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January 19, 2010
A new report from GreenWorks Realty and Development Group looks at how homes with green certifications have been selling, compared to non-certified homes. The report looks at new homes in the Puget Sound area that were sold between September of 2007 and November of 2009.
GreenWorks looked at data from the Northwest Multiple Listing Service, which did not track green design criteria before 2007. The homes include those certified under the Built Green, Energy Star or LEED for Homes programs.
The report found good news for certified homes in Seattle and King County, but mixed news in other counties. In Seattle, the report says, certified homes sold for 8.5 percent more per square foot in 22 percent less time, compared to non-certified homes. In King County, certified homes sold for $72 more per square foot in 7 percent less time.
Certified homes made up 33 percent of the Seattle market while they represented 25 percent of the market in King County.
Ben Kaufman, owner and broker of GreenWorks, said green homes in King County are smaller and of a higher quality than their competition, with better finishes and more efficient systems. People, he said, are spending about $22,000 more on “pretty dramatically smaller homes.”
Green homes were almost 600 square feet smaller than non-certified homes.
“That's huge,” he said. “The shift is basically towards higher quality residences. It's quality over quantity.”
In King County, the number of certified homes rose last fall. The report says for the last quarter of 2009 certified homes represented 34 percent of the new home market and sold for $87,000 more per home. They were also 9 percent smaller in size.
Over the time period, 1,943 new, non-certified homes sold in Seattle compared to 973 certified homes. The report says the certified homes spent 38 median days on the market while non-certified home spent 49 median days on the market. In Seattle, 129 homes that were third party verified as being four- or five-star Built Green sold for $319 per square foot, compared to $256 per square foot for the 1,943 non-certified homes. They spent 45 median days on the market compared to 49 median days on the market.
But in Snohomish and Pierce counties, homes that were certified sold for less money per square foot than those without certifications and spent more time on the market. In Snohomish County, 578 green-certified homes sold for $164 per square foot and spent 97 days on the market, compared to 3,430 non-certified homes that sold for $169 per square foot and spent 70 days on the market.
Homes in Thurston and Kitsap counties sold for more per square foot but spent more time on the market.
Kaufman said this is largely a problem of education. King County has a history of teaching buyers and agents about green, but Kaufman said he is unsure whether that is happening in other parts of the region.
Kaufman also said he suspects builders in other areas may build green-certified homes that are the same size as non-certified homes and expect to sell them for much more. That doesn't work, he said, because green buyers are looking for smaller spaces with a higher level of quality.
In Snohomish County, certified homes were about 3 percent smaller than non-certified homes. But in Pierce County, certified homes were 13 percent larger than those that were not certified.
In Seattle, Kaufman said last July certified homes made up almost half of the new home marketplace. If that trend continues, he expects builders who don't build green will “risk becoming the dinosaur.”
For more information, go to www.greenworksrealty.com.
Katie Zemtseff can be reached by email or by phone at (206) 622-8272.