Building America’s Experts’ Meeting on the role of Appraisals in Energy Retrofits

June 23rd, 2011

Fiona Douglas-Hamilton presented as part of a panel at the Building America Expert Meeting: The Potential Role of Appraisals in Retrofit Financing hosted by BIRA held in San Francisco June 21st.  Broadcast as a webinar, the meeting was designed to identify research priorities and opportunities that address key barriers to appraising energy efficiency, review and identify gaps in the current research activities, and identify synergies and build partnerships.

Residential Green Valuation Roundtables Update

June 16th, 2011

There has been a hiatus in our blogs due to the very tight schedule of roundtables we have conducted in Olympia, Seattle, Vancouver, Spokane and Boise, Idaho these past couple of months.  We are now in the report out phase.  With the recent accouncement of  collaboration between The Appraisal Foundation and the U.S. Department of Energy (see our previous blog)  to collaborate on a series of activities focusing on energy efficiencies and the valuation of green buildings, the findings from these residential green valuation roundtables frankly could not be more relevant.  Watch this space.

Appraisal Foundation and U.S. Dept. of Energy to collaborate on Green Valuation

June 16th, 2011

The work SEEC has undertaken in the Pacific Northwest over the last couple of years to highlight the interrelatedness of valuation and green building in the residential sector is now starting to be undertaken at the national level.  In the Appraisal Foundation’s Press Release of June 13th, 2011 the importance of energy efficiency was recognized as “gaining traction throughout the marketplace”.  The MOU signed between the two organizations relates specifically to commercial buildings though.  This is not surprising since this is where the big $$$s are concentrated.  Also, the sometimes significant savings on energy consumption associated with green buildings can be realized by commercial building owners and can be used by the appraisal industry to create added value using the income approach – already the weighted approach in commercial appraisals. 

The struggle is in the residential sector where the income approach for energy savings may be used to justify an adjustment, but only as long as it can be supported by the primary approach -  the market or sales comparison approach.

Nation’s Largest Publicly Traded Builders Adopting Green led by Energy Efficiency

April 4th, 2011

What are some of the indicators that real estate professionals and appraisers use to gauge the average buyer’s sentiment to green and energy efficiency?  When green and energy efficient building practices are adopted by the nation’s big-builders.

According to a survey “A Green Recovery for America’s Homebuilders?” released December 2010 by Calvert Investments, builders who embrace green-construction objectives, such as energy efficiency and water conservation, will have a leg up as the housing market tries to find its footing.
 
The survey focused on the 10 largest publicly traded homebuilders and the degree to which they’ve integrated sustainability into their practices and products, and follows-up a similar Calvert survey conducted two years ago. The 2010 survey covers five principal areas: land, building materials, energy, water, and climate change.

The green initiatives that builders, led by KB Home and Pulte, tend to pursue most vigorously are driven by their potential to reduce operating costs and their financial benefit to customers.  The survey report noted that companies are most active “in programs that will increase the energy efficiency of the homes they build.  That finding is in line with a J.D. Power survey, cited by Meritage Homes on its website and noted in the Calvert report, that, among homeowners who have purchased a “green” home, 94% reported they purchased the home because of the savings they would see on energy bills” (taken directly from the Fine Homebuilding Blog by Richard Defendorf).

Residential Green Valuation Roundtable Series – a First!

March 29th, 2011

Created by SEEC and sponsored by Northwest ENERGY STAR ® Homes, a program to deliver ten green valuation roundtables in major cities across WA, ID, MT and OR kicked off March 25th with the first roundtable being held in Olympia, hosted by local partners the Thurston Climate Action Team and Evergreen College.  The second in the series is being held in Bellevue this Thursday, March 31st hosted by local partner Built Green® King Snohomish.

