Wednesday, April 13, 2011

IS GREEN BECOMING IRRELEVANT IN NEW HOMES

The big push we've seen over the past 5-10 years toward green construction seems to have become irrelevant lately.  I read tons of articles, visit lots of builder websites and talk with factory owners and something is becoming very clear.  Green is falling out of fashion.
With the housing business in the doldrums and lenders putting the brakes on new home loans, going green with its huge upfront costs and minimal returns for the homeowner, it's no wonder that builders and modular home factories are no longer jumping on this bandwagon.

The buzz today is about ways to cut energy and maintenance costs without a lot of front-loading for the home buyer.  Show them how they can get their added investment back within 7-10 years and they will buy them.  Show them that an huge investment in green will help save the planet but not give them any personal return and they seem to be shutting off the money flow.

It appears that the treehugger types have had their moments of getting us aware of the planet's problems but now the housing crisis has all but killed off their push for a greener planet.  Besides, how many new home buyers really want the upkeep required in some of those green, earth-saving products.  It looks like less of us every month.

7 comments:

Modular Home Place said...

I am sick of hearing about being green. Green really does start with blue - Energy Star Blue. The benefits to building an Energy Star home include: comfort; increased durability; healthy indoor air quality and energy savings.

According to Sam Rashkin, twenty six percent of the homes built in the 2010 were Energy Star homes.

Your comment about the seven year payback period kills building better. What would people rather have a granite counter top or lower energy bills. With energy prices on the rise, building energy efficient and saving money will become more important.

One of the best elements to the green craze has been to make builders aware that the way that have been doing it for years is no longer working. Some of the modular home manufacturers do not take the time on the line to properly install insulation. Being green can also mean building right.

I have completed thermal bypass checks on a number of factories - some of them do a great job and do it right. However, there are others who have no clue and do not care to have a clue.

Sam Rashkin has also said "Building science is not rocket science" it is not hard to build better by installing existing building materials correclty.

Harris/FW said...

I agree Coach and MHP: the term "green", while still pulling traffic to our website from web searches, means little more than energy efficiency to most folks we end up speaking to. Our experience here in the Balt/WashDC corridor is borne out by an increase in the number of Passive House projects that are starting up around the U.S. - a design method that is almost entirely focused on putting the screws to the electric companies.

What continues to amaze me is that most builders don't know how to sell energy efficiency (aka High Performance construction).

For some reason they try to justify (in other words, beg) spending $5000 to make a home more efficient. What they can't/don't/won't do is explain that the $5000 worth of hi-perf insulation and windows is actually $40/mo on a 30yr mortgage. BUT THE SAVINGS ON THEIR HEATING/COOLING BILL MIGHT BE $75/mo.

The above calculus is based on energy costs TODAY. You can drive home the final nail in the coffin by asking them where they think energy costs will be in 10yrs when they're living on retirement... we have yet to have anyone tell us they think energy costs will go down.

If you can get past potential appraisal problems, this is, as they say, a no-brainer.

Green is about high performance building and its about RIGHT-NOW ROI. And I am more than happy to convert "green building" inquirers into "save money on utility bills" buyers.

It's starts with acknowledging the difference, adjusting, and educating the buyer.

Anonymous said...

Gary,

This is the funniest thing I have read on your site in years. I always sell base on common sense and overall budget. If a tankless water system is an extra 2k how long does it take to recover your money? WIll a customer by an a New Old World Green Homes and pay an extra $60 a square foot? It all comes back to the green in the wallet. There are many things a person can do to feel good about themselves. One is buying a house they can afford. Energy efficiency is very important and relates to quick dollars.

Great article!!!!!

JD

Anonymous said...

Harris/FW I like the term "might be" when describing POTENTIAL savings from going green. The true value is in the payback. How long will it take to recapture the extra dollars expended to have an (insert your choice of terms) home? I do not see many builders touting the quick payback. Is it because it is not a quick return? Are there other things one can do CHEAPER than those "greenies" tout as the best thing to happen to new home construction since the roof truss?

Jonathan said...

Great conversation.
If I spend $5000 for energy efficiencies at $40 a month savings it will take 10 years to break even.

If I invest my $5000 the money should double every ten years.

Therefore the real break even on the "green" investment is 20 years.

Does this sound like a good investment. 20 years to break even?

Nathan George said...

green energy is great but it HAS to be done in with energy efficient products from start to finish. it makes little sense to throw solar panels on a poorly constructed stick built home from the 70s.

Nathan George, Traba Homes
www.trabahomes.com

Walter said...

Your investment value only works if you invest $5000.00 in cash. If I borrow the money, $5000 at 6% for 20 yrs, then it cost me $35.82 per month vs $40 per month savings if energy cost stays the same. I doubt it will go down any time soon.