Will Rising Price of Oil Help Sell Green Homes?

Filed under: Design, News, Economy

What does the revolt in Libya have to do with green home design? Well, now that the price of oil has spiked to over $100 a barrel, energy-efficient green homes are looking better and better.

One reason is that the price of heating oil, the main source of heat for more than 8 million U.S. homes, moves in tandem with petroleum. Today, heating oil costs 25 percent more than it did just two months ago due to fears that popular uprisings across the Middle East could disrupt oil supplies.

Home builders are making the most of the opportunity in an otherwise dismal climate for home sales. KB Homes has taken to labeling its green homes with the type of energy efficiency stickers you're more used to seeing at a car dealership.

The Las Vegas Sun reports Meritage Homes unveiled a new development in Las Vegas where homes come with a solar energy system included in the base price, which begins at $150,000. And Pulte Homes' green houses feature real-time energy usage meters, bamboo flooring and dual paned windows.

There's just one problem: Green home buyers may save money on utility bills, but they're looking at a higher purchase price.

In a survey from the National Association of Home Builders and Whirlpool Corp. released in November, more than half of respondents of all income levels said a green home would be affordable to live in or maintain. But only high-income respondents said they could afford to buy a green home.

Buy New Vs. Retrofit

So which is more cost-effective, moving into a brand-new green home or retrofitting the house you already own? If your brand-new green home is also a lot more space-efficient (fancy way of saying smaller), then it may be a cheaper way to go. Meanwhile, if all you need to do is install solar panels in your current house, maybe that's the economical way to go.

Federal loan programs including FHA, VA and Fannie and Freddie loans offer energy efficient mortgages. These loans let borrowers finance energy-saving improvements by bundling those costs into the mortgage without increasing the down payment. See http://www.energystar.gov/ for more info.

Performing a deep energy retrofit on walls, roof, foundation and more starts at about $150,000, says Emile Chin-Dickey, principal at ZeroEnergyDesign, a Boston-based firm that designs new green homes and also retrofits existing homes. But that retrofit pays off over the long term, say several decades, because it vastly reduces the amount of energy needed to heat the home. He advises clients who can't afford that cost all at once to take a staggered approach and renovate over time.

On the other hand, it's a lot simpler to move into a house that was built green from the ground up. "With a renovation you don't always know what you're going to find, and it's occupied so you may be displacing the people living there.'' Having to move while your house is being retrofitted doesn't exactly sound like an inexpensive proposition.

More Home Energy-Efficiency Tips From Emile Chin-Dickey

o. An air source heat pump -- like an air conditioner that runs in reverse -- is extremely energy efficient. Since it runs on electricity, it's also much easier to convert to a future renewable energy source, like wind or solar.

o. A biofuel pellet stove might be a good alternative to heat a smaller space. Availability of biofuel pellets may be a problem in some areas, however.

Home Heating Stats From TreeHugger

o. 10%: Percentage of your heating bill you can save in the winter by using a ceiling fan which circulates warm air from the ceiling to the floor.
o. 8%: Amount of heat that escapes through your chimney when the fireplace damper is not closed.
o. 5%: Amount of heating costs you save by cleaning your furnace filters monthly. Dirty filters restrict airflow and increase the amount of energy used.
o. $115: Amount of money saved per year by installing an Energy Star thermostat.
o. 15%: Percent efficiency that an Energy Star qualified furnace is over an older furnace.
o. 20%: Percentage of energy saved by using an Energy Star heat pump when compared to a standard new model.

For more insight on mortgages and refinancing see these AOL Real Estate guides:

• Mortgage Jargon in Simple Terms
• How to Get a Low Mortgage Rate
  
• When to Refinance
• Four Ways to Benefit From a Cash-In Refinance

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Get property tax help from our experts.

 

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