ShareThisNew Certified Homes Command 18% Premium
While fewer new homes were built in the past year in the Portland metropolitan area than in the previous year, the market share of third party certified homes increased. Twenty three percent (23%) of all newly constructed homes in the Portland metropolitan area sold between May 1, 2009 and April 30, 2010 received a third party certification. This finding is based upon data reported by the Portland area RMLS to Earth Advantage Institute.
The term “certified home” refers to homes that received an Earth Advantage, Energy Star, or LEED for Homes designation, or a combined Earth Advantage/Energy Star designation. Certification and sales information is reported by participating real estate brokers to RMLS. The Portland metropolitan area region includes Multnomah, Clackamas, Columbia, Washington and Yamhill Counties in Oregon and Clark County in Washington.
This finding continues a three year trend in which the market share of certified homes in the Portland region has increased. Please see Table One below for detail.
| Number of certified new homes sold | Market share among all new homes | Price premium | |
|---|---|---|---|
| May 1, 2007 to April 30, 2008 | 833 | 14% | 21% |
| May 1, 2008 to April 30, 2009 | 674 | 17% | 12% |
| May 1, 2009 to April 30, 2010 | 403 | 23% | 18% |
Data provided by RMLS and compiled by EAI. Percentages rounded to nearest whole number.
Homes with a third party certification sold for more than their non-certified counterparts, both in the new home and existing home markets. New homes in the six county Portland region sold for 18% more, while existing homes with a certification sold for 23% more.
| New homes | 18% |
| Existing homes | 23% |
Data provided by RMLS and compiled by EAI. Percentages rounded to nearest whole number.
"As energy efficiency and healthier homes gain more attention, builders and homeowners increasingly place value on home certification," said Sean Penrith, executive director, Earth Advantage Institute. "It is very encouraging to see the market share of certified homes continue to rise over the past three years despite the difficulties in residential markets."
RMLS reports sales data by county. Table Three below provides more detailed information on the range of price premiums observed in different parts of the Portland metropolitan area. Clark County, WA was the one area in the metropolitan region where newly constructed certified homes did not sell for more. However, certified existing homes in Clark County continued the trend. As a group, existing homes with a sustainable certification in Clark County sold for an average of $278,400 versus $234,100 for homes without such a certification, or 16% more.
| New Homes | Clackamas | Multnomah | Washington | Yamhill | Clark County WA |
|---|---|---|---|---|---|
| Non certified | $326,300 | $266,000 | $315,100 | $271,100 | $264,500 |
| Certified home | $391,500 | $310,100 | $332,300 | $325,100 | $252,600 |
| Price premium | 17% | 14% | 5% | 17% | -5% |
| Existing Homes | |||||
| Non certified | $328,000 | $282,400 | $274,000 | $221,800 | $234,100 |
| Certified home | $365,000 | $416,800 | $388,300 | $308,000 | $278,400 |
| Price premium | 10% | 32% | 29% | 28% | 16% |
The Portland area RMLS first began collecting information about home certification in the spring of 2007. It is the first RMLS in the country to do so.
About the Author
Thanks for the article—it’s definitely valuable to publicize demonstrated benefits of energy efficiency certification.
One question, though: Certified new homes’ average price premium (2009-2010) is listed as 18%, but each of the five counties’ individual premiums are under 18% (ranging from -5% to 17%). How could that 18% have come about? Is the time frame different, or am I missing something else?
Thank you!