The Impact of Energy Efficiency on Property Values
Do houses with lots of energy-saving and sustainability features sell for more than houses without them? If so, by how much?
A newly released study done in California concluded that energy efficient homes sell for an average of 9% more. Based on a large sampling of 1.6 million homes sold in California between 2007 – 2012, the researchers were able to document that energy efficient homes did indeed sell for more. Neighbourhood characteristics and demographics played a role in their findings.
The study was led by Matthew E. Kahn, an economics professor at UCLA, and Nils Kok of Maastricht University in the Netherlands. According to a recent article in the Washington Post, the researchers identified over 4,300 homes that sold with Energy Star, LEED or GreenPoint Rated labels. After adjusting for other factors that could influence value, such as crime rates, time of sale, amenities, etc, they ran an analyses to determine how much green labeling contributed to the selling price. The 9 percent average price premium for green-rated homes is comparable to similar findings of studies done in Europe.
When the McGuinty government here in Ontario tried to implement mandatory energy audits and ratings for homes as they sold, REALTOR® associations and others fought the changes which were ultimately shelved in the Green Energy Act. I have always been on the other side of that coin supporting the concept provided it is implemented in a proper way. But that is all aside from the point at hand.
Owners should be comforted to know that energy improvements done today will not only have the potential to increase the value of their homes but will enjoy the benefits of lower utility costs while enjoying a healthier and more comfortable home.
You can read the full study by clicking here.
It’s always a pleasure to meet new people and to assist them in meeting their real estate goals. If you would like to schedule a buyer or seller consultation with me, please feel free to contact me anytime at 705-446-1762 or send me an email.