Here’s some feedback:

Nice job today. I walked away with some good stuff and some new insight” – Cory Eckert, Laupen Homes

and a News Flash issued by TCAT TCAT Valuation Roundtable News Flash

Homebuyer sentiment in WA shifts from square footage to quality and energy efficiency

March 15th, 2011

Quadrant Homes built its reputation in WA on the fact it built homes with more space for less money.  This approach was right in line with consumer demand for ever-increasing square footage.  But behind the scenes Quadrant was starting to embrace some of the principles of green building by producing homes to Built Green® 3-STAR standards and ENERGY STAR® certification was offered to homebuyers as an option.  But there was a disconnect between their marketing message “More House, Less Money” and their entry, under the Built Green® program, into more resource efficient construction methods.  No longer though.

As of the beginning of 2011, Quadrant is building all their homes to the new 2011 Northwest ENERGY STAR® standards.  So why does one of the most succesful production home builders in WA make such a commitment?  Following on serious market research conducted July and August 2010, Quadrant received the message loud and clear that while they still enjoyed a high brand awareness level, homebuyers’ expectations had changed.  “What happened was this buyer became more discerning as the market started to turn down,” said Ken Krivanec, Quadrant’s president.

As a result of the research, Quadrant immediately began to shift the company’s focus away from “More House Less Money” to “Built Your Way” in what the company calls an “Evolution to a Revolution.”  The revolution?  Homebuyers are seeking quality over quantity and are willing to sacrifice square footage to achieve that.  “Our [average] square footage is down year-over-year,” said Krivanec.  The market research also showed that energy efficiency was important to buyers – hence Quadrant’s commitment to build to a higher energy standard.

Other production builders should take heed.  Quadrant’s success has come from the fact that it gives homebuyers what they want.  And what they want now are smaller, higher quality, energy efficient homes.

Consumer Survey finds Green Certified agents important

February 17th, 2011

A Better Homes and Gardens Real Estate Living Green Consumer Survey released Nov 2008 found one in three homeowners (30%) claimed they would be willing to spend $5,000 or more on green improvements to increase a home’s appeal to potential buyers. 

Additional survey findings revealed that when preparing to buy or sell a home, more than half of those surveyed (51%) believe in the importance of working with a green certified real estate agent ― professionals who can assist in the identification and marketing of homes with high green quotient.  This would include knowledge in regards to housing materials and construction, energy efficient appliances and systems, as well as the impact of landscaping on a home’s environmental footprint.

Yet more evidence that consumers want agents qualified in green building to represent them.  Take the Green Agent Essentials Course May 9th and 10th through Seattle King County Association of REALTORS.

New Survey Indicates Green Features as a Priority

September 29th, 2010

A recent survey of homebuyers registered on www.ZipRealty.com revealed that 55 percent of survey respondents rated a home’s green features a “somewhat important” or “very important” part of their home hunt.

Other highlights from the survey include:
•Homebuyers who view green features as a priority ranked them important because they helped save money (49 percent), as well as allowed them to do their part to help the environment (40 percent).
•Other reasons homebuyers valued green features included occupant/family health (37 percent), tax credit availability (12 percent) and the home’s resale value (15 percent).
•Although homebuyers overwhelmingly rated energy efficiency the most important green feature in a home (89 percent), an additional survey conducted by the brokerage of MLS-listed homes across the 35 markets nationwide ZipRealty serves found that less than one percent of homes on the market included the term in their description of the home.

See Aug 18th BuildingOnline news service for full story.

The interrelationship of Value and Sustainability

September 28th, 2010

Welcome to Our Blog on the interrelationship of valuation and sustainability in the residential building sector.  Since valuation is a matter of opinion, informed by the market, the need for up to date information and education for those involved in building, buying, selling and valuing green, energy efficient, high performance new homes and retrofits in the Pacific Northwest becomes paramount.

We will not only post latest data, trends, marketing reports and case studies as they come available, but with this blog provide construction industry professionals with a neutral forum for frank discussion around the current issues and constraints facing appraisers, real estate agents and the development community when establishing value for green and energy efficient new homes and retrofits.