How Much Are Eco-Friendly Homes Worth to Home Builders?
Is It Profitable for Builders to Build Eco-Friendly Homes?
Homeowners around the country are showing an increasing preference for eco-friendly homes with a decidedly green twist.
As a builder, is it profitable for you to build these eco-friendly homes? And how can you make the process worth the investment? Keep reading to find out the answers to these questions, including exactly how to make your builds more environmentally friendly.
The Market for Eco-Friendly Homes is Growing
The U.S. Green Building Council has published some fascinating data, making a numbers-driven argument for green building. Here are some of their most interesting findings for the residential building sector:
- The market for houses with green certifications is 10%-14% more than for comparable homes without them.
- 73% of single-family builders and 68% of multifamily builders say consumers will pay more for green homes.
- A poll of over 2,000 Americans found that 49% consider eco-friendly features more important than luxury items in a home (31% cared more about luxury.)
- By 2016 the green single-family housing market could represent 26%-33% of the total market.
- The opportunity in green building could be anywhere from $80 billion to $101 billion based on current forecasts.
- 54% of builders who are doing new multifamily projects report that more than 50% of their projects are eco-friendly. By 2018, it’s expected to be at 79%.
There are Higher Costs Associated with Green Building
58% of builders and remodelers reported that green building costs them, on average, about 5% or more than traditional building.
It’s not just materials that lead to this increase, either. According to Donna Laquidara-Carr, industry insights research director for Dodge Data & Analytics, the cost can also be attributed to a labor shortage. She explains, “We really think that a lot of this is driven by concerns about labor costs and getting the right qualified people to do green projects.”
Before going full-in with green, builders should assess their cash flow and what additional costs they can weather. The investment will very likely pay off, but running the numbers is wise.
Despite Higher Costs the Business Benefits of Building Green are Clear
The skilled labor shortage is an issue the construction industry has been dealing with for some time now. However, builders who don’t explore eco-friendly building opportunities are likely to miss out on a large chunk of profit from the residential housing market.
Buyers want more eco-friendly options, and it’s worth it to learn more about this growing opportunity. For example, do you know about the sustainable building materials that you can use? In a time when environmental responsibility doesn’t have to mean diminished profits, it’s a business move that could pay off throughout your career.
Home Warranty Service Agreements and Structural Warranties can protect builders from unforeseen repairs and replacements, even in the eco-friendly, green homes that they build. Visit 2-10.com to find out more.