Increasing the Market for Green Building

Building upon our exploration of green building trends, major practices, and resilience strategies based on The Building Sustainably: Green & Resilient Single- Family Homes 2024 SmartMarket Brief, this article now shifts focus towards ways to increase green building within the housing market.   

Top Incentives to Build Green 

The survey asked all respondents to select the top three factors that would increase their engagement with green building in the future. Half of respondents listed increased home buyer demand for green homes in their top three reasons. The second highest at 48% was availability of government or utility incentives in my area. Third, at 37%, was available, affordable high-quality green products.  

Methods of Showcasing Green Homes 

Home builders and remodelers who have built green projects were asked if they utilized any of the six approaches provided to demonstrate their projects were green. The top method was using a Home Energy Rating System (HERS) score at 39%. This was followed by website marketing at 35%, which had notable regional differences. Website marking was most used in the Northeast (60%), then the Midwest (52%) and West (43%), but it was least common in the South (20%). The other four approaches listed were: third-party certification (34%), MLS information (33%), silent salesperson signage (20%), and green appraisal form (6%). 

Terms for Describing Green Features 

Home builders and remodelers who do green home projects were asked to rank the three most effective terms for talking to their customers about green-related features from a list of 12 options. The most effective term was “High Performance” at 49%. The second highest at 46% was “Quality Construction” while third, at 44%, was “Operating Efficiency”. The complete rankings are shown in the chart below. 

Home Appraisals 

Home builders and remodelers were asked how frequently home appraisals accurately reflect the added value of a green home. The majority of respondents (60%) reported that they never see this occur. The second highest were those that said infrequently at 22%. Notably, there are no significant differences between the responses of builders and remodelers or the respondents from the four regions. This suggests accurate home appraisals are a significant challenge across the green building industry.  

MLS Listings 

Home builders and remodelers were also asked about the frequency with which green features are reflected in MLS listings, the database used by realtors for home sales. Less than one-third (31%) listed never, comparatively less than with home appraisals. However, infrequently was listed at 41%.  

In order for builders to supply green homes, there needs to be a home buyer demand. As we have seen, the prevalence of green home construction has seen little growth over the past few years. Contributing to this is the fact that consumers are not able to reliably compare homes with green elements to those without them. This is seen when green home appraisals and listings do not accurately reflect the added value of green building. The sustainability & green building industry faces headwinds to gain appropriate recognition from consumers about the advantages of green homes.