By Tom Joyner
There has been a lot of talk lately about being “green”. Many of our customers are asking us, “What’s it all about?” It’s a good question. Some have politicized this concept to a point of absurdity; however, there are real tangible benefits to being green that go straight to your pocket book that might even make Kermit the Frog reconsider his famous lyric. Things have been changing rapidly in the housing industry as Builders, Remodelers, and Trade Partners look for ways to bring value back into home ownership. It’s probably time to start paying attention—if you’re like many Americans your home is the largest investment of your life, so it is important to understand how your home stacks up and how not to get left behind.
Consider the automotive industry for just a moment. We have great love and nostalgia for the great classic cars of our youths. We talk about how they were made of solid steel and wouldn’t dent. We reminisce about the growl of the engines and the freedom that power represented. We tell our kids about how VW Bugs cost just $600 when they first arrived on the scene. We love history. However, do we really want to return to the days before air conditioning, seat belts, airbags, CD changers, built in DVD players, stow-n-go seating, air bags, keyless entry, sun roofs, tire pressure monitors, cup holders, & back up cameras? Do we really want to go back to when getting 100,000 miles out of an engine was unheard of? Do we really want 8 mpg sedans back? Of course, some would say “yes”, but even the diehard enthusiasts probably still drive a mini-van through the week, and unveil their classic only on perfect summer weekends. The fact is, the majority of people demand continual improvement in design features, safety, gas mileage, comfort, and convenience. The auto industry has known this for years. Fortunately for them, a car typically lasts only 7-10 years and then they get to try again. Over the past 100 years, they’ve been able to re-design and re-invent dozens of times.
All of these advancements have come at an added cost—but we’ve been willing pay. Take that same six hundred dollar 1970’s era VW Bug and add all of the modern amenities and safety features and you are looking at a price of over $20,000.
Now consider the housing industry. Most of the homes built 100 years ago are still here today. Homes aren’t nearly as disposable as cars. We all know there wasn’t a lot of great technology available 100 years ago. There weren’t a lot of building standards being enforced either. Energy was free—you just had to feed the furnace with more wood. As progress ensued, and new homes were built year after year, technology improved, building science advance, and codes were established and enforced. With those advancements came added cost. However,
with every advancement made or change in standards, the existing homes are “grandfathered in” and are not required to meet those same criteria. The real estate market has adjusted for this in the relative home value. Look to the downtown areas of older cities and you’ll find 100 year old homes with thousands of square feet, great architecture, unbelievable character and a rich history for well under $100,000. But look closely, and you’ll also find drafty windows, leaky plumbing, squeaky floors, cracking plaster, out-dated electrical wiring, and probably a dark and damp cellar. You won’t find any insulation, except for possibly some old newspaper put in the walls. The furnace will be old, the carpet will be worn, and new appliances won’t fit in the kitchen that was designed last century. The doors won’t quite latch, the closets won’t—oh wait—there aren’t any closets. For that matter there isn’t any air conditioning either. High maintenance and repair costs? You bet.
Newer homes carry a higher price tag for a reason. They are newer, better built, more efficient, easier to maintain, less costly to own, and designed to work best for our currently lifestyles. I’m not just talking about 100 year old homes either–believe it or not, the difference between a new home in 2012 and a home built in 2005 is almost as stark. A new energy code went into effect for the State of Indiana this past April that has required some major changes for all new homes. Here are just some of the highlights of what will be required going forward:
What does this all mean? Basically, it means that the homes will be a lot more energy efficient. Because of all of the different variables that effect energy efficiency in the construction of a home (like insulation, furnace efficiency, number of light fixtures, type and quantity of windows, etc), a Home Energy Rating System (HERS) has been established to compare one home’s efficiency to another. A typical home constructed to the 2004 International Energy Conservation Code establishes the HERS Index and was assigned a value of 100. Each point in the rating lower than 100 represents a 1% energy cost savings, and likewise, every point higher represents a 1% energy cost increase. For example, a home that gets a HERS Rating of 80, for example, is 20% more efficient than a home rated at 100. And a home scoring a HERS Rating of 50 uses half as much energy as a home rated at 100.
The average HERS rating of homes built before 2006 is 130. At my community, The Villas At Timber Run, our homes constructed to the new 2012 standards will score around 70. This means that our homes are nearly half the cost to operate than 95% of the homes in Greenfield. For most people those results in about a $150 per month savings. Do these changes cost more? Sure, probably a few thousand dollars per home. But when you consider the cost of ownership, this is a no-brainer. At Today’s interest rates, a $160K home with $300 per month in utility bills would be the same monthly expense as a $200K home with $150 per month in utility bills. That’s a $40,000 nicer, better home for the same money! Then when you add in the fact that the new home has a warranty and brand new everything, and doesn’t smell like the previous owner’s dog, why would anyone ever buy a used home? Smart buyers have figured this out, but many are still lured in by the “cheaper” price of the used home market and neglect to consider the true cost.
We see this trend of energy efficiency improvement continuing in our industry. According to William Fay Executive Director, Energy Efficiency Codes Coalition, in 2008, US buildings accounted for 40% of the energy consumed and 71% of the electricity. Moving toward reduction in energy is not only important for the mission of National energy independence, but it also protects home values by reducing the cost of homeownership which is the backbone of our economy. Many lenders are now taking HERS Ratings into consideration for loans because they look at total monthly expenses and recognize that lower utility costs offset mortgage payments. Is this your year to make a move while others sit on the sidelines and miss the opportunity to invest in the “right home”? Go green, save green—it’s that simple.
For more information on HERS Ratings including finding a certified auditor or tips on how you can improve your home’s efficiency, log on to www.resnet.us and as always be sure to contact any of our expert Builders and Associate members for your next project!