Green-Certified Homes Sell For More

Build It Green’s appraiser-driven study, the first of its kind in California, highlights price premium of green homes—and evidence that ROI could be much higher

Proper Promotion of Green Features is Key

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A rigorous study, released today by Build It Green and funded by Pacific Gas and Electric Company (PG&E), shows that green-certified homes in California bring a higher sales price, even though market barriers often prevent the full value of the home’s green features from being recognized. The study results add to a growing body of similar findings across the country that show green home improvements provide a financial return on investment (ROI). However, the study also finds significant market barriers to valuing green homes and describes how the price premium could be much higher if key barriers were eliminated.

“We already know that consumers prefer greener homes because they save money, conserve resources, and provide greater comfort and health benefits,” says Karin Burns, Executive Director of the nonprofit Build It Green, which commissioned the study. “Now we can add one more benefit to that list—greater resale value. We also believe that this ROI could be much higher if key market barriers were removed.” For example, while countless homes have extensive green features, relatively few are properly documented, scored, or certified, and green home features are often not listed on the Multiple Listing Service (MLS).

The study revealed several challenges in the proper promotion and sale of green homes:

Challenge #1: The MLS listing of each green sale used in this analysis rarely included more than a comment in the narrative description that showed the property was certified.

Challenge #2: Few real estate professionals can recognize and communicate green home features.

Challenge #3: It is difficult to find homes with energy scores and/or green certifications.