What is going “green” worth in Washington home real estate? If you rehab a house to exacting energy and environmental standards, or install a solar-panel array on your roof, does your house command more when you sell?
If you seal up all the energy-leaking areas in your house, install a highly efficient heating and ventilating system, new windows and a long list of other green improvements, will a future buyer pay you a premium price for your efforts?
A new study conducted by national appraisal experts says the answer most probably is yes — often tens of thousands of dollars more.
Funded by the D.C. Department of Energy and Environment and assisted by the nonprofit Institute for Market Transformation, the study employed a sophisticated “paired sale” analysis of homes sold in the District between February 2013 and June 2015.
Appraisers matched individual “high-performance” energy and resource-conserving houses against multiple homes similar in type and location but without green improvements. They then calculated the extra dollar increments buyers were willing to pay for the green features and found they ranged from $10,343 to $53,000, or an average premium of 3.46 percent. Some premiums on individual houses ranged as high as 6 percent to 7.7 percent, and were enhanced when properties had photovoltaic solar arrays to slash electricity costs.
According to the study, green features in renovations and new construction represent “a growing trend” in the District. As of September, there were 457 LEED-certified homes and 329 Energy Star homes as of August. LEED stands for Leadership in Energy and Environmental Design. LEED certification involves independent evaluation and verification that a building or an entire neighborhood meets high energy efficiency and resource conservation rating standards set by the U.S. Green Building Council. Energy Star certified homes must meet rigorous energy-savings standards prescribed by the Environmental Protection Agency.
Research published in 2015 documented strong demand for high-performance homes in the District: 18 percent of total residential sales and 29 percent of sales in the Friendship/Chevy Chase area (Zip code 20015) had one or more green features associated with the house. The high-performance homes used for paired sale analysis in the new study were scattered among neighborhoods in Northeast and Northwest and consisted of renovated older row houses, detached single-family homes and one high-rise condo unit. The median sale price was just over $693,000, though two homes sold below $500,000 and one went for $817,000.
Perry, who teaches Latin at the National Cathedral School, says he and his wife weren’t even shopping for a house with green features. “We were mainly just looking for something that we could afford and that was old and had a good location,” Perry told me. Though they visited and considered a number of competing, non-green but comparable houses in roughly the same price category, they ultimately found the case for the Petworth property compelling.
“We were really intrigued by the solar panels and with the possibility of savings on utilities,” Perry said. The closer they looked at the green features, the more they saw: energy-efficient new windows, a commercial-grade air exchanger to keep the interior air fresh and recirculated at all times, super-heavy insulation, a heat recapture system that employs waste hot water to save on the energy costs of heating water, to name just a few. The solar array was bigger than the average system used for houses of this size and promised to cut electricity bills drastically, which it has in the months since they moved in. “We really like it,” Perry said, but he conceded that he has not quite figured out the “net metering” system that adjusts their bills based on how much energy they have been contributing to Pepco.
Even better, according to the study, Perry’s five-kilowatt photovoltaic equipment on the roof could be eligible for between five and eight Solar Renewable Energy Credits (SRECs) per year over a three-year contract. “Over this time period, the study reported, “the SRECs are valued at $7,500. Besides the energy produced by this [solar] system, the owner may receive income for three years.”
Tanya Topolewski, a D.C.-based green real estate developer who rehabilitated and sold two of the other houses appraisers selected for the study, says it is not surprising that Perry and his wife were not shopping specifically for a high-performance house. “The vast majority of people who come to see our houses are just interested in real estate,” she said in an interview. But once they see the advantages of buying a home with extraordinary energy efficiency, fresh air 24/7 and a positive environmental impact, “it’s kind of a no-brainer.” Topolewski says creating a truly high-performance home can be daunting, especially converting old, leaky rowhouses in the District. Both of her houses in the study are certified LEED Platinum, the highest rating possible.
But, she says, “there’s quite a bit of building science involved when you do a renovation from a low-performance home to a high-performance one. This has a name, actually — a deep energy retrofit” — and it is usually not a do-it-yourself type of project.
To read the whole article at Washingtonpost.com- https://www.washingtonpost.com/realestate/going-green-can-add-value-to-your-home/2016/01/25/e24c1486-8c86-11e5-acff-673ae92ddd2b_story.html
The message to buyers: Even though you may pay a modest premium for a high-performance house, it will probably save you substantial money over a period of years in energy costs and almost certainly will be a healthier place to live.
Evers & Co.