A bright—and green—spot in the housing market

You don’t have to be an economist to know that the U.S. housing market, for both existing and new homes, is in a major slump:
• For the first quarter of 2007, sales of existing homes were at a seasonally adjusted annual rate of 6.41 million units in the first quarter, a 6.6 percent decline from the same period in 2006, according to the National Association of Realtors.
• The NAHB/Wells Fargo Housing Market Index, which measures how builders view the housing market, stands at a 15-year low of 30. (To put that number in perspective, anything below 50 reflects a poor outlook.)
• RealtyTrac, which tracks foreclosures on its Web site, reported on May 14 that a total of 147,708 foreclosure filings were made nationwide in April, a surge of 62 percent from a year earlier. That figure represents one foreclosure filing for every 783 U.S. households, says the company.
• And home-improvement retailer Home Depot is taking a big hit in the weakened market, according to Bloomberg.com. On May 15, Home Depot reported a 30 percent slide in net income as sales grew less than 1 percent, the smallest gain in four years.

The sole bright spot in the otherwise dismal housing market is green building, according to the participants in last month’s National Association of Home Builders Green Building Teleconference.

“People are willing to pay more for homes that are energy efficient and healthy,” said Gopal Ahluwalia, the NAHB’s vice president of research. Indeed, the average price of a green home is $310,000 versus $292,000 for a standard home, says Harvey M. Bernstein, vice president with McGraw-Hill Construction.

According to a NAHB study, homeowners don’t regret their decision: 85 percent of people who bought a green home were glad they did and would recommend that others buy green.

Americans are also willing to spend money remodeling their homes to make them greener, and they’re willing to do one room at a time. Green remodeling makes a home healthier, easier to maintain, less expensive to operate, and more energy efficient, according to Houston remodeling contractor Michael Strong, of Brothers Strong.

Low-e windows are the most popular green products and features in both new homes and remodeling projects, according to both Bernstein and Ahluwalia, followed by energy-efficient exterior doors; air conditioners, heating, and ventilation systems; and insulation. (Use our calculator to determine what size air conditioner is right for your rooms.)

Perhaps the only downbeat news to emerge from the teleconference is that green homes account for only 3 percent of all houses in the U.S.—Celia Kuperszmid Lehrman

Essential information: Keep up with the latest environmental news and trends at GreenerChoices.org.