Appraisal Value of Energy Star Homes

With soaring energy costs in the country, the question is being asked more and more if the energy efficiency of a home should be taken into consideration in the appraisal process? 

The answer is yes. 

As energy costs rise, the value of a home that is more energy efficient than an average, conventionally built home should receive a higher valuation.  And that is just where the industry is beginning to turn, as fewer people can afford to pay two mortgages—one to the bank and one to the utility company.

Energy Star Homes

The Energy Star program for homes is a government based organization, dedicated to helping consumers save money and the environment.  The program emphasizes consumer education about energy efficient building practices and products.  

Energy Ratings

Homes with higher energy efficiency then the average home, in addition to saving money on their heating and air conditioning bills increase the amount of money (discretionary income) each month left in their pockets.  It stands to reason that an Energy Star Home should have a higher value.

Home Performance with Energy Star

Energy savings begin at a much lower level than a complete home overhaul.  Energy savings can start with your everyday home appliances such as your microwave, light bulbs, DVD players and more. 

Did you know, that even a small change such as switching from an incandescent light bulb to a longer lasting compact fluorescent bulb can save you over $60 in an 8-year period based on replacement and operating costs?  

And that is just based on one light bulb.  When a home is filled with products that meet Energy Star standards, not only will the savings accumulate, an appraiser can add value to your home based on the homes overall Energy Star performance.

Energy Star Program Status 2011

Before the 2008 housing market crash, there were approximately half a million homes in the United States that were Energy Star rated.  Proponents of the Energy Star Program hoped by 2010 that there would be over two million homes rated.  That is a small step in comparison to the more than 128 million homes in the United States today that are not rated.  However, it is surely a step in the right direction. 

The Energy Star program was created not with the resolve just to rate homes for overall efficiency, but to make consumers more aware of the waste of energy in homes that drive up energy bills. 

The forward momentum of the Energy Star Program may have been dealt a blow in the 2008 housing market crash, but rest assured there’s no turning back. Gone are the days when antiquated, energy wasteful building practices will be accepted by consumers and regulators. Thus, the value of an energy efficient home increases because market demand makes it so.