The REsource Newsletter

August 2018

In This Issue


EverGreen Award: Fighting the Uphill Battle
Boston Buyers Say Yes to High Performance, And Pay Extra For It.
Knowledge Refresh: Smart Home Technology 
Tips: Late Sumer, Early Fall Gardening

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EverGreen Award: Fighting the Uphill Battle


 

One thing this year’s EverGreen winners have in common is a stubborn commitment to bringing green housing to their communities. 

They did it even when the market said, “We’re not interested. We don’t believe in it. It’s not a priority.” 

Spreading the green virus 
Danielle Bowden, a practitioner with RE/Max Solutions, Merritt Island, Fla., made the case for and spearheaded the greening her local MLS.
 
She also started calling local appraisers to discuss the MLS changes and explain how important it was for them learn about green appraisals through the Appraisal Institute.

In addition, she asked her local association to create a committee to advance green education. Bowden ended up chairing the Green Committee for Space Coast Association of REALTORS®. 

That committee has been spreading awareness about sustainable topics by organizing tours of the Florida Solar Energy Center, hosting a seminar about seawalls at the Florida Institute of Technology, and providing education on things like PACE and sustainable cities. 

This year, the association will offer a live presentation of the Green Day 1 course. 

“I plan to spread green living like a virus,” says Bowden. 

Establishing a green presence 
Shortly after getting his real estate license in 2015, Johnny Corrales, a practitioner with Keller Williams Success Realty, South Ogden, Utah, got his NAR Green Designation. 

At the time, he was one of fewer than 25 real estate practitioners in the state who had the designation. 

He viewed sustainable and affordable housing as the future of the real estate industry and was determined to convince others of this belief.

He set out to connect with builders to let them know there was someone in the market who cared about the design and efficiency of homes.

Corrales also started discussing the importance of sustainable homebuilding with fellow practitioners in his office and encouraged them to get NAR’s Green designation too. 

He’s also been building his green skills and connections by volunteering at and sponsoring events like the Utah Clean Air Fair, Green Drinks, and the Intermountain Sustainability Summit.
 
Education needed, education delivered
Back in 2016, there wasn’t great enthusiasm for green when the New Hampshire Association of REALTORS® polled its members. 

But the association was undeterred and moved forward to bring green training to its members. 

In early 2017, it held the New England Green Homes Symposium, a one-day educational event that brought together real estate agents, appraisers, builders, solar PV providers, and homeowners for a full day of education sessions. 

Right after the symposium, the association attracted 60 students for two days of NAR’s Green Designation training that was conducted by Craig Foley. Foley did another round of education that fall, and 40 more New Hampshire practitioners became NAR Green Designees. 

The New Hampshire Association of REALTORS® formed its first sustainability committee late in 2017. 

The success and speed with which the green effort got off the ground was driven by the association’s commitment to green and to effective leadership and marketing. 

Keep an eye out for complete profiles of the EverGreen winners in upcoming issues of the newsletter. And plan to celebrate the winners at a reception during the 2018 REALTORS® Conference & Expo that’s taking place at the Boston Convention & Exhibition Center in Boston, Mass., November 2-5.

 

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“Know the science, sell the benefits.” 



 

                                           --Craig Foley, Associate Broker, REALTOR®, GREEN, LEED Green Associate, Chief of Energy Solutions, Leading Edge Real Estate, Cambridge, Mass          

                                                                                 

Boston Buyers Say Yes to High Performance. And Pay Extra For It.

 Image credited to R.E. Media Services Inc.
 

Boston.
 
The city gets slammed by nor'easters. Winters are snowy and cold. They’re long.  
 
That all makes garages a prized amenity. 
 
Yet some homebuyers are willing to surrender that coveted space for an ultra-high-performance property. 
 
That’s what Craig Foley, Associate Broker, REALTOR®, GREEN, LEED Green Associate Chief of Energy Solutions, Leading Edge Real Estate, Cambridge, Mass., discovered when he analyzed two comparable high-performance Boston properties that sold in 2017. 
 
