The housing collapse has been particularly brutal to home builders. It's hard to market new houses regardless of the latest features when similar resale property is selling for 20-40% less. The usual incentives, like kitchen or flooring upgrades, have very little impact when the price difference reaches, say, to $50,000, and often much higher than that. The gaps are especially wide in badly-mauled cities like Las Vegas and many areas in Arizona, California and Florida. Inviting mortgage rates are available to all buyers, so no help there either.
In order to generate more interest in their products residential real estate developers have been frantically searching for ideas that would give them a chance against the low-priced mortgage foreclosure and short sale properties littering neighborhoods across the land. Several have put their arms around the green home, a concept that was making some progress over the past decade but then was largely tripped by the housing meltdown.
KB Home is heavily using Energy Star features in its homes, including energy-efficient cooling, heating and ventilation equipment as well as appliances. Beazer has the eSmart Green program that also builds homes to Energy Star standards. As an option it offers the SolarLeaseTM program in Phoenix that comes with an integrated solar power system, bypassing the pricey upfront installation costs.
Meritage Homes takes all this to another level. The builder offers as standard an array of green magnets at its new subdivision in Gilbert, AZ. In addition to the regular ones like high-performance windows and spray foam insulation each home comes with a solar system and weather sensing irrigation. All this can save the homeowner up to 80% in utility bills, according to the builder. Meritage snapped up last year land for the project at a deflated price that allows it to throw in these features and still stay competitive with the existing real estate market.
It's too early to tell how in this trying real estate market of record-low mortgage interest rates and ample supply the resurrected eco product will fare. The home buyer remains largely in a holding pattern with great concern about the overall economy and therefore might be hard to convince to apply for a home loan to make a purchase. If anything, this nascent trend should give the green housing advocates something to cheer about.
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Provided by:
Esko Kiuru
Mortgage, real estate and apartment industry analyst
www.BluefoxToday.com - syndicated mortgage, housing and property management blog
eskokiuru@gmail.com
My cell: 702-499-1006
Esko green does seem to be the new buzz word in Real Estate. Hopefully it helps to bring new life into the housing market.
Esko, I like the trend. It is positive, offers something unique and hopefully will spark interest.
George,
Green homes could be the catalyst the real estate market has been looking for.
Kate,
Really, this could be the right time to give the concept a genuine push. I'm all for it.
I am simply amazed that builders do not use photo voltaic shingles in new construction here in the Las Vegas Valley these days. Cost is only slightly higher for install and the amount of $$ savings (let alone green savings) is phenomenal to the home buyer. We have the sun here why isn't the power harnessed?
Renee,
Agree. Vegas could be the Sun City, instead of Sin City, by harnessing all the free power beaming down on it.