93% of Home Buyers Won't Pay More for Green Home Features

Benjamins

In the Spring 2008, the NY Times commissioned a study to learn how the real estate market and economy may be affecting people’s attitudes towards buying a home.  Their study skewed young, affluent, and New York/Metro area (with roughly 250 NY participants).  It was also conducted in two-stages with the online study portion first and a follow-up interview second.  They concluded the study with Five Core Insights, with the following two points relating to environmental concerns:

  • 93% of all home buyers, both nationally and in the NY Metro area, ARE NOT willing to PAY MORE for green or energy efficient features when building a home. 
  • Consumers said that green features that save them money, such as energy efficient appliances, are important, while green features that are capital-intensive are less important. 

So what’s to explain with these insights?  It could be that young buyers think they don’t need to pay more for green features, but I doubt it.  I think what we’re seeing here is that in a tougher real estate market, the pocket book comes first, and the environment comes second. 

What does that mean?  For one, we probably need to do a better job making green features more economical.  For two, maybe we need a Green MTV Cribs (you’ll have to read the entire study to get that).

[+] Five Core Insights [PDF - NY Times]

Yes

Cribs

Via EL.


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  • Josh

    Green already doesn’t cost a penny more, if done right!

    The flashy stuff will always cost more, like solar panels, if only for the simple fact that it costs more to buy something, anything, than to not.

    That said, the invaluable elements of sustainability can actually cost less.

  • http://www.postgreenhomes.com Chad Ludeman

    One more reason to make “green homes” just as affordable as the standard home on the market. Good builders and developers should, and in the future will, build every home green for the same cost as their non-green competition.

    Also, results to these types of surveys may be different if the questions were phrased differently. Instead of asking if people would be willing to pay more for green, I wonder how the would respond to a question like the following: “Would you be willing to pay slightly more for a home with green features If your total monthly mortgage and utility bill was the same as a non-green home due to the cost savings on your utility bills from the energy efficient features in the green home?” In addition to utility bill savings the green home would also be saving an equivalent amount of carbon as taking X number of cars off the road would result in. Substitute oil or coal or anything popular in the energy news today that people would relate to. This is all without even touching on the health and sustainability factors that should also be built into the home.

    If we just built homes smarter and phrased these questions differently there would be over 90% of the respondents answering yes to green homes no matter what the market was like. OK, I’m done with my rant. That video comment button down there looks tempting for next time.

    • http://www.jetsongreen.com Preston

      I was kind of surprised by the findings, but withheld my criticisms for the process because they didn’t really reveal the specifics of their first and second round questions. In addition to the problems presented above by Chad, in bringing someone in for round 2, that person has an incentive to remember back to the first round and try to answer the second round based on what the surveyor is looking for. I’m just not sure how legit the study was.

      We’ll have to take it for what it’s worth and just keep it in the back of mind. It’s one piece of the puzzle in extrapolating and contemplating future trends in this area.

  • http://www.ecozebra.com Andrew Stone

    I agree @chad ludeman. In my experience as a Realtor, if you put the two homes side be side on the same street and one is $30,000 more with an energy efficient furnace, tankless water heater, Energy Star Appliances, new ee windows and extra insulation, they will choose the more expensive home, even if the two look exactly the same from the sidewalk. All of these things are work they won’t have to do when they buy the home and typically it is work that today’s buyer is looking to do down the road. These features still can’t be found in MOST homes so it is expected that you will have to do it yourself.

    Secondly, most people arrive uneducated about the utility savings. Once you educate them, the attitude changes. That is where your more detailed question above comes into play.

    Of course this hinges on the fact that the buyers need to be looking within their QUALIFIED price range. Not above it. If they are qualified to spend up to $280,000 they can’t be looking at homes in the $300′s. Many agents tend to show $300,000 homes to this type of buyer with the hope that they can negotiate down. Sellers of homes with the greener features are typically not as willing to negotiate. They don’t have to be.

  • http://www.everblueenergy.com Chris

    I’m not surprised by those results. Most people won’t change to CFL lightbulbs even though it the payback is only a few months and it takes little effort at all.

    Since I like living a green lifestyle, I’ve often just assumed that everyone else thinks the same way… then I go visit my parents house and realize most people haven’t changed much at all.

    Chris
    Everblue Energy

    • http://www.jetsongreen.com Preston

      I’m laughing about your last paragraph, Chris, because it’s really true. It’s going to take a while to make some serious changes. Stuff has to be affordable to get there, though. Flat out, people have to be able to open the pocket book for this stuff.

  • mattnnz

    Does anyone have any links to green build material as well as green building methods? I think the way to go is build more mild green homes through use of recycled materials, increased efficiency, innovative new materials while keeping the styling more conservative.

    • http://www.jetsongreen.com Preston

      Browse our materials archive and feel free to peruse our green links page. There’s something in there for everyone.

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