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Real Estate Blog & Resources

Green Construction Expected to Stay on the Rise

A continued trend in the housing market is the prevalence of homebuilders utilizing green home construction, and many industry watchers do not expect this trend to end anytime soon. According to a McGraw Hill Construction study, Green Multifamily and Single Family Homes: Growth in a Recovering Market, 62 percent of single-family builders and 54 percent of multifamily developers constructed 15 percent of their buildings by green standards in 2014. In addition, 19 percent of single-family builders constructed a whopping 90 percent of homes to green standards. For a building to qualify as green, the construction and final structure must meet a series of rigid requirements outlined by green building standards.


Many homebuilders and homeowners are installing green technology in their homes to save on utility costs.

Homebuilders are taking notice of these real estate development numbers, as they are only expected to continue increasing. According to the survey, 79 percent of homebuilders plan to construct 15 percent of their homes by green standards by 2018. A majority of developers are also incorporating renewable energy sources into their projects, with 65 percent of respondents using these on at least some construction. While only 8 percent of developers currently use renewable sources in all of their projects, that number is expected to grow to 20 percent by 2016. The report also forecasted that green single-family dwellings should represent 26 to 33 percent of the housing market by 2016, representing $80 to $101 billion worth of real estate development.

Driving Factors
There are different reasons driving homebuilding to go the green route. Due to improvements in energy efficiencies, many more developers are able to include these features in their construction projects, as 75 percent of single-family and 84 percent of multifamily builders cited this as a factor when deciding to go green.

In addition, like any company bringing a product to the market, developers want to give customers what they want. According to a study by the National Association of Home Buyers, the feature homebuyers want the most is energy efficiency, which is a staple of green construction. Ninety-four percent of individuals looking to purchase a new home cited energy-star rated appliances as either desirable or essential. This includes 91 percent who want the energy-star rating for the entire house. Energy efficiency involves features such as indoor environment control, water conservation and material management, which contribute to consumers going the green route.

In addition to energy-star rated appliances and features, a different McGraw Hill survey discovered that more people are installing green technology as well. According to the data, 12 percent of single-family builders incorporated solar photovoltaic panels in the home, while roughly 26 percent of builders are installing geothermal pumps that act as a warming source in the winter and a heat sink in the summer.

Cost considerations
While many like to think building green homes is a fad, the truth of the matter is that green home construction includes increased savings for homeowners too. As natural gas prices and electricity costs continue to climb, builders and homeowners are implementing ways to lower these expenses without sacrificing the luxury of the home. These features provide long-term savings for the entire time a family lives in the house. Better energy efficiency means lower utility costs, while environmental control gives homeowners more ability to keep the house at a reasonable temperature without hurting their wallet. Using energy-star rated appliances and windows, in combination with alternative energy sources like photovoltaic and geothermal heat swaps, builders and buyers can agree on lower costs.


Many contractors are incorporating green building techniques when constructing new homes.