Getting More Green, At Home and In the Bank

Green living has been on the rise for decades and has come into its own in real estate. Zillow Research analyzed carbon footprints and for-sale listings with energy-related or eco-friendly terms in the country’s 100 largest cities. Nine of the 10 cities with the most green-leaning listing descriptions are in California (Mesa, AZ, is the lonely holdout), but those metros don’t have the lowest carbon footprint. Only two California burgs make the top 10 list of cities with the lowest carbon footprint — the remaining seven are peppered between Boston and Washington, D.C., and New Orleans rounds out the pack — but only 2.5 percent of those listings include energy-efficient terms in their description.

Here are some things to know when helping your clients buy or sell a green home.

Green homes aren’t cheap…

Home buyers who are looking for move-in ready green homes are likely to pay more for one. The research shows that, nationwide, the median list price of homes that claim energy-efficient features is 62.1 percent higher ($299,000) than homes that don’t advertise any green technology ($185,000). If your sellers have energy-efficient amenities, strongly recommend they include them in the listing description. Also, make sure you know how green technology influences the list price.

…Unless there are a lot of them

It’s a classic supply and demand scenario: The premium price on a self-proclaimed green home decreases when more of them are on the market. Buyers in areas with a glut of green homes can afford to be more selective about their choice, so it’s a good idea to help your clients winnow down which energy-efficient features they really want and which will generate a bigger resale value.

Energy efficiency will become more important

Speaking of the future, keep in mind that the number of available green homes will likely increase. Why? Millennials — the next anticipated wave of home buyers — have never known a time when global warming and environmental stewardship weren’t prominent issues; plus, energy-efficient technologies are becoming smarter and cheaper every year. The Zillow Group Report on Consumer Housing Trends found that energy efficiency in new homes is the primary attraction for new construction buyers, and millennials are more interested than any other generation in making upgrades to boost their home’s energy efficiency. If your sellers are open to upgrades before listing, you might suggest they consider making improvements around energy efficiency. If you have buyers who indicate that a green home is their dream home, stay on top of listings with that description or neighborhoods where such homes are likely to go on the market.

Words matter in listing descriptions

The Zillow Group study searched a wide variety of terms that homeowners used to describe their energy-efficient features. Buyers looking for green homes will use the same search terms, so it’s important that your seller clients use the right words to attract these home shoppers.

Green technology is no longer a trend; it’s everywhere and is becoming a growing influencer in how people buy and sell homes. As housing inventory increases, you can differentiate yourself by helping your sellers more effectively market their homes’ energy-efficient features. And as more buyers enter the real estate scene looking for green-leaning homes, you can stand out even more with your knowledge of what to look for — and where.