NAR: Promoting energy efficiency proves valuable in home sales
A majority of real estate professionals recently surveyed by the National Association of Realtors said they found it valuable to promote energy efficiency in their listings. However, agents were usually unsure if efficient features resulted in a higher sales price or a shorter time on the market.
In its Realtors and Sustainability 2019 Report, the organization's third annual study on sustainable features in homes, about seven out of 10 respondents said they found it somewhat or very valuable to promote energy efficiency in both residential and commercial listings. Sixty-nine percent of residential agents and brokers said it was valuable to promote energy efficiency, although only 34 percent of respondents said they worked with a client who purchased or sold a home with green features in the past 12 months.
Fifty-nine percent of residential respondents said they thought clients were interested in sustainability, compared to 16 percent who thought their clients were not interested. Fifty-eight percent of commercial respondents said they thought their clients were interested in sustainability, with 14 percent saying they thought their clients were uninterested.
"The state of the environment is important to our members and their business practices, and the report shows that sustainability impacts consumers' home buying decisions as well," said John Smaby, president of the National Association of Realtors. "Realtors remain on the cutting edge of sustainability and continue to lead the conversation about energy efficiency in real estate."
Most residential respondents—83 percent—said solar panels were available in their market. While 36 percent said they thought solar panels increased a property's value, 53 percent said they weren't sure if the feature had an effect or said it did not affect the price. Eleven percent of respondents said they thought solar panels brought down a property's value.
Three out of four respondents said solar panels didn't affect how long a residence stayed on the market, or were not sure if the feature had an effect on listing time. Eight percent said solar panels resulted in a shorter time on the market, while 18 percent said they resulted in more time on the market.
Solar panels were most common in the Northeast, with 94 percent of respondents from this region saying they were available. Respondents in the West were most likely to say they had a beneficial effect on a home's value, with 41 percent saying solar panels helped a property sell for a higher price.
Just 13 percent of residential respondents said wind farms were available in their market. One in three said this feature brought down property values, while 62 percent did not know their effect or said they neither increased nor decreased a home's value. Only 6 percent of respondents said wind farms increased a property's value.
Asked about high performance homes, defined as a "systematic building science approach to home improvements" to enhance benefits such as home health and operational efficiency, 16 percent said this quality resulted in a 1 to 5 percent increase in home value. Fifty-three percent weren't sure if high performance homes were associated with any change in home value, and 17 percent said there was no impact.
Most residential respondents said a green certification had little effect on how quickly a home sold, with 89 percent saying it was unclear if there was any effect or that these homes did not sell any faster or slower than homes without a certification. Four percent said they sold faster, while 6 percent said they spent more time on the market.
Commercial respondents were more likely to consider green certifications to be beneficial, with 11 percent saying these buildings spent less time on the market and 38 percent saying they resulted in a higher value. However, 82 percent said the certification had no effect on listing time or that they were unsure what effect it might have, while 61 percent gave a similar response for how the certification affected the building's value.
Efficient features ranked behind a comfortable living space, proximity to frequently visited spaces, and the age and quality of windows, doors, and siding in terms of features that residential respondents considered to be most important to clients. Seventy-seven percent said they thought a home's utility bills were an important consideration for clients, while 48 percent thought clients were interested in efficient lighting. Just 26 percent said they thought renewable energy systems were important to clients.
Fifty-six percent said they thought clients were interested in commuting costs associated with a home. Eighty-two percent said they thought easy access to highways was important to their clients, while 51 percent thought a neighborhood's walkability was important and 37 percent said bike lanes were an important consideration.
Public transportation was less of a factor, with just 32 percent of respondents saying their clients considered it to be important. Forty-three percent said their clients never asked to see properties close to public transportation, and 26 percent said they rarely received this request.
Respondents were most likely to say clients favored neighborhood qualities such as access to schools, shopping, and outdoor recreation. Sustainability features such as community gardens and recycling fared much lower, with just 5 percent saying their clients were concerned with the former and 7 percent saying the latter was important to their clients.
Commercial respondents were more likely to consider sustainable factors to be crucial, with 81 percent saying they thought utility costs were an important consideration for their clients. Sixty-seven percent said they thought their clients considered efficient use of lighting to be important, while 64 percent said the same about indoor air quality. Specific green features, such as indoor plants and bike racks, were a less pressing concern, with just 29 percent saying their clients considered them to be important.
Twenty-one percent of commercial respondents said prospective tenants had asked about a building's sustainable or green features, with 78 percent saying they received an inquiry about what energy efficiency features were available. Forty-seven percent said they were asked if the building had any green certifications, and 32 percent said they were asked if a recycling program was available.
Real estate agents and brokers were more likely than not to be comfortable answering questions about home performance, with 39 percent of residential respondents and 58 percent of commercial respondents giving this response. However, 36 percent of residential respondents were not sure how well equipped they were to answer these kinds of questions, while 26 percent said they were uncomfortable when they were asked. One in four commercial respondents said they were unsure if they would be able to answer questions about building performance, while 17 percent said they would be uncomfortable doing so.
Forty percent of residential respondents said they were confident that they could connect a client to a lender who could let them know about products encouraging energy efficiency improvements. Thirty-eight percent were not sure if they would be able to do so, and 22 percent were not confident.
The National Association of Realtor's sustainability report was based on 6,047 usable responses to an online survey issued to members in March.
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