February 28, 2008 4:14 PM
Energy efficient homes top buyers' wish list
Lance Jackson & Associates gave the 574 potential home buyers along the Front Range 11 different choices as their "essential" choices for their next home purchase.
"A whopping 63 percent chose low- to zero-energy," homes, according to the broad-based survey.
"It was a big surprise," Kent Jackson, principal of the research firm, who holds a PhD in psychology, said.
The report notes: "The growing awareness of environmental and energy consumption issues is driving a dramatic rise in interest among home buyers – expressed both in terms of energy conservation measures and homes built to higher overall performance standards. While initial purchase price and finance-ability still trump most deals, buyers are increasingly tuning in to these issues – perhaps at a rate faster than the industry anticipated."
The catch is the largest percentage of the buyers – 27 percent – are looking to buy homes in the $200,000 to $250,000 range.
That is the "sweet spot" for most buyers, according to the survey. Only 3 percent of the people surveyed plan to buy homes priced at $700,000 or more.
"This is something we want to track very carefully," Jackson told me. "On our next go –around (for a follow-up survey) we want questions relating how much more you would be willing to buy, and how much you would be willing to have your initial payments go up," for the green features.
"That is the challenge," Jackson told me. "The challenge has to do with costs and the payback expressed over time – the cost benefit. Zero-energy consumption homes cost incrementally more…who can afford that over the life-cycle of the house."
Jackson said that he suspects more people want a green home to save money on heating and cooling bills, rather than "the social value or for environmental reasons."
I asked Aaron Nelson, of the Denver-based Alliance for Sustainable Colorado, what he thought.
"My initial reaction, based on my commercial experience, is that "Yes, if you can get the land for free," you can build zero-energy homes for less than $250,000, Nelson said.
For example, in Norman, Okl., where land is cheap, a builder is building Zero-Energy homes in that price range, he said.
"The majority of the Net Zero homes I have seen are already $1 million homes to begin with, in size and features, such as granite counterops," Nelson said.
"The survey presents an interesting dichotomy," Nelson said. "It brings into question land values compared with actual construction costs."
Eric Doub, of Eco Futures Building in Boulder, agreed that the price of land is a huge factor.
"I'm driving by a neighborhood in Boulder right now, where any piece of land, a 50 by 100 lot, will cost you a minimum of about $500,000, no matter what is on it," Doub said. "It doesn't matter if the home was built in the 1940s or is a junker."
That said, there is no doubt that many builders can do much more as far as making homes more energy efficient and sustainable, with little increase in cost, he said.
Some studies have shown by spending another 2 percent to 3 percent on construction, can cut energy costs by 30 percent to 50 percent.
"You need to look at what is cost neutral," Doub said. "Ask yourself what I can get by spending $1,000 here or $2,000, or $3,000 more here."
Many people, when they think of energy efficient homes, immediately think of sexy features such as photovoltaic cells.
But Doub said a builder can do things such as put in a drain plug, which essentially costs nothing, to keep heat from escaping from a house.
I told him about one builder who lost a home the sale of a townhome in Denver because it wasn't energy efficient enough. The builder said it would have cost him another $70,000 to make it a green home, and he didn't think the market would support the price increase.
"Any builder who thinks you need to spend another $70,000 is operating on some very solid misinformation," Doub told me. "The first thing you have to think about is that drain plug analogy. You need better ducts, better furnaces, better water systems."\
And it doesn't need to cost that much.
Still the Lance Jackson survey is encouraging, he said, even if the respondents are unrealistic, given the cost of land, he said.
Doub said that builders will finally change the way they construct homes, when consumers demand that they only build energy efficient, sustainable homes.a
"It's all going to be market driven," Doub said.
He said when builders see that energy efficient homes are selling the fastest in a tough market like today's, then things will quickly change, he said.
And with the confluence of concerns of global warming, and consumers being hit by record heating and cooling bills, the time to change is now, he says.
The Lance Jackson report also noted that 71 percent of the respondents would consider a smaller home that was built to be environmentally friendly.
So building smaller, energy efficient homes may be the ticket to keeping home prices down, as well as utility bills.
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