Green Homes For Sale: Understanding Third-Party Certifications
Back in 2011, I participated in a beta test of the software for the Department of Energy’s Home Energy Score (HES). It was introduced as a standardized method to report the energy saving assets for a home, to compare the home’s likely energy use to other homes and reveal opportunities for improvement. My overriding impression of the program was that they were extremely careful - they wanted it to mean something.
On January 1, 2018, Portland, OR became the first city in the country to develop an energy disclosure policy that requires that almost every home listed for sale receive a HES. The city, with the help of the nonprofit Earth Advantage, trained professional energy assessors and worked with realtors to make sure the information is able to be included in listings and understood by all before selling a home.
I checked to see how easy it is to find this information in Portland's real estate listings. I searched a national real estate website and quickly found:
A 2-bedroom, 1-bathroom condo in southeast Portland with a living area of 900 sq ft, located on the second floor. Built in 2010, it boasts solar panels and a heat pump system. With a Home Energy Score of 8, its estimated annual energy cost is $800, and its asking price is $299,000.
A 3-bedroom, 2-bathroom single-family home in northwest Portland, spanning 1,800 sq ft with a lot size of 5,000 sq ft. Constructed in 1920, it has undergone recent renovations with energy-efficient features. It has a Home Energy Score of 9, an estimated annual energy cost of $1,200, and is priced at $699,000.
A 4-bedroom, 3-bathroom single-family home in northeast Portland covers 2,500 sq ft with a lot size of 10,000 sq ft. Built in 2015, it features a passive house design with high insulation and ventilation. With a Home Energy Score of 10 and an estimated annual energy cost of $600, it's on the market for $899,000.
It seems the city’s legislative approach has made Portland the Silicon Valley of green home listings in just five years!
Meg Garabrant, Senior. Manager of Real Estate Services for Earth Advantage, works on a national database of homes called the Green Building Registry (GBR). She highlighted how they have successfully brought in certification information from ENERGY STAR homes (new and gut rehabs of existing homes only), Home Energy Score, LEED for homes (primarily for new homes), National Green Building Standard (a subsidiary of NAHB), RESNET HERS Index and others into their database.
Earth Advantage’s Green Building Registry (GBR) highlights homes that have shared energy labeling information but not necessarily those that are currently for sale.
So, I found when I conducted a nationwide internet search on one of the major national real estate website’s currently for sale using some of these green home certifications as keywords, the information remains conspicuously absent in most states.
Here are the top 10 states for the number of homes listed for sale with energy scores or green asset certifications:
Oregon
Washington
California
Colorado
New York
Massachusetts
Minnesota
Vermont
Connecticut
Maryland
As you can see in Oregon, where several cities have made it a requirement, the number of listings where the information is available is notably higher.
Other places that have passed ordinances requiring energy assessments with home sales include:
California: Berkeley, San Francisco, San Jose
Colorado: Boulder
Massachusetts: Brookline, Cambridge, Newton
Maryland: Montgomery County
Minnesota: Minneapolis, Bloomington
Michigan: Ann Arbor
Oregon: Portland, Bend, Milwaukie, Hillsboro
Vermont: Montpelier
Washington: Whole state (pending)
Wisconsin: Eu Claire
There seems to be a strong correlation between states with places that require it and states where the information shows up in real estate listings.
The GBR has made strides in addressing this gap, but Garabrant told me that, “You’ve discovered one of the challenges we're trying to address through the Green Building Registry. Information about a home's green verifications or energy efficiency upgrades, like solar PV, currently isn't consistently integrated into real estate listings.” They plan to share their database of green certifications with the many MLS services around the country.
Such initiatives are crucial. Without consistent representation of energy-efficient certifications, consumers risk falling prey to greenwashing, where properties are falsely marketed as environmentally-friendly without credible validation.
Garabrant emphasized the importance of realtor education, stating, "Understanding this information is vital to help sellers and buyers comprehend its significance as part of the real estate transaction process."
A study by the ACEEE revealed that the market responds most favorably when a home’s energy information is available for all the homes, no matter whether energy scores are high or low. (In some ways, it doesn’t really matter what the score, as a home of any age can be made energy efficient.) A 2019 Austin study found sellers were more inclined to make energy improvements to their property when an energy performance score is mandated.
As the call for sustainable living intensifies, the real estate market is at an inflection point. With initiatives like the GBR and cities like Portland setting the standard, the hope is that green home listings will become the norm, not the exception.
What are the next cities to adopt an energy disclosure policy? Let us help get the word out; email me at edit@greenhomeliving.blog
