Going green is a hard sell for struggling home builders

[?]

Mainstream home builders are under growing pressure to go green. 

Consumers are asking for it, cities are urging it and industry is pushing it. 

But taking on green building won’t be easy for struggling builders whose main focus has been to regain their footing in a sluggish market.  Many custom builders already have embraced the style of construction that emphasizes conservation of energy, water and materials. Yet going green for the large national companies that build most of the houses in metropolitan Phoenix means overhauling their production-driven businesses, which could be risky at a time when revenue is down and sales are stalled. 

“These guys are fighting for their lives at the moment,”‘ said RL Brown, a Valley housing analyst. “They’re trying to figure out how to make a sale, how to carry the burden of the inventory, how to get rid of the excess land, how to get the cancellations to go away. They’re into serious, hard marketing challenges right now. They’re not into that (green) kind of thing.” 

Industry, however, is. 

The National Association of Home Builders, or NAHB, is creating guidelines to help companies incorporate green-building practices and to offer consistency throughout the industry.  

And the U.S. Green Building Council is wrapping up its pilot program for evaluating houses and expects to issue a formal rating system in the fall. 

Home builders recognize the market, and many already incorporate features such as dual-pane glass and low-water bathroom fixtures. Green building, though, involves a checklist of other items: ductwork placed in “conditioned” enclosures or “gray water” systems that recover water from kitchens and bathrooms and laundry rooms and use it to water the landscaping. 

Those things cost money. And builders question whether enough buyers are willing to spend more on a home.  

Green construction typically raises the initial cost of a house about 5 percent above the non-green competitor, said Thad Johnson, president of SolarTerra, a Williams-based company that designs and builds solar systems, alternative wall systems and water-preservation systems. 

Yet it may be hard persuading buyers to spend even $5,000 more for solar water heating when they could use the money to upgrade countertops, pay closing costs or buy down the mortgage rate.  

“If we implement it, does it cost a certain amount of money that makes the consumer not want to purchase it?” asked Sean Terrell, director of purchasing for Pulte Homes’ west Phoenix area.  

It’s tough for builders to take on anything that will significantly bump the price of their houses. Right now, they’re struggling to get their finances in shape as they try to clear an excess of inventory. At least 20,000 unsold new homes in the Valley wait for buyers, according to various analysts.  

Doug Fulton of Tempe-based Fulton Homes said his company has started to sell houses below cost in some fringe markets, and he believes other builders are, too.  

It’s hard to think green in that environment. 

“If it sold homes and made sense, I’d do it,” Fulton said. “We’re just trying to keep our heads above water. It’s a little brutal out there.”

Glen CrenoThe Arizona Republic 

Discussion Forum

Topic	Posts	Last Poster
Transaction management	1	furman89grad
Life Outside of Real Estate	15	AgentGlobal
Agents Needed - Register Today!	1	mycondospot
Ethical values in real estate business	6	jespiritu
Referrals to Reno, Nevada	1	RenoRealtorPat
NEED AGENTS / & REFERRALS	49	sharonross
Is Social Media Marketing Effective in Real Estate Industry?	4	rhukill
MLS exposure without paying the commissions!!	9	TeamRemaxVision
PMI	1	amerca7163
Ethics	3	mrbrian

RSS feed | Trackback URI

Comments »

No comments yet.

Click here to cancel "reply".

Name (required)

E-mail (required - never shown publicly)

URI

Your Comment (smaller size | larger size)

You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong> in your comment.