Source: McGraw-Hill Construction, New York
A study released at the recent National Association of Home Builders International Builders’ Show finds green homes comprised 17 percent of the overall 2011 residential construction market, but are expected to jump to 29–38 percent of the market over the next five years. The projection equates to a five-fold increase by value, from $17 billion last year to $87-$114 billion in 2016, based on a five-year residential construction outlook.
According to McGraw-Hill Construction’s Green Home Builders and Remodelers study, many factors are driving the market spike, with “higher quality” and “increases in energy costs” topping the list and confirming how today’s green homebuyer is not just a green consumer. Buyers recognize that green homes have lower bills due to higher building performance. The reported costs of building a green home have also gone down significantly, from an 11 percent premium in 2006 to 7 percent last year.
“The housing market is critical to the U.S. economy,” says McGraw-Hill Construction V.P. of Industry Insights and Alliances Harvey Bernstein. “The results of our study show that despite the drastic downturn in housing starts since 2008, green has grown significantly as a share of activity— indicating the green market is becoming an important part of our overall economic landscape.”
Produced by McGraw-Hill Construction in conjunction with the NAHB and Waste Management, the study reveals a competitive marketing advantage: 46 percent of builders and remodelers find that “building green” makes it easier to market themselves in a down economy, and 71 percent of firms dedicated to green home building report the same.
“This study demonstrates phenomenal growth in green building and indicates that we can expect even larger increases in the coming years,” said NAHB Chairman and Gainesville, Fla., builder Barry Rutenberg. “In a sample of NAHB builder and remodeler members, nearly 90 percent reported building green at some level. This is a powerful testament to the importance of green home building—and transforms the way we think of homes overall.”
By 2016, many more builders anticipate that they will be dedicated to green building work on over 90 percent of projects; 33 percent expect to be dedicated to green work in 2016, up from 17 percent in 2011. Green-driven remodeling will grow even more dramatically, as 22 percent of remodelers anticipate they will be dedicated to such work in 2016, nearly triple the current level. Among survey respondents, 61 percent of builders and 66 percent of remodelers indicated homebuyers’ willingness to pay more for green projects.
While green is growing across the U.S., three regions are seeing higher than average growth. The West Coast has seen the highest green growth; the Midwest’s northern region, west of the Mississippi, is second highest; and New England ranks third. McGraw-Hill Construction will continue analyzing the results of the Green Home Builders and Remodelers Study and release a printed report in April during the NAHB’s National Green Building Conference and Expo in Nashville. Additional information in the interim can be obtained by visiting http://bit.ly/wsF2gJ.