“In the United States, the cost for protecting people and property from rising seas and intense downpours is expected to climb into the hundreds of billions of dollars in the coming decades — and that’s a conservative estimate”
When I talk about market transformation with some of my real estate colleagues they sometimes will react by nodding there heads and politely smiling, but you can almost hear their minds saying, "WTF is this guy talking about, real estate market transformation? Seriously? Just concentrate on selling homes, dude"
When I reference market transformation in my head I see the images of hundreds of devoted individuals who are spending their professional careers working on and delivering tangible outcomes. I love these people.
Highland Street Weston project article on the green certifications we are pursuing by developer Steve Snider. If you have wondered about the value proposition of independent 3rd party certifications, this article should help clarify your thinking…
What does high-performance mean to home buyers? Evidently quite a bit.
Download Craig's case study on the E+Solutions condominiums versus code-built construction
) Long-term investors- including banks, GSEs, and insurance companies- take a serious look at the impact of climate change on their bottom line
2) The high-performance home market continues to gain traction, particularly in the new construction market
3) Consumer demand for sustainable products continues to rise
4) Backlash against climate-change deniers increases
5) Science/data makes a comeback
6) The National Association of REALTORS® makes major advances at the intersection of sustainability and real estate
7) Inman makes sustainability a key talking point
1) Stock market experiences a correction
2) Interest rates rise
3) Affordability remains a major concern in the real estate industry
Using data from the multiple listing service most real estate agents use in MA, MLS PIN in Shrewsbury, MA, here is a quick update on the high-performance home market. MLS PIN is a leader in advancing green data fields in their MLS. They were an early adopter of fields in 2009, and did a significant update of fields at the beginning of 2015.
As I have blogged, under-reporting of green certified homes is a problem. There is clear evidence that agents without knowledge and competence in green features and certifications have under-reported green certified properties in MLS PIN by as much as a 3.5 to 1 ratio.
Currently there are 34 single family homes with some type of green certification currently available. Single family homes with a reported HERS Index Score is 72 properties that are currently for sale.
There are 16 condos currently active with some type of green certification and 28 active condos the listing agent has entered a number for the HERS Index Score field.
When a listing agent enters information into their MLS to market a property, there are a number of fields that they can use as a quick reference guide for a potential home buyer. These fields include items such as square footage of the lot and home (often times auto-populated from a tax record database) the number of rooms, bedrooms and baths. Fields may even extend to green features - green certification of a home (LEED, NGBS) or if the homeowner/developer has had HERS Score completed on the property are becoming more coming in MLSs.
MLSs also have a remarks section where the listing agent is able to describe the home and its features in more detail than just the fields. The remarks section is what most home buyers view when the go to Zillow, Trulia or Realtor.com - the description of the property and its features was entered into the MLS.
Times "energy efficient" used in MLS PIN 2011-2015
Real estate agents are becoming increasingly aware of the benefits of a home with lower operating costs. A thorough review of the total cost of home ownership should include not only principal, interest, taxes, and insurance, but utility and transportation costs as well as upkeep.
In 2015 MLS PIN, the largest multiple listing service in the state of MA, updated their green data fields. Data base fields in the MLS are the central nervous system of the real estate transaction. The fields are used by consumers searching for specific features different homes offer, and by appraisers searching for accurate sold comps to establish valuation. Accuracy of the fields is essential for a healthy marketplace.
In April, 2015 MLS PIN added the last field of the 16 upgrades to their green data list: the HERS Index Score. A HERS rating is a rigorous third party verified evaluation of the home's energy efficiency. The U.S. Dept. of Energy estimates a typical existing home to have a HERS score of 130-140. New construction homes modeled from the IECC 2006 building code rates at 100 (like your golf score the lower the better with your HERS score). In order for new construction in MA stretch code communities, a home must reach HERS scores between 65-70 depending on the gross living area of the home. LEED Platinum homes many times reach HERS scores in the 30's - and, the holy grail of building science is a HERS score of 0. Net zero homes include some source of energy production on the end user side of the meter (in MA solar PV is the typical choice). The energy production coupled with an extremely efficient design produces homes that produce as much energy as the use on an annual basis, hence the term net zero.
Reviewing the 2016 numbers to date in MLS PIN: 305 single family homes were listed with a HERS Index Score field entered. Of these 55 single family homes indicated the home had a HERS Score of 0 - the holy grail of building science.
In order for a home to reach net zero it must be utilizing some type energy production on site. Of the 55 homes that said their homes had a HERS Index Score of 0 only two had any evidence of solar PV in the pictures or remarks and one indicated the home had geothermal (this home also was marketed with rigorous R-45 wall and R-65 ceiling insulation).
Of the 55 homes listed with a HERS Index Score 40 were built in 2015-16. 18 were marketed as Energy Star Certified, 2 as LEED certified and 1 was NGBS certified.
I also did a key word search of "net zero" and 11 additional properties were marketed using the term, none of which used the HERS Index Score data field in MLS PIN. Ten of these properties were built in 2015-16, and nine of the properties indicated they were "net zero ready" if the buyer purchased a solar package with the new construction.
1) It is clear that many listing brokers are confused about what a HERS Index Score is, and what the score means.
2) The misinformation could lead to significant distortion of the high performance home market as appraisers look for accurate comps.
3) Agents using inappropriate HERS Index Scores could be accused of greenwashing.
4) More real estate industry education on this subject is needed.