Rigorous standards 
 
One, the E+ Solutions Highland St. project, was a four-unit LEED platinum-certified zero energy property that incorporated cutting-edge building science. 
 
Its features, including double-insulated walls and advanced mechanics for heating, cooling, and hot water, put the condos at the leading edge of sustainable, high-performance home technology. 
 
The property had off-the-charts HERS scores, ranging from -14 to -22, and buyers also had the option of buying a proportional interest in the solar photovoltaic system located on the rooftops of the two buildings. 
 
Just one-quarter mile away was the Marcella St. project. The seven-unit condo development was built to the Massachusetts Stretch Code – the most rigorous building code in the country – and had achieved a HERS score of 55. 
 
It offered garages for each unit. The E+ Solutions Highland Street project didn’t. 
 
Paired analysis 
Foley had questions. 
 
Would a high-performance project built significantly above code like the E+ Solutions project be able to command a price premium over the Marcella project? 
 
Would buyers, agents, bank appraisers, and underwriters recognize the value of a high-performance development over a built-to-code project in the same neighborhood? 
 
To find out, he conducted a paired sales analysis, an appraisal technique that entails comparing two sales in which the only difference is the attribute being appraised. The difference in value is the value of the attribute in question. 
 
The 22.7% premium
Foley’s analysis showed a significant price premium for the E+ Solutions homes.  
 
Buyers not only were willing to pay more, but they’d even forego that highly desirable garage for the E+ Solutions property. 
 
The average of the two sales prices for the E+ Solutions homes showed a 22.7% price per square foot premium over the average for the Marcella St. project. 
 
See a side-by-side comparison of the two properties, and visit Embue for the E+ Solutions Highland Street’s daily whole-building performance data. 
 
Explicit, effective marketing 
But no building sells itself. 
 
Thus, another critical differentiator between the two projects was marketing. 
 
Though both properties had high-performance attributes, the description of the E+ Solutions homes immediately conveyed their value to buyers, agents, and lenders. 
 
For instance, Foley explained precisely what the features would mean to prospective buyers – more comfort, significantly lower operating costs, better indoor air quality, and a lower environmental footprint. 
 
Foley also attributes some of the project’s success to a skilled team. “This requires a marketing and valuation strategy by an agent that is knowledgeable and competent about high-performance homes, and a qualified appraiser armed with complete and accurate information about the project,” he says.
 
Bigger meaning?
And what’s the broader relevance of Foley’s findings? 
 
For one, it’s more evidence, along with a host of other studies (see: The Value of Green Labels in the California Housing Market, Green Homes Sales Prices in Northern California, and Appraisers Analysis of Pearl National Home Certification Sales Premium), that a high-performance home that’s marketed properly can command a price premium.  
 
It also may be another indication that change is in the air. Consumers are recognizing that high-performance properties are better than others and worth the investment. 
 
“We are in the midst of a high-performance buildings revolution,” says Foley. “You just don't know it yet.”
 
Capitalizing on opportunity
Here four ways to build a high-performance home niche for your business.  
 
1. Build roots, expertise. Become an expert on high-performance properties. It takes time, and that deep knowledge can’t be gained in a two-hour ed session. Finding the skills does begin with the Green Designation program and includes revisiting the concepts you learned when you became a NAR Green Designee. Build your expertise by tapping your GRC benefits, including Webinars and by participating in NAR's Green Designation Networking Community.
 
One way Foley developed his know-how was by participating in groups like the American Institute of Architects, USGBC, Northeast Sustainability Energy Association, and Passive House. “Getting deeply involved with the green building community several years ago was best thing I ever did,” he recalls. “A lot was advocacy work early on – with no ROI initially – that has really paid off.” 
 
2. Finding your team. Getting a high-performance project off the ground is a isn’t a solo act. So, building roots in the green community also may lead to a key role on a team when such projects do get underway. Foley talks about a new project he’s working on and says, “It’s a LEED-integrated design process on steroids. I’m one of four core team members with a developer, architect, and general contractor. Each of us has been a part of every design-build decision from the project’s inception.” 
 
3. Informative showings. “It’s kind of old-school, but all these properties need accompanied showings by the listing broker,” says Foley. It’s important to have someone with the knowledge and competence to highlight the high-performance features and explain the value of such properties.
 
