The Energy Star Certification On Home Prices - 1742 Words

Despite the well documented benefits of above code certification programs like the ENERGY STAR ® Certified New Homes Program, the question remains for many home builders and buyers of how these benefits impact property value. This report provides statistical analysis to quantify the impact of ENERGY STAR Certification on home prices in the state of Maryland between 2010 and 2016. A regression model was used to isolate the impact of the ENERGY STAR Certification on the home value and control for home characteristics. ENERGY STAR Certified homes were found to have a statistically significant price premium ranging from 2.1% to 5.2% when compared to non-certified homes. These results are based on a sample of 2,723 ENERGY STAR homes taken from†¦show more content†¦It also represents an opportunity. As energy and environmental awareness continues to grow, consumers are recognizing residential energy efficiency as an easy, low cost way to optimize energy use, financial resources, and occupancy comfort while reducing their environmental impacts. The Shelton Group’s Energy Pulse 2013 Report found 81% of consumers surveyed stated that energy efficiency would impact their home purchasing decision . Echoing these findings, a recent 2014 report by McGraw Hill Construction surveyed builders and found 73% of single family home builders and 68% of multifamily builders agree that customers are willing to pay more for a green home. In addition to this willingness to pay, 47% of single family builders and 59% of multifamily builders found green homes to be more marketable. This number significantly increases to 65% for firms that construct more than 30% green projects (McGraw Hill Construction, 2014) . Building certification programs, like the ENERGY STAR ® Certified New Homes Progr am, have been created in response to the consumer demand for more comfortable and efficient buildings. Despite the growing popularity and the benefits of these programs, adoption of above code certification have been dampened by the lack of empirical evidence and the quantification of a price premium associated with these certifications. This paper will address this problem and quantify the price premium of ENERGY STAR ®