While green home certification isn’t exactly all the rage in the northern suburbs of New York City, a new study titled “Value of Green Labels in the California Housing Market" has found that homes in California branded with LEED for Homes, EnergyStar, or GreenPoint Rated designation are significantly more valuable on the re-sale market than properties lacking third-party green certification. In fact, study co-authors Nils Kok and Matthew E. Kahn concluded that the aforementioned labels are capable of adding a "green premium" of $34,800 —  or roughly 9 percent — to the typical, on-the-market California home valued at $400,000. So yes, green label weary California homeowners: investing in energy-efficient HVAC systems, extra insulation, improved indoor air quality, and dual-flush toilets will garner you a decent amount of extra green if you do eventually decided to sell.


For the 32-page study — the first to provide "systematic evidence on the effects of green labels attesting to the energy efficiency and sustainability of homes on consumer choice" — Kok, a Netherlands-based visiting scholar at UC-Berkeley, and Kahn, an economics professor at the UCLA, tracked data of the 1.6 million single-family homes sold in California from 2007 to 2012 and compared 4,300 homes boasting green label certification against label-less homes of similar size, age, location and sought-after amenities like swimming pools and views — all factors that weigh heavily into a home’s overall value. Kok and Kahn discovered that homes sporting green labeling-related price premiums sold for more money in hotter areas of California, particularly east of the L.A. metro area, which makes sense considering that homes in toasty climes are generally more expensive to cool.


Research also found that green premiums were higher in wealthier, eco-minded parts of the state with high instances of hybrid vehicle registration. Kok explains the relationship between green homes and hybrid vehicles, one that he dubs “the Prius effect,” to the Los Angeles Times: “People sometimes buy a Toyota Prius not just because of the fact that it's more efficient but because of environmental virtue. People might buy a green home because of ideology. In areas where the penetration of hybrid vehicles is higher, we find the premium paid for green homes is higher as well."


Click here to read the study in its entirety. Any California homeowners out there care to share how going the green home label route impacted your home’s sale?

Via [L.A. Times]

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