Ratings such as HERS index offer buyers and realtors a ready comparison with standard, conventional properties.
Jason La Fleur, a green home consultant with Eco Achievers and instructor for the Appraisal Institute explains, “Often, green builders have asked lenders and appraisers, ‘Why can’t you give me more value for my high-performance green home?’ The reality is that appraisers do not ‘give’ value; they assess the local market preferences. In order to support any value adjustments for green building, appraisers need to have the infrastructure in place for sales data to compare green homes vs. non-green homes.” That’s where the importance of a Green MLS comes in. Many of the markets that have recently adopted a Green MLS do not have sales information, as it takes time for transactions to occur. Fortunately, there are some markets with usage data available. A 2011 study done by the Earth Advantage Institute based on data provided by the Portland Multiple Listing Service indicates that existing homes with a green certification sold for 30% more than homes without such a designation. Sale prices were also up by as much as 8% for newly constructed homes with a green certification in the six-county Portland metropolitan area as opposed to new non-certified homes.
Another study done by GreenWorks culminated in over 49% of new homes sold with a certification. This is an exciting trend because when the market share of certified green homes exceeds 50% on a consistent basis, appraisers will be required to discount any home that is not certified green. This means that certified homes have the potential to become the market norm.
La Fleur continues, “At first glance, people may be willing to discount this as Portland and Seattle being unique areas. However, what’s noteworthy is that they have had an established MLS with green features for many years, and now have rich sales data. Once the market percentage tipping point is reached, people will begin to question buying homes that are not green. Savvy investors and homeowners see this market shift coming, and are building and buying green homes now as a risk mitigation strategy to ensure that their principal asset—their home—receives maximum value in the future.”
We can draw conclusions from studies that there is a sale price premium for homes that have a third-party green certification. We can also assert that it will not be long before conventionally built homes, both new and old, will be devalued. But the ramification of a Green MLS for home sellers and buyers goes beyond monetary value. It becomes the tool by which homes can be appraised for sustainable value. It is also important for home sellers to keep in mind that, as home buyers increase the demand for credible sustainable features, any new homes or rehab projects that are done conventionally are already obsolete once they hit the market.
RESOURCES FOR MORE INFORMATION
> Earth Advantage Institute
www.earthadvantage.org
> Green REsource Council
www.greenresourcecouncil.org
> GreenWorks Realty
www.greenworksrealty.com
> The Green MLS Toolkit
www.greenthemls.org
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76