Friday, January 24, 2014

The Latest in Green Home Appraising Methods


 written by Dr. Lee Ball
Appraising “green” homes can be complicated and confusing, especially if you are not sure what supposedly makes them green. Many homes built in North Carolina in 2013 had some type of green feature. In fact, North Carolina leads the nation in green building in terms of volume (http://www.homeinnovation.com/about/blog/a_year_in_review_for_ngbs). As a result, residential appraisers need to study the market and get green appraisal training in order to legitimize their competency as this market trend continues, especially since the market data drives the adjustment process. The process of making adjustments to homes with green features or certifications may require an approach that the residential appraiser is not accustomed to.

The sales comparison approach or paired sales analysis is not reliable in some markets due to the lack of available data. This requires the appraiser to use other methods such as the cost and income approaches in order to provide evidence for adjustments related to green building features. Fortunately, there are numerous resources available to the appraiser.  For the cost approach to making adjustments, appraisers can reference the Marshall and Swift Green Building Cost Supplement or RS Means Green Building: Project Planning & Estimating, 2nd Edition in order to accurately estimate the cost of certain features (http://www.rsmeans.com/bookstore/detail.asp?sku=67338A).

The income approach can be used by calculating annual operating expenses which are usually much lower in residential properties with energy efficient or green building certifications or features.   Reduced operating expenses or monthly/annual savings are examples of quantifiable “positive cash flow” which benefit homeowners on the day they move in. Monthly utility savings can also be calculated into a contributory value by using the present value of the annual energy savings, the mortgage interest rate, and the anticipated life of the savings (http://www.appraisalinstitute.org/library/bok/highperformance.pdf). Contributory value can also be calculated by multiplying monthly energy savings and the property’s gross rent multiplier.

Other methods include using market data such as the McGraw HillSmart Market Report 2012 which stated that the added cost to build a green home was approximately 7% above the cost to build a conventional home.

Our next blog will focus on how to use a home’s HERS score to demonstrate added value.

The NC Energy Efficiency Alliance is proud to offer CE training for Appraisers seeking knowledge of this subject matter. Please contact us for more information and to book trainings.

References:

 

Monday, January 13, 2014

North Carolina Leads the Nation in Volume of NGBS Green Building Certifications

The following blog is an excerpt from the Home Innovation Insights Blog  written by Cindy Wasser. To view the complete blog, click here.

Green Home Building Trends from 2013


This past year was a big year for Home Innovation’s NGBS Green Building programs, both in terms of new developments/changes and program growth. If you haven't already, I'd encourage your to take a look back at Michelle Desiderio’s Green Building Odyssey post from last April that described numerous program developments from just the first quarter of 2013.

Here are a few notable certification trends we saw last year:

▪North Carolina Still Leads Nation in Volume
North Carolina continues to lead the nation in terms of volume, as green building activity is strong throughout the Triangle and Charlotte metro areas. There are several reasons for the high-volume activity in the state.
  • Green Building Champions. Green-minded HBA leaders, third-party professionals, and builders/developers are working to make green certified homes mainstream — many who have made particularly notable contributions are in the Raleigh/Durham area.
  • Covenant Restrictions in Some Communities. Some N.C. developers are stipulating green certification in the land development agreement. All homes built within those communities will be green certified to the NGBS or another program.
  • Local Incentives. Catawba (Charlotte metro area) and Chatham County (Raleigh metro area) offer permit fee rebates to builders certifying to the NGBS.
NGBS certification has good penetration throughout the East Coast and Midwest. States like Maryland, New York, and Delaware experienced strong certification activity due to local/state government incentives.  

▪Continued Growth for 2014
Given the total number of NGBS Green Registered units in process, Home Innovation is positioned to more than double the number of certifications we will issue in 2014 and 2015. We believe that builders have recognized NGBS Green certification offers an affordable, streamlined, and yet rigorous path to independent, third-party green certification.

This past year was a big year for Home Innovation’s NGBS Green Building programs, both in terms of new developments/changes and program growth. If you haven't already, I'd encourage your to take a look back at Michelle Desiderio’s Green Building Odyssey post from last April that described numerous program developments from just the first quarter of 2013. - See more at: http://www.homeinnovation.com/about/blog/a_year_in_review_for_ngbs#sthash.rdIDxMGI.dpuf


5 Green Home Building Trends from 2013

This past year was a big year for Home Innovation’s NGBS Green Building programs, both in terms of new developments/changes and program growth. If you haven't already, I'd encourage your to take a look back at Michelle Desiderio’s Green Building Odyssey post from last April that described numerous program developments from just the first quarter of 2013.
- See more at: http://www.homeinnovation.com/about/blog/a_year_in_review_for_ngbs#sthash.4f3R7luY.dpuf

5 Green Home Building Trends from 2013

This past year was a big year for Home Innovation’s NGBS Green Building programs, both in terms of new developments/changes and program growth. If you haven't already, I'd encourage your to take a look back at Michelle Desiderio’s Green Building Odyssey post from last April that described numerous program developments from just the first quarter of 2013.
- See more at: http://www.homeinnovation.com/about/blog/a_year_in_review_for_ngbs#sthash.4f3R7luY.dpuf