McGraw-Hill Construction today released findings from a new Green Home Builders and Remodelers study at the National Association of Home Builders (NAHB) International Builders’ Show in Orlando. Green homes comprised 17 percent of the overall residential construction market in 2011 and are expected to grow to between 29 percent and 38 percent of the market by 2016. By value, this equates to a five-fold increase, growing from $17 billion in 2011 to $87-$114 billion in 2016, based on the five-year forecast for overall residential construction.
According to the study, construction industry professionals report an even steeper increase in green home remodeling; 34 percent of remodelers expect to be doing mostly green work by 2016, a 150 percent increase over 2011 activity levels. Many homebuilders have shifted to the remodeling market due to the drastic drop in new home construction. In fact, 62 percent of the builders who do both new and remodeling work verified that the economy has increased their renovation work.
“The housing market is critical to the U.S. economy,” said Harvey M. Bernstein, VP of Industry Insights and Alliances, McGraw-Hill Construction, “and the results of our study show that despite the drastic downturn in housing starts since 2008, green has grown significantly as a share of activity– indicating that the green market is becoming an important part of our overall economic landscape.”
The green home building study, produced by McGraw-Hill Construction in conjunction with the NAHB and Waste Management, is designed to provide key insights into market opportunities, backed by proprietary research surveys and the power of the Dodge database.
By 2016, many more builders anticipate that they will be dedicated to green building work on over 90% of projects—33 percent expect to be dedicated to green work in 2016, up from 17 percent in 2011. Remodeling will grow even more dramatically—22 percent of remodelers report that they anticipate they will be dedicated to green work in 2016, nearly triple the 8% who report being dedicated to green work in 2011.
Many factors are driving the green homes market, with “higher quality” and “increases in energy costs” topping the list, indicating that today’s green homebuyer is not just a green consumer. Buyers recognize that green homes have lower bills due to higher building performance. The reported costs of building a green home have also gone down significantly. Builders report that the cost to go green is now 7 percent, as compared to 10 percent in 2008 and 11% in 2006.
While green is growing across the U.S., three regions are seeing higher than average growth. The West Coast has seen the highest green growth; the Midwest’s northern region, west of the Mississippi, is second highest; and New England ranks third.
Source: PR Newswire