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Why Today's Homebuyers are Attracted to LEED-Certified Homes

First Republic Bank
November 1, 2021

  • With recent reports showing 20% of greenhouse gas emissions come from residential housing, environmentally-conscious homebuyers are in search of LEED-certified homes. 
  • But what constitutes a LEED-certified home — and why should realtors and prospective buyers pay attention to them? 
  • Here's why LEED-certified homes are a leading homebuying trend in 2021 and what they mean for the future of real estate. 

As the consequences of climate change become increasingly hard to ignore, many homebuyers are adopting sustainable construction practices and materials. A report conducted by the School for Environment and Sustainability at the University of Michigan states that 20% of greenhouse gas emissions come from residential housing sources, including California and Boston. One notable exception is New York, which produces less per capita greenhouse gas emissions overall. 

In response, there's been a higher demand for more eco-friendly homes, such as ones that are LEED-Certified, or ones that meet the Passive Building standards. According to a National Association of Home Builders (NAHB) survey, 68% of buyers desire the more environmentally-friendly choice, with 46% paying up to an extra $9,999 on a home that can save them $1,000 on utility bills annually.

The good news is that many of these homes don’t have to come at the expense of aesthetic and, in some cases, cost. 

No matter what the real estate market is in your area, being able to highlight green features (or the potential of having them in an older home), can make a property more attractive.  

What Are LEED-Certified Homes?

Leadership in Energy and Environmental Design (LEED) is a third-party system that verifies green buildings. As one of the more well-known verification systems, LEED certifies a building has followed a set of principles that can include its location, water efficiency or reduction, energy performance, materials, indoor air quality and access to public transportation. Perhaps most importantly, projects or buildings should address local environmental challenges.

For instance, Court Square is being developed in the Long Island area and is a mixed-use building including luxury condominium dwelling units. Once complete, it will be certified LEED Gold and has already won New York State’s Building of Excellence award. Features include heat pump dryers, induction cooktops and smart-learning thermostats. 

Another recognized standard in the eco-friendly housing space is Passive House. Started in Germany, Passive House standards help to significantly save on energy costs — and boast an average of 70% reduction in energy consumption. In California, most Passive House homes are located around the Palo Alto and Mountain View area, and you can take a look at specific projects on the Passive House California website.

Why LEED-Certified Homes?

Whether a building is LEED-certified or built to Passive Building standards, what homebuyers care about is living out their values through their home. These homes are alluring to homebuyers, as they meet their demands for sustainability and contribute to positive environmental impacts that can last for generations.

LEED-certified and Passive House homes can also drastically reduce costs. Not only can they reduce energy loss, but they also cut down on the amount of energy consumed in the first place. And some eco-friendly materials are also more budget-friendly than their traditional counterparts. Why not tout the benefits of an energy-efficient home that can save homebuyers money in the long run?

Plus, sustainable homes offer a better standard of living for their homeowners. Using more green materials like LEED-certified paint or better insulation leads to improved indoor air quality. These materials can also block out extra noises (from outside or appliances, for instance), which leads to less noise pollution. 

Green Trends in 2021 and Beyond

When it comes to highlighting green trends, 65% of real estate professionals surveyed in the Realtors® and Sustainability report said promoting energy efficiency in their listings helps them draw potential buyers.

Though some of the following trends have been around for a few years, they’re continuing to grow in popularity. According to data collected by NAHB, these are the most attractive green home features to prospective buyers: 

  • Energy Star ratings: To attract homebuyers, it's important to highlight how they'll save on energy consumption, and consumers are currently on the lookout for Energy Star appliances.  These products are designed to use less energy, saving homeowners on their electric bills and causing less harmful emissions.

  • Energy-efficient lighting: Of course, natural lighting is best, but consumers are also interested in energy-saving items like LED lighting and smart lighting devices, such as a circadian lighting system.

  • Insulated windows: Whether it’s triple-pane or smart windows that are designed to heat up the home, consumers want the best way to prevent energy leakage and to save money on utility bills. 

  • Better insulation: Consumers ideally want insulation that’s higher than required by local code. During the winter months, better insulation can ultimately reduce energy bills by keeping warm air inside the house. 

Other examples that can help attract homebuyers include homes with solar panels and sustainable building materials. Overall, homebuyers — including first-time and repeat buyers — prefer a home that’s high quality, even if it means purchasing a smaller home. 

Helping Homebuyers Decide

When it comes to helping homebuyers who desire green-friendly features, look at what kind of budget they have to work with and see how you can align that with their values. For instance, can they afford the price tag of a Passive House? Or is their budget more in line with purchasing an existing home and remodeling it to LEED-certified standards? Consider highlighting eco-friendly features, or suggesting that your client bring along a contractor to estimate their renovation options. 

Ultimately, you want your clients to be realistic about what’s available in their desired area and budget. If there’s a home your client loves in Arlington but they’re not interested in the long commute to downtown Boston, it won’t be a good fit. Or if homebuyers want to be in an area that’s more urban, they may be able to find a LEED-certified condo, if they're willing to pay the higher price tag.

 

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