Lower utility bills help green homes make the sale
Families searching for a new home have more green options than ever. But those options are typically found in newer or remodeled green homes, which may have a higher asking price. The advertised pay off is supposed to come in the form of lower utility bills for the new owner.
To help prove the point, builders, real estate agents and home sellers are tracking their utility costs in the green home.
For instance, Brookside Development in Woodbridge, Conn., built a five-home development that went above the Energy Star standards for insulation. An energy analyst calculated heating and costs to be about $600 annually, and overall energy costs, including lighting and appliances, to be about $2,000 per year.
The developers compare those projected utility costs with a home built only to state code, about $3,500 per year, and with a home built 10 years ago, at $4,300 per year. They back those claims up with testimonials from people who bought homes in the development, such as an $80 heating bill in January.
In Mendon, N.Y., homeowners Karl and Melissa Sweitzer spent several years turning their home “green.” Now that it’s time to sell, they are using their low utility bills as a marketing tool. The geothermal system cut their electric bill from $327 a month to $156. Other improvements, including green landscaping, cut costs and reduce environmental impact as well.
Georgetown, Texas, real estate agent Edward Lui tracked his energy use after moving into a new home just five doors away from his old house. The new house was 6 years newer but 40 percent larger. Lui attributed advances in building techniques and technology for lowering the utility bills by about $25 per month for gas, water and electricity. One big difference was the new house was insulated with spray foam rather than standard fiberglass batts. Also, the new house has a tankless water heater that cut electricity and water usage.
Energy-saving improvements increase the potential resale value of a home because the lower utility costs make it more affordable to more people, according to a report from the U.S. Department of Housing and Urban Development.
Unfortunately for people selling their green homes, the real estate market doesn’t always reflect the pride and dollars that were invested. Finding similar homes to analyze comparable sales prices can be a problem for appraisers. Also, investments that make a personal statement, such as handcrafted marble countertops or a solar water heater system, typically aren’t reflected dollar for dollar in a home’s asking price.
The utility bills are one way to show potential buyers that the asking price of a green home will pay off in the long run.
“In the future, buyers will be more interested in those utility bills,” said Sandra Adomatis, SRA, an appraiser in Punta Gorda, Fla., and a member of the Appraisal Institute. “That will make every dime a person spends to improve the energy efficiency of a home a real asset to the resale value.”
While resale return on green improvements is not 100 percent, the homeowner does have some benefits.
“The homeowners are getting a payback every month in their utility bills,” Adomatis said.