Going for Green—Sellers Can See Upside in Sustainable Home Features

For many luxury buyers, it has long seemed theoretically nice to have a home that is built with sustainability in mind, but also has a tough, crispy aesthetic and the added cost of installing eco-friendly technology.

Between the rapid rise of electric cars as a status symbol; a growing number of developers making green, tall design buildings; and a broader wellbeing concern that emerged from the Covid-19 pandemic, the tide is quietly turning in favor of green homes and buildings.

For sellers and developers, adding green features can help a listing stand out from the competition and potentially accelerate sales. But it’s best to be strategic.

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“We’re just scratching the surface, and that’s going to be the norm for the years to come,” said David Parnes, principal at The Agency in Los Angeles. “Houses that use [sustainable features] At the moment, these are the exceptions and are therefore a great marketing tool and platform. “

In the Palm Beach, Florida area, “The demand for items that are either certified as environmentally friendly or have chargers for electric cars has grown dramatically recently,” said Cameron Sydenham, a Florida-based representative for Corcoran. “Nobody asked until a few years ago.”

The trend has emerged so quickly that some developers have been trying to catch up while a project is still under construction.

“I’m working on an apartment complex in Delray Beach, and while we were under construction, some buyers asked for one [electric] Car charger, ”said Sydenham. “During the construction of the project, the developer changed their plans and went into town and added six car charging points connected to the units we were selling.”

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Mr Sydenham added, “Buyers wouldn’t buy if we didn’t have it.”

The importance of luxury homes that support electric vehicles will only grow if well-known automakers outside of Tesla, from Bentley and Porsche to Jaguar Land Rover, have doubled electrification.

According to Redfin, views of property ads that fall under the “Energy Efficient” category rose 9.9% over the past year, while the number of ads that include such features fell 13.6%, which is based on indicates a moment of opportunity for sellers and builders looking to stay ahead of growing demand.

“I think that as this next generation of millennials move from tenants to buyers, developers will respond more quickly to their needs, be it on the roof or in vertical indoor farms or in car charging stations,” said Stephen Kliegerman, president of Brown Harris Stevens Development Marketing.

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Sustainability is captured by wellness trends

Since the beginning of the pandemic in early 2020, luxury buyers have suddenly placed importance on building features such as air filtration and UV lighting, health-promoting amenities that were previously not at the top of the wish lists of many home hunters.

“Covid really raised awareness,” said Mr Kliegerman. “Buyers ask about air filtration, water filtration, and touch points.”

In some ways, this newfound focus on health has also sharpened the profile of eco-friendly amenities, with sustainability, health and cleanliness being tied into a broader sense of general “wellbeing”.

“Chargers for electric cars, infrared technology, solar panels, we will see that in a few years as expected,” said Parnes. “It’s all about wellness, and I think Covid emphasized a lot. [Sustainability] is almost like a health brand or a seal of approval from a health point of view. “

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Some new luxury buildings going online are relying on the combination of health and sustainability benefits as a selling point and are seeing significant interest as a result.

The Charlotte, a new luxury apartment building on New York City’s Upper West Side that is expected to be sold later this year, was built to passive house standards (which require very low energy consumption in buildings) and has airtight insulation, both of which reduces noise and energy consumption and supports a high-tech air filter system with which residents can increase the supply of fresh air to an apartment via an app on their mobile phones.

“[Prices] Start at over $ 10 million for four bedroom apartments and people won’t be put off, ”said Compass agent Alexa Lambert, one of the agents marketing the building. “We have so many people advocating getting in. People will be very happy to pay for it.”

The drive for more eco-friendly features could soon extend to smaller, more trending apartment amenities as well.

“The device of the decade was the wine cooler. But how many people really need it or do it take care of expensive wine bottles? “Mr. Kliegerman said. “You make indoor farms that are the same size and configuration as a wine cooler, and you could grow your own produce instead of keeping the wine at 45 degrees. I think this is what you will see in buildings next. “

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Electric car chargers will no longer be negotiable

Between Tesla’s increasing ubiquity as a luxury item and General Motors’ recent commitment to phasing out gas-powered cars by 2035, electric cars persist and savvy sellers and developers are working to meet demand.

“When I meet with a contractor, I tell them 100% that they need something [electric car charging] in there, ”said Mr. Sydenham. “There is a lot more momentum than people think and I would bet there will be a massive surge in electric car owners by the end of 2021 that isn’t even on the radar.”

And unlike solar panels or full passive house design, charging stations are a relatively simple amenity for individual homeowners that can be added during the renovation process or before a sale.

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“It’s very sensible, it’s not expensive,” said Francisco J. Fuertes, a Miami-based agent at Brown Harris Stevens who is also a general contractor on high-end construction projects in the area. “If you rebuild enough that you can run the new one [electrical] Line where you want it sure is something i recommend. “(Realtor.com previously estimated the cost of installing a charging station to be anywhere from hundreds of dollars to about $ 2,000.)

“Most of our buyers now ask about electric chargers when a building has parking,” said Kliegerman. “It will undoubtedly become more popular.”

Solar is slower to catch but offers tempting savings

From the point of view of the immediate cost-benefit ratio, solar modules are more complicated (and expensive) and have yet to achieve widespread popularity.

“When it comes to solar panels, this is a very specific buyer – they drove the electric car like this before it became popular,” said Lytel Young of Corcoran Global Living in Los Angeles. “If a seller has more efficient solar panels or something like that, I’ll definitely highlight that. Only when a buyer realizes that these features are present on a property does he become interested. “

High upfront installation costs can also hold back buyers, but are easier to justify in markets like New York City, where energy bills can add up to significant monthly costs, and tax credits are now encouraging the installation of energy efficient technology.

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“I have a lot of customers who say, ‘I’m going to sell what should I do to get my house ready in a few years’ time’ and I tell them to put a solar panel on their roof,” said Leigh Wallce. an agent at Brown Harris Stevens in New York City. “It’ll help you get a tax credit now, and it’s one more thing that will make your home more salable.”

For a New York City townhouse, installing solar panels can cost anywhere from $ 35,000 to $ 45,000, depending on the size of the system, said Steve Nelson, director of sales at Brooklyn Solar Works. Energy cost savings can range from $ 1,500 to $ 2,000 per year.

Between tax breaks and energy savings, Nelson said, “The payback period for many of these systems is typically eight years. Selling beforehand could amortize that investment [in the sale price]and the new buyer would take the first step with a reduced electricity bill. “

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A 2019 Zillow study found that homes with solar panels in the US sold for an average premium of 4.1% over similar properties, a number that rose to 5.4% in the New York market.

“Reselling is becoming more and more of a conversation we have,” said Nelson. “There is a small advantage for a house that has a fully functional solar system on the roof from day one. If a buyer is considering two similar $ 4 million worth of brownstones, the one with a lower cost of ownership will be more compelling. “

1007 Bergen, an upcoming development in Brooklyn, is being designed with solar panels and a green roof, and Ms. Wallace said, “People are very excited to be buying something that is plug and play instead of having to spend the money. “

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For luxury home buyers, eco-conscious purchases still need to be high in design and state-of-the-art finishes to turn their heads and, ideally, also save money on their monthly energy bills.

“People won’t want to live in an ugly apartment with a hideous bathroom made of raw wood, but if they can live in a beautiful apartment and also say, ‘We are good people, we live in this completely sustainable building. “It gives you a boast in your ward,” said Ms. Lambert.

“If anything, buyers are willing to pay a premium to be greener,” added Sydenham. “It’s a status symbol for them.”

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