Green Growth Continues in Improving Economy

2014-02-15T11:45:00Z Green Growth Continues in Improving EconomyMichelle Krueger Times Correspondent
February 15, 2014 11:45 am  • 

Pointing to the fact that green builders remained in business at higher proportions than other builders, results of a Green Home Builders and Remodelers Study by McGraw Hill Construction were shared during the National Association of Home Builders (NAHB) annual conference earlier this month.

“Green experience was a significant part of what kept builders in business during the recession,” Harvey M. Bernstein, VP of Industry Insights and Alliances for McGraw Hill Construction, said. “Now, those same firms are embracing the competitive advantage they earned by deepening their delivery of energy-efficient and green homes. We also see firms reentering the market that are using traditional home building practices versus green practices because that's what they know. However, the broader availability of green building products and practices, a more educated consumer and an increase in activity at the regulatory level will also encourage this group of builders to learn green practices over time."

With green homes making up 23 percent of the overall residential construction market in 2013, they are expected to grow to between 26 percent and one-third of the market by 2016. This equates to a doubling in the value of green home construction over three years, growing from $36 billion in 2013 to $83-$105 billion in 2016, based on the current McGraw Hill Construction forecast for total residential construction.

The publisher explained that green growth is occurring as the economy improves because communities have incorporated green principles into building codes, ordinances and regulations. There is also improving quality as well as wider availability and affordability of green products. At the same time, more educated consumers and rising energy costs are providing green construction a growing competitive advantage.

With the recession apparently hitting builders experienced in green construction with less severity than other homebuilders, the study also found that:

• 51 percent of builders and remodelers find that it is easier to market green homes, up from 46 percent in 2012 and 40 percent in 2008.

• 68 percent of builders (up from 61 percent in 2011) report their customers will pay more for green, with 23 percent reporting that their customer will pay more than 5 percent.

• 84 percent of remodelers report the same (up from 66 percent in 2011), with 55 percent reporting their customers will pay more than 5 percent for green features.

In 2013, 16 percent of builders were dedicated to green building with more than 90 percent of their projects green, and another 20 percent were highly invested in green activity with 61 to 90 percent of their projects green. By 2015, that is expected to increase, with 20 percent of builders expecting to be exclusively working on green buildings, and 24 percent doing 61 to 90 percent green work. Remodelers are also increasing their attention to green work, with 16 percent reporting more than 60 percent of their projects are green today, expected to grow to 23 percent doing this amount of green remodeling in 2015 and 32 percent by 2018.

“This study shows that more and more builders are incorporating environmentally sensitive and energy and resource efficient techniques into traditional home building practices, and we expect to see even stronger growth in the coming years,” Matt Belcher, Co-Chair of NAHB's Energy & Green Building Subcommittee, said. “Green building expertise provided builders and remodelers with a competitive advantage during the housing downturn, and now as the market continues to recover, NAHB members stand ready to meet the increased demand.”

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