nvironmentally friendly upfront costs for solar panels or
residential real estate has an energy-efficient furnace.
been around for a long Thus, the residential real estate
time, but it was confined to a builders are trying to balance
niche market of custom and small between what they see as their
niche builders. With the success “social obligation” to the
of former Vice President Al environment and the obligation
Gore’s movie “Inconvenient they owe their shareholders.
Truth”, the public eye is again
turning to the environment. That Jeffrey Mezger, CEO of KB Home
includes homebuyers of (one of the nation’s largest
residential real estate. homebuilders), underscores this
sentiment. He points out that
With this increase of “green” homebuilders cannot give away
public interest, many giants their profits. They would not be
within the home construction in business for long, if they
industry are now building did.
environmentally friendly homes,
but they have encountered a Some environmentally friendly
paradox — homebuyers want green features being built into some
residential real estate, but they residential real estate are:
do not wish to pay the upfront
cost of having it. With the • Wood that is harvested in an
serious slowdown in new home environmentally friendly manner,
sales, residential real estate using the Forest Stewardship
builders are caught in the middle Council guidelines. This can add
of the issue. It is easier for $3,500 in cost to a $700,000
them to persuade a potential home, according to a BusinessWeek
buyer to upgrade to granite article in its February 12, 2007,
countertops than to pay the issue.
installation of solar-electric
• Environmentally friendly bamboo panels by homeowners is on the
can be used for flooring. rise. According to the Solar
Energy Industry Association, use
• Front loading washers use 60 of solar panels increased last
percent less water and year by 75 percent. This 8,512
electricity than top loading increase, however, represents
washers, though most homebuyers only a fraction of the one
of residential real estate million new homes sold across the
purchase such appliances nation in 2006.
themselves.
Help for environmentally friendly
• Solar panels pay for themselves residential real estate may be
within a matter of years, but coming shortly from three
homebuilders are finding them a separate sources — federal, state
hard sell. The upfront costs are and local governments. It is
about $25,000 on average. expected that the federal and
state governments will soon make
• Satellite-controlled sprinkler subsidies available to homeowners
systems for the lawn conserves a who install solar panels. The
lot more water than conventional subsidies could cut the upfront
systems. costs by half. Additionally, the
building codes of many local
• Decks can be made of recycled governments are much more
materials. environmentally friendly than in
the past, forcing homebuilders to
Though such features add to the include green features in their
upfront price of residential real new residential real estate.
estate, which most current buyers
are not willing to pay, the Another plus for green
residential real estate are the percent per square foot since
firms that supply the 1970.
construction industry. Many now
offer environmentally friendly With all of these sources
products to the homebuilding encouraging environmentally
industry in volume prices, making friendly residential real estate,
the use of green products more green features may soon be
cost competitive. These efforts standard in all new homes at a
on the part of suppliers has fraction of current costs.
decreased energy consumption in
new residential real estate by 30
About the Author:
John Harris is an expert researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more information please visit San Diego Homes
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John Harris
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