Impact Study of Energy Efficient Homes on 2012 MA RE Market

Energy Efficiency, Utility Costs, and High Performance Homes Study

2012 Massachusetts Residential Real Estate Marketplace impact Study Released

Winchester, MA, February 28, 2013 – The Study of Energy Efficiency, Utility Costs, and High Performance Homes on the Massachusetts Residential Real Estate Marketplace 2012 by Craig Foley, Chief of Energy Solutions at RE/MAX Leading Edge and a Managing Partner of inCharge Energy, has been released. The study is the first of its kind in Massachusetts and analyzes home sales data of high performance homes and their effect on the Massachusetts real estate marketplace.  This study of the emerging high performance home market will have industry-wide ramifications and will serve as a base line marker for future studies.

Study findings indicate that:

·         Buyers paid a premium of $11 per sq. ft. for houses heated with natural gas versus homes heated with oil within the RE/MAX Leading Edge market territories.

·         Natural gas heated homes sold after less market time than those heated with oil.

·         Homes heated with natural gas sold at a higher percentage of the list price than homes heated with oil.

·         Converting from oil to natural gas to heat Massachusetts homes both reduces the carbon emissions of an average home by 1-2 tons, and reduces utility bills by an estimated $1500 for the 2012-13 heating season. Additionally, this conversion raised the market value of a 2000 sq. ft. home by $22,000 in 2012 in the RE/MAX Leading Edge market areas.

The study found that buying tendencies in the Greater Boston area reflected concern about homes whose operating costs and utility expenses were higher than the norm. It also looked at “green” fields data recently added to the regional MLS.

Findings revealed that:

·         Green certified homes and condos sales became an emerging market in the state in 2012; 50 condos and 61 single-family green certified homes sold in Massachusetts, according to MLS PIN data, in 2012. In 2011, there were no sales of green condos and single-family listings statewide according to MLS PIN data.

·         Regional breakdowns within Massachusetts revealed “hotspots” of green certified building.

The study also indicated that the real estate industry has an opportunity to prepare itself for this emerging market, and that challenges within the real estate industry need to be addressed to better serve both buyers and sellers of high performance homes.

·         There is a lack of adequately educated industry professionals to serve high performance properties. Currently there are 0 green certified appraisers in Massachusetts (according to the Appraisal Institute) and only 0.5% of realtors nationally carry the National Association of Realtors (NAR) GREEN Certification, and that underwriters are not aware of the lower annual operating costs of these type of properties and the effect on their market value.

·         The regional Multiple Listing Service has opportunities to improve the “green fields” data they added in 2009-2010 and better educate real estate brokers and salespeople on their usage.

The real estate industry has a unique opportunity to help bring the benefits of high performance homes to consumers. For realtors and brokerages that invest in educating themselves on these initiatives, there is an opportunity for those brokerages to separate themselves from the competition as well as increase customer loyalty to their brand.

 “We feel that, as the market share of energy efficient homes increases in Massachusetts, the value of green buildings will rise, while the value of low performance homes will drop,” says study author Craig Foley. “The real estate industry has a great opportunity to serve its clients and communities better, and is uniquely positioned to bring the benefits of energy efficiency improvements to homeowners. I am pleased to be part of a RE/MAX Leading Edge team that is deeply committed to this emerging market.”

Eileen Hamblin, one of the four partners that make up the ownership group of RE/MAX Leading Edge says, “We pride ourselves on being at the cutting edge of our industry and we are excited to be leaders in this movement as well.”

“We are pleased to have professionals like Craig Foley in our in our company who can be valuable resources to homeowners, other agents and their buyers and sellers,” says partner Paul Mydelski.