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Did you know that Green Homes are worth more?

By
Real Estate Agent with Berkshire Hathaway HomeServices California Properties 01238708

Did you know that Green Homes are worth more?

Ten years ago I remember having a conversation with a couple of developers and the subject was how much more will a “green home” sell for compared to a regularly constructed home? We were brainstorming the concept in a coffee shop and the developers were pioneers in Green Construction. I really did not have a true feel for how much more we could sell the home and told them as well.

Green is worth Green, Endre Barath Los Angeles Realtor

We suspected that it would be worth more and progressive buyers, particularly forward thinking buyers from the entertainment industry would be willing to pay more for these green homes.

Well fast forward to 2012 and amazingly there have been many studies done since then. Some by the University of California not only in Los Angeles but also in Berkley and they determined that a “green label” home labeled by Energy Star, LEED for homes clearly sell for more money. According to the UCLA study they are selling for at least 9% more.

Now if I may add my input: in my observation with ten plus years of monitoring this phenomenon, I have noticed that homes that are able to justify that they have LEED Certification actually sell for anywhere for 10-35% more than regular homes. The variance in the price point is based on location. If it is in Bel Air, Beverly Hills or the Hollywood Hills, it makes a huge difference. The common denominator is where there is a strong Entertainment Industry concentration of home owners the price is higher for Green Homes.

So Green is good for developers, the environment and the community. If you are considering building a Green home please reach out to me since I have a large inventory of Vacant Lots in the Greater Los Angeles area.

 

If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Playa Vista, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 or email me at homes@endrebarath.com or visit one of my websites at http://www.endrebarath.com Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations.

Comments (26)

Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

 

Lenn all valid points, these were the same concerns I had about ten years ago, when I sat in the coffee shop with the developers, since then the technology and the concept has changed and part of being " green" also consist of  the overal objective to reduce the damage buildings do to nature and the surrounding environment by using reclaimed materials as an example.

May 23, 2014 03:41 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

 

Debbie,   would you believe the "green building & remodeling concept" has been around since the early 1960's in particularly in Europe: Germany, France and I could go on and on. There is an Green International Code that at least 40 countries participate in from Europe, Asia to the Middle East.

May 23, 2014 03:46 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

 

Roger, indeed most people have a concern about the lack of knowledge of the upfront cost vs. the life cycle cost of a green building.

The stigma is between the knowledge of up-front cost vs. life-cycle cost

 

May 23, 2014 03:49 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Noah I am not so sure about being contraversial it is more of an education process. In the commercial real estate market studies show that LEED and Energy Star certified buildings achieve significantly higher rents, sale prices and occupancy rates as well as lower capitalization rates potentially reflecting lower investment risks.

May 23, 2014 03:52 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

AJ glad to be of help

May 23, 2014 03:54 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Dick I suspect there is not that much exposure about it when they build it. Often times I see a person builds it more as an owner user, hence little exposure to the public...

May 23, 2014 03:55 AM
Suzanne McLaughlin
Sabinske & Associates, Inc. (Albertville, St. Michael) - Saint Michael, MN
Sabinske & Associates, Realtor

Endre Barath, if I ever move...I want a green home.  I love the energy-efficiency and the ease of not worrying about having to rely on the grid so much!

May 23, 2014 05:11 AM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Endre-We have pretty strong new home market. Some of the builders do use "Green" as a market differeniator. My estimate is "Green" homes sell for more on a $/sf basis, but the energy savings in many cases gives a very short payback period.

May 23, 2014 05:57 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Suzanne I love the idea that we are trying to cut down on waste and reuse materials that would have just been sent to the trash dump...

Wayne not only do they save energy in addition in the long run materials have repeat use rather than a single use...

May 23, 2014 07:41 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Endre:  I like the idea of a "green" home.  But the purchase price still has to make sense initially too.  I want to do the right thing environmentally.  But I need to be able to afford to do it ...

Gene 

May 23, 2014 11:48 AM
Elyse Berman, PA
LoKation Real Estate - Boca Raton, FL
Boca Raton FL (561) 716-7824

Endre,  I have seen some ultra luxury homes being built green today, but it's a hard sell here too.  I would think it's easier in LA, as you say, with the strong concentration of entertainment industry.  Anyone looking for a green home would be smart to call you as you are up to speed on the subject!

May 23, 2014 11:54 AM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher
Greening homes pays me well too!
May 23, 2014 04:46 PM
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

I agree with Lenn and Debbie it is not a big sell yet in this area.  Although Red Hook had the first certified green home in the Northeast.

May 23, 2014 04:57 PM
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

There is still not even close to enough.

If is a regular=normal house, the closest they go to the ''green'': double pane  windows, new doors, energy efficient appliances, and  maybe/just maybe a few solar panels on the roof for the pool..... Good try:)

May 23, 2014 05:26 PM
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Depends on your market and in many areas, the homes that are were already online before it had a color attached to it as new and difference.

May 23, 2014 07:14 PM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Endre, I think energy efficient homes sell better as opposed to LEED certified homes. The cost for LEED certification, in my opinion does not have the ROI to make it feasible.

May 23, 2014 10:56 PM
Rob Spinosa
US Bank - Larkspur, CA
Mortgage Loan Originator, Marin County

Location, location, location.  In reading the comments to your post, it once again confirms that where the home is may be just as important as what the home is.  Here in Marin County, if you could make a green, organic, vegan, cage-free home, well, my guess is the premium would be even higher...

May 24, 2014 12:11 AM
Than Maynard
Coldwell Banker Heart of Oklahoma - Purcell, OK
Broker - Licensed to List & Sell - 405-990-8862

I was a green builder for many years (used ICF products). Couldn't get the local appraisers and mortgage companies to make any adjustment for energy savings. Per the allowances at the time an appraiser could add up to 15% to the value for green certification.

May 24, 2014 01:12 AM
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

Great statistics, Endre, thank you! A true LEED certification is very difficult to obtain. There are degrees of "green", but it would be good to know the minimum standards as to when a home can be considered "green". Do you have that info? Thanks!

May 24, 2014 08:29 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Gene, that is most people's concern when they are on a tighter budget, well said.

Elyse, it is a statement or better said taking a stand with ones money and when you are affluent you can set the tone to help the environment.

Laura I knew you would concur!

May 25, 2014 06:00 AM