Market valuation of certified green homes : a case study of Colorado's Built Green and Energy Star programs

Abstract

Green building is a rapidly growing industry. The residential sector is responsible for 21.8 percent of the United States' energy consumption so an increased penetration of the green building industry could affect national energy consumption. Previous willingness to pay studies suggest that buyers are willing to pay a premium for green homes. The presence of a green certification is used as an indicator for sustainable attributes in homes built and sold in Colorado between 1999 and 2009. A hedonic price regression model predicts the sale price of the home as a function of home attributes and green certification status. The presence of green attributes fails to statistically affect the sale price indicating that, contrary to survey data, buyers may not have a willingness to pay for green construction attributes.