Green has been a silver lining for home builders, but more is needed

The green building market has made all the difference during the downturn in new construction. Despite the decrease in new construction starts, green homes have increased in share—and in value, to be 16% of the market (up from 10% in 2008). Furthermore, in a recent study of builders attending the NAHB’s Green Home Building Conference, 77% of them said that building green had helped their businesses’ bottom-lines in the last two years, including 30% who said it had a significant impact.

Yet, even with green building as a positive in the down economy, there is more that is needed to help it become mainstream—and it’s not just about costs. Most people are buying green homes because they believe they are making a better investment—one that will perform better, improve the health and well-being of their families, and help lower their utility bills—yet green homes are typically treated no differently than non-green homes during the appraisal process.

In fact, of this same population, 17% said this was the biggest challenge to an increased investment in green building. The obstacle is much less about a perceived first cost—which is the loudest detractor, we hear—and more about the value of the home being recognized. Once we see the appraiser community educated enough to recognize the true value of a green home, then we’ll see more consumers buying green homes and being rewarded for making sustainable purchasing decisions.

Research studies and reports on green building and other essential trends in construction can be found online here.

The posts on this blog are opinions, not advice.
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  1. Homes By Vanderbuilt says:

    Are there tax incentives for home buyers to build green? If so, that may be the only way to get anyone to buy a new home in the coming months/years. Many lenders are reporting record profits and are not lending to qualified buyers. Is there any legislation that might demand all new homes be built green?

    Homes By Vanderbuilt

    • Jim Henry says:

      Thanks for your comment. According to McGraw-Hill Construction’s 2010 Green Trends Report, Dallas and San Francisco both have energy-efficiency mandates in place for new construction and renovation of residential buildings. Dallas requires all residential buildings to be 15% more efficient than the 2006 International Energy Conservation Code (IECC). San Francisco has developed a Green Point rating system for residential work and requires that all buildings achieve a minimum score. Further details can be found on the EPA’s website at, and McGraw-Hill Construction will come out with a new report in January 2012 on the green residential market, including incentives available to encourage green building. Watch for updates.

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