I thought I’d some green trends I’m seeing in the real estate marketplace right now. This isn’t proven, specific data but these are real trends I am seeing on my projects all over the US. Right now I am working (or about to work on) projects in NJ, Pittsburg, San Diego, Los Angeles, Detroit, Florida, Arizona. Here’s what I’m seeing:
1. Buyers start off not knowing much about green. Once the value is explained to them they often become green evangelists. I cannot tell you how many enthusiastic buyers contact me on green topics once they’ve been exposed to the benefits of green. These are people who originally scoffed at the idea of going green but now email me to talk about energy audits and Paperstone counter-tops.
2. Listing agents like getting green offers. I’ve started writing intro letters to accompany my clients offers to listing agents. Since we started that process, we’ve had much better success than I would have thought. A client recently jumped ahead of 30 other offers on a short sale largely due to the letter we wrote. The listing agent said she was impressed and the negotiator liked the fact that the property might be greened up in the future.
3. The value of certifications (LEED, Built Green, Energy Star, etc.) is reaching a plateau. Some (LEED) may be even losing ground. Buyers/renters aren’t seeing the value of the certifications vs. the cost of certification. Most certifications talk mainly about the materials used and the way buildings are built/remodeled. Those are one time impacts and costs. Buyers/renters care much more about the operations of the building because that is an ongoing cost. The exception to this is the Energy Star program, which measures the operational efficiency of a building. it’s a great program in my opinion.
4. Suppliers/vendors will cut you deals if they know they are providing materials/services to a green project. On a recent project in Buena Park, California, we were able to get a 15% discount from Home Depot for all of our materials/appliances. A good portion they did not have in stock and had to special order for us but they gave us the discount anyway. I’ve seen this happen with other vendors as well. My rationale is that they see this as a business channel that they cannot ignore any longer.
5. The definition of ‘green’ remains woefully undefined. I usually spend the first 15 minutes of every conversation with a new client/vendor/buyer/renter/editor/whoever explaining my view of the definition of ‘green’. This seems to be a universal law no matter who I’m talking to and what part of the country they live/work in.
6. The new home market (what little there is of it) is largely adopting green building practices. Most new home contractors are conscious of building green and are putting out some great product.
7. The list of green replacement products continues to grow exponentially. In addition the cost of these products continues drop. A few years ago it was virtually impossible to find eco-friendly, non-toxic carpets or cabinet stains. Now you can find many online and even in your local home supply store. A ‘green replacement product’ is simply a product that replaces (at a similar or lower cost) a typical building material/product. Carpet, stain, caulking, paint, recycled switchplates are all good examples.
8. The gap between green experts and the general public continues to widen. It continues to amaze me that experts who can create solar panels that move with the sun cannot explain the concept of payback period to an investor. As technology increases the public grows more confused with the variety of options. The experts worth their weight in gold are able to bridge the gap between the technology and the true application/value to the investor/owner.
9. While green building codes continue to advance, city employees tasked with enforcing them are lagging behind. So while the new codes and regs are great, they’re tough to enforce because city employees haven’t been trained on them. This ends up stalling a lot of projects.
10. The supply of rebates and incentives continue to dwarf the applications. Tons of rebate money available continues to sit on the sidelines because investors/owners either can’t find it or don’t know how to apply for it. This issue is largely due to the lack of a national central database or uniform application process for everyone to use. DSIREUSA.ORG still remains the best option to see what is available.
These are the ten biggest trends I’ve seen lately. I’m very interested to hear your thoughts/see what trends you’re seeing in your area in regards to ‘green’. Please feel free to comment or email me directly. Thanks..Jim