Three years ago, buyers rarely asked questions about utilities. When I recommended that they to bump the SEER rating on the HVAC, the response may have been, “Why? We’re moving in two years.” This year brings a different story – most want to know the monthly utility bills, some ask whether rain barrels (referred to as a “god-send” by my neighbor, in the context of Virginia’s current drought) are allowed by the HOA, others want to know if they can put up a clothes line (some can, others can’t).
The Wired blog notes that $100 oil will push innovation towards new technologies. The impact on the residential real estate market will be substantial. I suspect that a relatively small segment of the population “goes green” because of altruism. No longer is green confined to the fringe, regarded as being vastly more expensive than “normal” goods and services. Going green frequently means saving green – something everybody can support.
The Emerging Trends in Real Estate® report released recently shows, among other trends, an increasing awareness of the mainstreaming of “green”.
Real estate developers and investors haven’t gravitated toward greater environmental consciousness (“going green”) just to save the planet, although reducing carbon footprints and harmful emissions sounds fine. “This is not about Al Gore and global warming,” insists one interviewee. “It’s good for business and it’s good for marketing.”
The signs are obvious – Energy Prices surged in 2006. Energy Efficient Mortgages are gaining momentum and awareness. There are movements within various MLS’s to add green criteria, such as Earthcraft, LEED certified, Energy Star … There’s even a green listing site. You don’t think that NBC would be “going green” for the next seven days unless there was profit involved, do you? CNBC not-so-subtly notes “Green is the Color of Money.”
The next few years will bring revolutions in design – driven by consumer demand (and a push here and there from governments) – towards smaller, smarter homes, more efficient transportation, and in a return to yester-year, more self-sufficient developments with corner stores, schools within walking distance and a refreshing integration of residential and business. More and more Realtors are making themselves aware of the benefits of green real estate – at the end of 2005 there were 150 Ecobrokers; today there are more than 2,000.
Making green changes can be simple – if you don’t do it because it’s good for the environment, do it because it saves money. To start, change a lightbulb. Ride your bike to the store for milk. Cancel your newspaper subscription. Think about little changes in the context of “times a million“.
Green’s mainstreaming will soon give way to its invisibility – building green is just a slightly different way of doing the same thing.
As an aside – I truly am humbled to be writing at the Bloodhound. Thanks to Greg and everybody else for setting the bar so high. I hope to leap a little higher each time I step to the plate. Next time, I’ll address ethics, blogging, the NAR and leading from within.
Todd Carpenter says:
My brother sells fireplaces and heating stoves. Every time the price of oil inches up, he’s dancing in the streets.
In the last year, he’s seeing a resurgence in the number of new home builders who are opting for wood burning fireplaces over gas. Today’s designs meet strict EPA emissions guidelines and are highly efficient.
Personally, if I were to build a new home, I’d invest in a solar powered, in-floor, hydronic heating system. I’m not one to go chopping wood.
November 5, 2007 — 6:17 pm
Michael Cook says:
People still have newspaper subscriptions??? Wow, thats a waste of paper and money.
November 5, 2007 — 7:04 pm
Rob Clark says:
Hi Jim,
I had to chuckle when I opened up my email and saw this blog. I had literally just finished my first section of my first Ecobroker course! What an amazing coincidence.
I agree we appear to finally be at a crossroads where environmental stewardship and market driven economics have collided producing what I hope will be the beginning of a new standard for living. Thank you for your post.
November 5, 2007 — 8:18 pm
Chrs says:
Some of the new construction we are doing is Energy Star Certified. People seem to like it, but they don’t offer anymore…
November 5, 2007 — 8:53 pm
DB says:
Yeah Mr. Cook, we country folks still subscribe to newspapers. Mostly we keep up with the obituaries. Then we recycle the papers and take them to the local fish market so the fishman can wrap up our fish.
In terms of real estate, newspapers are only good for two things, getting our neighbor’s phone numbers so we can catch up on the local gossip (since Realtors know everything that goes on around town) and for us actual agents, to see who among our circle of friends have moved their broker’s license to a new firm.
I still believe a good portion of buyers actually start their home search via the newspapers but that’s because we’re country folks and not too many of us have the Internet or know how to use it.
November 5, 2007 — 9:09 pm
Sean M. Broderick, CCIM says:
Welcome Jim,
While reading your post, I remembered hearing something on CNBC this afternoon (XM radio – 1st choice of the road warrior).. the US growth in energy infrastructure over the next 10 yrs (paraphrasing – so don’t hold me to the numbers) will be close to 8% due to its cost, while the demand for energy resources will increase by 15%, so the need for conservation (and opportunities for companies to capitalize) will be a hot topic in all aspects of our lives – LEED certifications in commercial real estate is a huge consideration right now with office investors.
November 5, 2007 — 9:24 pm
Jeff Kempe says:
Hi, Jim; welcome!
I’ve never been a fan of green marketing, largely because it’s never worked. Focus group results simply don’t reflect real-world behavior.
