In today’s home market, the value of a home can fluctuate greatly depending on the “usual suspects” in a home’s value – things like location, size, school district, and much more. There’s one factor that is becoming more and more of a focal point – the home’s energy efficiency and overall performance.
Many buyers, sellers and even home appraisers are taking a much closer look at a home’s energy performance when determining how much that home is worth to them (or to the general market). It’s becoming a hot topic; no pun intended. In this blog post series, we’re going to take a look at some of the reasons why increasing your home’s energy performance can lead to a higher value being placed on it. You’ll find part 1 below:
- An efficient home means lower cost of ownership. Most homebuyers aren’t solely looking at the price tag of a house on the market. They are thinking about other associated costs that would come after the purchase is made. Having a very energy efficient house means the owner pays lower bills. This lower cost of ownership is very attractive to buyers and the housing market, driving up the overall value of the home. Even if you’re not planning on selling, increasing your home’s overall efficiency can greatly increase its value for years to come.
- Comfort means value. An energy-efficient home is typically a very comfortable home. The same can be said on the other side as well. Having a home that’s very inefficient not only decreases the comfort of the home, but can also quickly drive down the perceived value of the home in the mind of homebuyers or appraisers. Examples that could be detrimental to home performance and comfort could be poor insulation, drafty windows and doors, uneven temperatures from room to room, etc. A more comfortable home is a more desirable home. A more desirable home is a higher-value home.
- Small increases can lead to big value. Even simple or “cheap” energy fixes can have an impact on the value of a home. According to The Appraisal Journal, a $1 reduction in energy cost can lead to more than a $20 increase in the value of the home. While there is still yet to be a formalized adjustment process in the home appraisal market, these types of big adjustments are definitely happening.
The correlation between home efficiency and home value is increasing over time. As people become more aware of energy efficiency issues – not just how they affect their individual home, but the environment in general – the importance continues to rise. If you have any questions about the best ways to increase your home’s value through added efficiency, contact us today.
