A new study from McGraw Hill Construction suggests a number of reasons why builders should get up to speed on green building.
First, the green building market is growing. According to a summary of the report, the green share of the single-family residential market has grown from 2% in 2005 to 23% in 2013 and should reach between 26% and 33% of the market by 2016. That would be worth as much as $105 billion.
Green building grew even during the recent recession. The overall housing market took a nosedive between 2005 and 2008, declining from a value of $315 billion to $122 billion. But the green housing market showed a healthy increase over the same period, from $6 billion in 2005 (2% of the market) to $10 billion (8% of the market) in 2008.
Over the next few years, the industry bumped along, reaching a value of $97 billion by 2011. But green building continued a steady climb to reach $17 billion by 2011.
Both builders and remodelers see green growth ahead
New-home builders seem to be adopting green practices faster than remodelers. In five years, 62% of builders expect to be doing green on more than 60% of their projects, McGraw Hill reports, and 30% expect to be building green on more than 90% of their projects.
By 2018, the study says, 32% of remodelers expect that more than 60% of their projects will be green.
Finally, many builders find customers are willing to pay more for green features.
“Considering the economy, it is notable that over 68% of builders and 84% of remodelers report their customers are willing to pay more for green,” the study says. “Both of these are an increase over the reported results from 2011 where 61% of builders and 66% of remodelers reported the same. The big jump for remodelers may be due to the improving economy and the increased awareness and accessibility to affordable green building products and practices.”
On average, builders say consumers will pay 3% more for green homes and 5% more for green remodeling.
McGraw Hill said findings on the green home marketplace and other results from this study would be published in April in partnership with the National Association of Home Builders. It will be the fourth in the SmartMarket Report series on the green home market.
This post corrects and updates an earlier version of the same story with more recent data.