Nine months ago our Portland (Oregon) MLS unveiled a ‘green’ search filter, which included four specific green designations (LEED, EnergyStar, etc.) and one for ‘other’. The Oregonian – an inveterate promoter of anthropogenic global warming – devoted sixty column inches to the roll out. Note this is the greenest city in the greenest state in the US.
As of today there are 496 – 181 of them condos – listings with a ‘green’ designation, out of 15,529. That’s 3.2%.
However, if ‘green’ were an important buying calculation – and it’s fair to note that for the most part only new construction can pay for and get the green designations – one would expect that percentage to be higher over the nine month period.
Green sold: 426, out of 22,852. 1.9%.
And not only have I never had a buyer or seller mention green as either a filter or a listing tool, I’ve never spoken to anyone who has.
The only way green marketing works, as Seth Godin points out, is if it can made entirely personal, if there’s a tangible back-end benefit. So far, builders haven’t figured out how to package that…
November 5, 2007 — 9:35 pm
Jim Duncan says:
Jeff –
I think that we have, or nearly have, reached the Tipping Point where green marketing is going to work. My area, Charlottesville, is regarded as being very progressive and the local governments are leading the way with regard to green building and renovation.
We’re nearing the point where “green” will be a byproduct, and not the primary marketing focus. Once that happens and the green aspect fades away, yet the product is still green, the debate will be moot.
Green is the new black.
Again, locally, some developers have recognized this as more than a trend – convincing the builders is taking a bit more time.
November 6, 2007 — 5:19 am
Jeff Kempe says:
Jim …
The marketplace recognizes two things: Is it better, functionally and aesthetically? and Is it cheaper? Given a reasonable resolution of those, then green becomes a factor.
Thus hybrids aren’t selling because they’re green, but because they deliver significant fuel savings without a sacrifice in performance or a high front end premium. Saving the planet is ancillary to all but a very few.
The Oregonian ran a piece shortly after it ran the MLS green rollout – and nearly as breathless in its tone – on green lumber, especially for framing houses. It was something in the way it was cured and brought to market that allowed a green stamp, but added at least 5% to the cost and as much as 20%. Benefit? None except the stamp which, of course, would be invisible, making users having to rely on cocktail party chatter to invoke visionary status.
I asked a friend, a lumber broker, about the demand. He laughed (his business, as you can imagine, is in the tank). Never sold a board foot.
November 6, 2007 — 8:57 am
Listed Green says:
Obviously, there is a growing need for the publics desire to “shop” for (and get educated about) green, energy efficient, sustainable housing, so we developed an exclusive Green MLS that personally screens all information about a green property listing before it goes public.
We have seen some creative wording used in typical homes that are trying to sell in the current real estate market. A wall that “faced south” was a great chuckler, because it really had nothing else. You will see more and more of this type of “green washing”, because some people (and corporations) see an opportunity to “cash in” on the green movement – a movement that has just begun.
November 6, 2007 — 9:14 am
Midland GA Homes says:
As has been said here the tipping point seems to have arrived! It finally makes sense to go green in and economic sense. I have never been a really strong environmentalist but if I can just as easily go green as not. I will choose to go green! I think that is the typical mentality of the public. Thanks for a great post!
November 7, 2007 — 4:17 am
Jim Duncan says:
And that’s my argument. People aren’t doing green things because it’s the right thing to do, they’re doing it because 1) it saves them money and/or is a better value and 2) they don’t know.
The merging of those two reasons is how green will become invisible.
November 7, 2007 — 5:12 am
Sue says:
Great place to get rain barrels: http://www.aquabarrel.com
November 7, 2007 — 5:40 pm
Barry Cox says:
I actually get a ton of questions from buyers about utility bills. Of course I’m in AZ where the A/C bill in the summer can be disgusting. It’s not uncommon to see my electric bill during the summer at $280.00 a month or so.
I also had an HVAC guy out doing some work on my unit the other day. He was telling me that a new Trane unit (one of the best quality units out there)runs about $6,000 . That would be a fun bill 🙁
November 7, 2007 — 10:11 pm
Boston Condo Guy says:
We just received an inquiry from a client yesterday about average heating/cooling costs for a condo in South Boston.
Also of note, we were recently contacted by a London Financial Times reporter who is doing a large piece on green building trends looking for US-based examples of green rehab work. The word, and trend, is definitely getting out there in a big way, and it’s great to see.
November 12, 2007 — 3:00 pm
Stephanie Edwards-Musa says:
Hi Jim, I really don’t get why it seems as though the majority of the real estate community seems to be adamantly opposing the green building movement. I really do not get it. (Worth saying twice)
While I realize that my clients are looking for this stuff, it’s not as uncommon as may say. This stuff will end up being mandated because we as a Nation need to learn to conserve, this is a fantastic way to do it..
This post was well thought out. It’s not Granite countertops anymore.
July 8, 2008 — 12:55 pm
Tony Purcell@completeresources.net says:
As a green builder, I am glad that green has become main stream. That means that customers are now seeking the expertise that I have spent years developing. I did it because it was right to me even though for so long it felt like I was swimming against the stream.
February 13, 2009 — 6:11 am