Energy Efficiency in the Housing Market NAR Research Arun Barman

Overview Putting residential energy consumption in perspective Review of home buyers preferences in terms of energy efficiency Differences in energy usage – Age and size of homes – Regional variation Factors affecting implementation of upgrades – Home values and expected tenure – Payback period – Government tax incentives

Residential Energy Consumption in Perspective Source: Energy Information Administration / Annual Energy Review 2009

Home Buyer Preferences Source: NAR 2010 Profile of Home Buyers and Sellers

Energy efficiency per square foot better for newer homes, but homes are getting bigger Source: 2005 Residential Energy Consumption Survey

Regional Variations in Energy Consumption Source: 2005 Residential Energy Consumption Survey

Share of annual energy expenditures spent on heating and air-conditioning by region Source: 2005 Residential Energy Consumption Survey

Annual Energy Costs Per Year Source: 2005 Residential Energy Consumption Survey

Annual Energy Spending: Top Four States Source: 2005 Residential Energy Consumption Survey

Does it make sense to retrofit homes? According to the Profile of Home Buyers and Sellers (2010), the median tenure of sellers was 8 years. The decision to upgrade has several components – Piece of mind (satisfaction people have from being environmentally friendly) – Savings while occupying the home (if the payback period for the upgrade is less than the anticipated tenure in the home) – Resale value (some upgrades may have a higher resale premium than others, though more research is needed in this area)

Payback period Added cost of upgrade =Payback period in years Estimated savings per year

Sample payback periods Northeast Source: Energy Efficient Rehab Advisor

Compare that to the West region Source: Energy Efficient Rehab Advisor

Sample Payback periods for retrofits Source: Energy Efficient Rehab Advisor

Choice of “green” retrofits are not only made by consumers Geography and age of home matter Government incentives – Government rebates and tax credits for certain types of upgrades “Cash for appliances” – Energy Star program Feasibility of projects – DIY Projects vs. Larger Projects (i.e. programmable thermostat vs. window replacement) – Contractors who do green remodeling may or may not be available at reasonable cost in your market area

Links and Contact Information For more information: – NAR Research ( My – Department of Energy ( – American Housing Survey ( tml) tml – Energy Efficient Rehab Advisor (