhile for me to get?

Wendy

Hi Wendy - that 10% figure I pulled out of the air to give an example on the high side! Many green practices are a tradeoff where savings in one place can be used in other places. Green is be achievable at affordable price ranges and studies I have read show just a small difference in cost - maybe 4%?

I like Lisa's ideas on CFL's throughout the home. I also think motion activated lighting would be awesome! How many times I walk through the house shutting off lights long after people have left the room!

Mary/Wendy - Motion activated lighting is a wonderful idea... I also think light sensors would be great too. In my house for example we have three dogs and when we leave it is light out but there are several times we come back to complete darkness resulting in us leaving some lights on (granted we have CFL's throughout our home) and we all know this is energy efficient. We have talked in detail about putting timers in some rooms so that when it becomes dusk the lights will turn on in our absence. I truly believe that people really want these features but are not sure where to start OR are not comfortable installing them which results in never implementing. If builders offered these things as standard features.. just think how much energy we would save!

Wendy - EcoBroker is a wonderful designation that will help you stand out from the rest. I have found that several Realtors say they are green and offer green packages for buyers/sellers but I sometimes question their knowledge. As a Realtor.. isn't our knowledge what seperates us? Afterall isn't saving 20 resident or 15 years in the business a form of knowledge/education about market trends, etc. Plus as an EcoBroker there are soo many wonderful resources at your finger tips! I'd recommend it.. and I say that confidentally after holding the designation for 2 years!

Mary- I think 4% increase in price is within range as "marketable" on the Emerald Coast. I like the fact that my builder will offer three different versions of the house, possibly with different levels of green. Then we can really find out what our market is interested in.

Lisa- That is a cool idea to use sensors in some rooms. Almost like a refrigerator light, it's off when you are not using it! I am going to look into the EcoBroker certification in my area. I think it's a good idea.

Hi Wendy - I had to check back in for comments! I love the "levels" of green. What I have found in renewables is offering different package levels works well...package A ...B.... and C. Another great thing to do is build in to the home features that make it easy to upgrade later when and if the need arises. Also keep in mind Aging in Place. That can do so much to make the home more sustainable and thus green!

FEB

2008

Mary- What is Aging in Place?

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