In case you missed it, I wrote a story in yesterday’s DJC about how Intracorp Marketing & Sales had been hired by Bank of America to finish and sell the remaining 17 properties at Ashworth Cottages. Ashworth Cottages, Seattle’s first LEED platinum housing project, went into foreclosure in August.
Last May, I wrote a post about what went wrong at Ashworth here and it has been one of my most popular
Image courtesy Intracorp
posts ever since. Most commenters said the prime problem was houses were simply priced too high. Judging by how they’re being snapped up now, you were right.
When the homes came on the market, they were priced between $739,000 and $950,000. Today, they are priced between $399,000 and $649,000. Of the original 20 homes, 17 went into foreclosure. Since those 17 homes went on the market in a soft opening last week, eight of them have received purchase and sale agreements as of Wednesday, according to Jeff Smallwood of Intracorp.
In the article, I reference a few of your comments that said the price point was too high, even if they were LEED platinum. I wish I could have referenced more comments; they were so varied and insightful.
Today, Smallwood said the homes are probably selling at a little below market value and that the LEED features are mentioned by every buyer so far. But what does this say about green, expensive projects? While Ashworth is the prime example because it has had such a public story told, it’s not the only one. A number of super green expensive projects – haven’t sold. Or are being used for different purposes by the developer.
In my original Ashworth post, Anne Whitacre had a great comment that developers may expect green buyers to pay more because their utility bills will be lower over the life of a building. But if people don’t expect to stay in a building for years, then they can’t really take that value into account. This is why institutions, schools and nonprofits are often more likely than private developers to jump on the green bandwagon.
A few other commenters said they had been excited and interested in Ashworth but the price tag was just too much. How much of a premium would you pay for a super green house? Five percent? Ten percent? Nothing?
Similarly, if my price range is $950,000 I have a lot of options. I could buy a great, old house with a lot of character for $650,000 (especially in today’s market) and then spend $300,000 rehabbing it with super green features. For that much money, I could make a lot of green improvements that were functional and tailored to what I wanted AND I would be saving and improving an old structure, rather than sending whatever originally existed to the dump. Even if you recycle the majority of your construction waste, some of it still ends up being tossed.
A number of green builders believe that the market is ready to pay more for green projects and a number of studies support this to different variations. (There’s this study on local green certified homes, this study on national commercial buildings and this one on four local examples).
But in today’s economy, where is the line drawn? How much more are people willing to pay if they’re willing to pay more at all? And would this be a different situation in a better economy?
I’d love to hear your thoughts, your response to Ashworth’s situation and anything you know about other high priced green projects that haven’t sold or have been in a similar situation.