Buyers are warming up to green homes

Winter Garden home builder Jim Rahman says he recently had an epiphany: Green building makes sense.

When Rahman, owner of Westmont Homes, was given the opportunity to build a green demonstration home for the 2008 International Builders' Show, he says he looked over the guidelines and thought, "We do that already, and we do that already. "

Green construction practices focus on protecting the environment through energy-efficiency, resource management and improving durability and indoor air quality.

And so, the epiphany -- green building wasn't some impossible standard. In fact, Rahman says, "We were already halfway there. We decided to ramp it up and be completely green and call ourselves that."

That's good news for Central Florida home buyers who are seeking -- but can't find -- eco-friendly homes. Although the housing market is cooling, recent surveys indicate that in the green-home sector, supply is not yet meeting demand. Industry experts say they expect that to change as more builders join Rahman in converting to a green philosophy.

In fact, predictions are that the industry is near the tipping point, meaning that in the future, builders involved in green building will outnumber those who aren't.

Currently, "there are not enough green builders out there, and demand is exceeding the homes available," says Harvey Bernstein, vice president of industry analytics, alliances and strategic initiatives for McGraw-Hill Construction, a division of McGraw-Hill Companies in New York. Bernstein spoke at an April 16 teleconference about the growth of green building. He says the deficit is worse in the Eastern United States.

A recent survey by McGraw-Hill and its co-sponsor, the National Association of Home Builders, represents the first good look at the green-home market because it screened green homeowners from a group of 450,000 U.S. households. The survey found that 85 percent of 115,885 green homeowners say they are more satisfied with their new green home than with a previous conventional home.

Another finding: About 40 percent of those who recently undertook a remodeling or renovation project said they used green products or materials.

Gopal Ahluwalia, vice president of the NAHB Research Center, said during the teleconference that consumers today are increasingly concerned about energy costs and environmental issues. He said results from surveys and focus groups indicate that buyers are willing to pay extra -- $17,000 more on a $292,000 home -- for a house that incorporates certain green features that will lower utility, maintenance and operating costs.

"People are becoming more conscious of global warming and other environmental issues," says Roy Bonnell, executive director of the Florida Green Building Coalition. Builders, too, are expressing a desire to "do what's right," he says.

But many also recognize the green label can help them to differentiate themselves in a slow market.

Risks and rewards

Previously, builders have been cautious about "going green" because changing building methods is risky, says Ken Mitchell, president of the corporate land division of Mercedes Homes in Melbourne.

He says surveys might suggest that buyers will pay extra for green upgrades, but builders have to ask themselves, "What if buyers don't really want that?"

More builders are beginning to take that risk. In 2005 and 2006, there was a 20 percent increase in builders "dedicated to green-building issues," says McGraw-Hill's Bernstein. This year, it's expected to grow by another 30 percent.

The Florida Green Building Coalition membership reflects that. Membership grew from 261 in March 2006 to 416 this March, and the number of homes in Florida certified green by the group is expected to reach 1,000 sometime this year.

Although the green-building movement has plodded along steadily for the past few years, it has "taken off" in recent months, Bonnell says. "We're beginning to see a lot of small builders committing to it."