Regional Spotlight—A preliminary analysis shows that Chicago single family real estate listings that disclosed energy costs spent less time on the market and had a higher closing rate.
In July 2013, the City of Chicago became the first municipality in the country to disclose residential energy costs (gas and electric) when a home was listed for sale via a multiple listing service (MLS). The achievement was the result of a unique partnership between Midwest Real Estate Data (MRED), the MLS serving Chicago; City of Chicago Office of the Mayor; and Elevate Energy. Now, when a home is listed for sale, Realtors® can access an energy cost disclosure report for a property in near real-time, which they in turn are required to provide to home purchasers pursuant to City of Chicago ordinance.
“Chicago is working to ensure that potential homeowners can make smart, informed decisions about energy efficiency when purchasing a home, and less than a year into this initiative, energy cost disclosure reports are already creating a more streamlined marketplace and a more sustainable city,” said Mayor Rahm Emanuel. “Through our Sustainable Chicago 2015 plan, we are working to ensure that Chicago continues to be a sustainable, prosperous, and healthy place to work and live.”
With seven full months of data collected, and just in time for Earth Day, Elevate Energy has reviewed this early MRED data to see how energy cost disclosure has performed in the marketplace. Of the 18,605 single family homes listed on MRED between July 1, 2013, and February 19, 2014, 10 percent of homes disclosed their energy costs. Home listings that disclosed energy costs spent less time on the market. In Lakeview, for example, homes that disclosed energy costs spent a median of 43 days on the market compared to a median of 63 days on the market for homes that did not disclose their energy use. Home listings that disclosed energy costs also had a higher closing rate: 66 percent of homes that disclosed compared to 53 percent for homes that did not. It should be noted that these preliminary findings only help describe attributes of homes that disclose energy costs and do not imply causation.
Energy cost disclosure facilitates more informed decisions for all involved in the real estate transaction. The recent analysis demonstrates the value of energy efficiency in the marketplace.
“Homeowners that invest to improve the energy efficiency of their homes should have a clear, consistent way to document those improvements when they opt to sell, and buyers deserve to be able to get a full picture of homeownership, which includes energy costs,” said Anne Evens, CEO of Elevate Energy. “Our preliminary analysis of the MRED energy disclosure data is encouraging. We’ll continue to analyze the data over time to get a more complete understanding of how listings that disclose their energy costs may or may not set themselves apart.”
The analysis is the result of a strong local collaboration that focused on core competencies amongst partners across real estate, technology, and energy efficiency sectors.
For more information, visit MREDLLC.com.