Real Estate Tip – Green Building Market Expected to Grow to $83B by 2016
In the last two years a significant number of studies and reports have shown that the trend toward green construction is unmistakable. On the commercial side, more than 60% of firms worldwide report that they are planning new green construction projects in the next three years. On the residential side more than 30% of builders say two-thirds of their work is in green construction and 20% of those builders report that 100% of their work is in green construction.
Green housing costs 5% to 10% more than conventional housing but the majority of builders and an even larger percentage of remodelers say their customers are willing to pay that price differential. One McGraw-Hill published study asserts that between 2013 and 2016 green housing will grow from a $36 billion market to an $83 billion market.
Why the growth? It is no longer “doing the right thing” as reported by most commercial firms in 2008, but it has now become embedded in all building and planning discussions. The reasons are:
- Buyer and tenant expectations
- Lower operating costs
- Indoor air quality and occupant health
- Energy use / carbon footprint reduction
- More green in local codes
- Easier availability and lower cost of green products and components
- More well-educated consumers
- Increasing or volatile cost of electricity and heating fuels
These trends hold a lesson for local brokers, bankers, buyers, builders, tenants and developers: speaking and thinking at least one technically informed shade of green must become second nature. If you are not there yet, be certain your next project, lease, loan or acquisition team includes someone with green building skills. Seek legal counsel for any of these areas or when looking to find green building alternatives to LEED certification.
Today’s real estate tip is brought to you by Rick Smith, a LEED Accredited Professional and member of Bernstein Shur’s Real Estate Practice Group and Green Building Team. Stay tuned for more useful tips for real estate professionals.
For more information, contact Rick at firstname.lastname@example.org or 603 623-8700 ext. 8829 or 207 774-1200.