This week I spoke with Brad Hyson from the Apeiron Institute for Environmental Living, to talk about Sustainable RI and the Sustainable Energy Festival. If you are a regular listener, you know we have been focusing on environmentally friendly building alternatives and for good reason. The average household produced 12.4 tons of carbon dioxide from its household operations every year. There are hundreds of ways to improve the environment just by doing things around your house.

Major Green construction can add anywhere from a few hundred dollars to a few hundred thousand dollars. They pay off with utility savings, tax credits and healthier air quality. In terms of resale value, you won’t necessarily get a huge premium but it will likely sell at the upper end of the range and quicker, as it will have something more going for it than an equivalent traditional construction.

Green Buildings appeal to different people differently:

Thinkers want things quantified. A home’s energy efficiency rating is a big selling point with these buyers.

Drivers want to be recognized as the best. They want others to know what a great home they have, so they are a good source of customer referrals.

Amiables relate to the comfort, health, and safety benefits of a green home.

Expressives will want to use their added purchasing power to buy frills such as nicer kitchen cabinets.

While it may seem like an upscale item, Lower-income consumers are an important market for energy-efficient housing. They spend a greater percentage of income on energy than those that are well off and that percentage is growing. She cites Department of Energy figures showing that low-income consumers spent 14 percent of their annual income for energy bills in 1999 and 19 percent in 2000.

Furthermore, energy savings can be translated into a more expensive home. Some energy-efficient mortgages let prospective buyers add their future energy savings into their income—qualifying them for a higher loan. This added buying power, often called “the 2 percent stretch” because lenders sometimes allowed homebuyers to increase their income-to-debt ratios by 2 percent, can mean a significant increase in the price a buyer can afford to pay.

This Week’s Real Estate Insight:

More and more, with rising energy prices and climate awareness, Green buildings will help sellers see green dollars.