4. Smart marketing. Marketing materials need to clearly identify the green features’ benefits and how they translate into things, like comfort and savings, that buyers relate to.  “Know the science, sell the benefits,” says Foley. 
 
Want to know more? Join the Boston High-Performance Homes Tour on Thursday, November 1, 2018 to see the E+ Solutions Highland St. project and other energy efficient properties. The special event is being held in conjunction with the REALTORS® Conference & Expo in Boston, but space is extremely limited and filling fast. Full details here!  
 
 

Knowledge Refresh: Smart Home Technology

For clients who are reluctant to dive fully into energy efficiency upgrades, an intermediate step may be to show them how to incorporate some smart home technology. 
 
After all, people can relate to it better than invisible things like insulation, there’s a security and safety component that’s appealing, and many devices are affordable. 
 
Plus, there’s a cool factor associated with smart devices.  
 
Home automation goes mainstream
For you, it’s a smart business move to stay up to date on smart technology. 
 
After all, the number of connected homes in the U.S. market has seen a compound annual growth rate of 31 percent, growing from 17 million in 2015 to 29 million in 2017, according to McKinsey.
 
In addition, retailers like Lowes and Best Buy now are selling smart home products in stores and showing homeowners how the devices bring security, convenience, and energy efficiency.  
 
All that means that consumers may come to you with an understanding of home automation. They also may expect you to know more than they do.
 
If you need a refresher on smart home technologies, refer to your Green Day 1 course materials. 
Here’s a recap of what you’ll find. 
 
Simplicity and IoT
 
Thanks to things like downloadable apps, embedded sensors, and Wi-Fi Internet connectivity, smart home technology is available and usable for non-techies. 
 
In a smart home, the Internet of Things (IoT) connects the home’s appliances, systems, and devices, and lets homeowners monitor and control all of them through a computer or smartphone. 
 
Here’s some of what a smart home can do.
 
Monitor home operations, safety, and security 24/7, and alert homeowners to security issues and safety problems like a build-up of carbon monoxide. 
 
Integrate home systems such as security and alarms, secure the home with digital locks and motion sensors, and provide webcam surveillance. 
 
Control home systems like lighting, temperature settings, and door locks and let homeowners manage a home remotely. 
 
Compile data on home operations and resource usage.  The data is important for homeowners who are generating their own power and selling it back to the grid. By tracking electricity usage by appliance, homeowners can identify energy hogs and replace inefficient equipment or modify their behavior to reduce energy consumption. 
 
Schedule appliances to run at specified times to take advantage of utility companies’ off-peak discounts. 
 
Learn usage patterns such as thermostat settings for waking and sleeping hours and report anomalies like a thermostat that’s set too high. 
 
Green connection
For green-minded homeowners who want to create an energy efficient home, smart technology isn’t a replacement for improved insulation, new windows, or good habits. 
 
But it does help them monitor and modify their energy usage, and it possibly can motivate some to find more ways to achieve greater efficiency and savings. 
 
For you, consumers’ interest in smart technology can be a gateway to a broader discussion about the strategies and upgrades that will help them reach their goals. 
 
Resources: 
CRT Labs 
Smarthome 
 

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This Month's Tips: Late Summer, Early Fall Gardening

 
The Chicago Botanic Garden shows you how to squeeze the most from your vegetable garden before gardening season winds down.  
 
1. Round two. During the first week of August, you can plant snap beans, broccoli, cabbages, cauliflower, carrots, mustard greens, spinach, and radishes for a fall harvest. You also can plant lettuces, mesclun mixes, and other greens. 
 
2. Pick. Keep vegetables picked, so plants will keep producing.
 
3. Harvest. Don’t let your squash and zucchini get super-sized. They’ll be novelties but have little flavor.

 

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NAR Green Stats

Here’s what the National Association of Realtors®' REALTORS® and Sustainability 2018 report found about green lending and market time for certified green homes. 

 

 

 

 

All articles written by Elyse Umlauf-Garneau unless otherwise noted

 

 

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