As green building pros know all too well, today’s recession-weary home buyers are often more concerned with price than with a home’s energy rating, durability, or indoor air quality. New research, however, reflects a steady increase in the public’s understanding of the value of green building features. In fact, one analysis in the Portland, Ore., metropolitan area found that green-certified dwellings sold for up to 30% more on average. The study from Portland-based nonprofit Earth Advantage Institute, which analyzed sales data for May 2010 through April 2011 from the Portland Regional MLS, found that green-certified new homes, on average, sold for 8% more than non-certified ones. In one of the six counties reporting figures, the premium was more than 23%. Certifications came from Energy Star, LEED for Homes, Earth Advantage, or an Earth Advantage/Energy Star combination.
The difference in sales price was even higher for existing homes: an average of 30%, with one county reporting a premium of more than 61%. This is the fourth year in a row that the institute has done the analysis and found certified homes selling for more than conventional ones.
The information was supplied by real estate agents and is based on averages—not comparables—but even so, the study’s authors noticed a consistent trend, even while home sales in general were down: Third-party certification results in a higher sales price, says Dakota Gale, sustainable finance program manager at the Earth Advantage Institute.
“There's certainly a premium there to be had,” says green builder Josh Wynne of his Sarasota, Fla., market. He compares homes to cars, saying that people willingly pay more for a Bentley than a Kia, but also warns against turning green certification into a commodity or using it specifically to drive up profitability.
“Clients are naturally skeptical of green building,” he says. “If you're disingenuous or sell green as an upgrade like a granite counter,” it won't work.