Studies Show Green Housing is a Solid Investment

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Along with the stock market achieving record highs earlier this year, the housing market is showing its strongest performance in the past seven years. In New Hampshire, single family home sales have increased almost 8.5 percent, and condos 18 percent, when compared to the same time last year. As properties switch to new owners and people prepare their homes for sale, the value of sustainable building, technology, and labeling is an important consideration for everyone in the market.

Along with the stock market achieving record highs earlier this year, the housing market is showing its strongest performance in the past seven years. In New Hampshire, single family home sales have increased almost 8.5 percent, and condos 18 percent, when compared to the same time last year. As properties switch to new owners and people prepare their homes for sale, the value of sustainable building, technology, and labeling is an important consideration for everyone in the market.

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A home is the most valuable investment most of us will ever make. Recent studies show that certifying your residence as sustainable can add 9 percent to its value. On a $300,000 property, that is $27,000. In their 2012 Values of Green Labels in the Californian Housing Market paper, Nils Kok and Matthew Kahn focused on homes in the Golden State that had achieved LEED for Homes or GreenPoint Rated status. These properties, close to transportation routes and shopping centers, were constructed with non-toxic building materials and contained water efficient features. The traditional rational for making a house green has been to conserve resources and save money. It now appears these homes will fetch more money when they are sold. In fact, the study demonstrates that the increased revenue made when a certified house sells is more than the savings that come from its environmentally conscious attributes. It seems that the peace of mind some consumers in California gain from owning a green home is worth an extra 9 percent even if they will not recover the extra money they paid with the savings the house will generate.

It is not just home owners who are excited by green building. Even when the $2500 to $3000 cost of LEED residential certification is factored in, the increased value achieved through official recognition is very attractive to investors. The Urban Land Institute and PWC's recent 2013 paper, Emerging Trends in Real Estate 2013, focuses much of its efforts on real estate investment and says that green building is playing an increased role in both the residential and commercial markets. While they believe overall new development will be limited, they state that "trends point to more environmentally friendly, sustainable buildings and a more efficient use of space. Green developers continue to embrace this pursuit and to adapt and conform to new demands from consumers."

Green homes are certainly in demand. McGraw Hill's New and Remolded Green Homes: Transforming the Residential Marketplace projects a five-fold increase in new green home construction between 2011 and 2016. It also indicates the green home market accounts for an incredible $114 billion opportunity in the coming years. As the construction industry plans for the future, up to one-third of builders believe they will be dedicated to green building by 2016.

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Green home image via Shutterstock.