

Kevin Perry and his wife, Susanne Nobles, purchased a 90-plus-year-old Craftsman-style single-family home in Petworth. Their home was part of a study of energy and resource-conserving houses. (Katherine Frey/The Washington Post)

What is going “green” worth in Washington home real estate? If you rehab a house to exacting energy and environmental standards, or install a solar-panel array on your roof, does your house command more when you sell?

If you seal up all the energy-leaking areas in your house, install a highly efficient heating and ventilating system, new windows and a long list of other green improvements, will a future buyer pay you a premium price for your efforts?

A new study conducted by national appraisal experts says the answer most probably is yes — often tens of thousands of dollars more.

Funded by the D.C. Department of Energy and Environment and assisted by the nonprofit Institute for Market Transformation, the study employed a sophisticated “paired sale” analysis of homes sold in the District between February 2013 and June 2015.

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Appraisers matched individual “high-performance” energy and resource-conserving houses against multiple homes similar in type and location but without green improvements. They then calculated the extra dollar increments buyers were willing to pay for the green features and found they ranged from $10,343 to $53,000, or an average premium of 3.46 percent. Some premiums on individual houses ranged as high as 6 percent to 7.7 percent, and were enhanced when properties had photovoltaic solar arrays to slash electricity costs.

1 of 15 Full Screen Autoplay Close Skip Ad × The return on investment for going green View Photos Research shows installing high-energy-efficient systems into an old house can pay off big when it’s sold. Caption Research shows installing high-energy-efficient systems into an old house can pay off big when it’s sold. A study by the D.C. Department of Energy and Environment shows that buyers, such as Kevin Perry and his wife, Susanne Nobles, are willing to pay a premium for homes such as this 90-year-old Craftsman in Petworth that have been rehabbed to become highly energy efficient. Katherine Frey/The Washington Post Buy Photo Wait 1 second to continue.

According to the study, green features in renovations and new construction represent “a growing trend” in the District. As of September, there were 457 LEED-certified homes and 329 Energy Star homes as of August. LEED stands for Leadership in Energy and Environmental Design. LEED certification involves independent evaluation and verification that a building or an entire neighborhood meets high energy efficiency and resource conservation rating standards set by the U.S. Green Building Council. Energy Star certified homes must meet rigorous energy-savings standards prescribed by the Environmental Protection Agency.

Research published in 2015 documented strong demand for high-performance homes in the District: 18 percent of total residential sales and 29 percent of sales in the Friendship/Chevy Chase area (Zip code 20015) had one or more green features associated with the house. The high-performance homes used for paired sale analysis in the new study were scattered among neighborhoods in Northeast and Northwest and consisted of renovated older row houses, detached single-family homes and one high-rise condo unit. The median sale price was just over $693,000, though two homes sold below $500,000 and one went for $817,000.

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Kevin Perry and his wife, Susanne Nobles, purchased one of the houses in the study this past May. It’s a 90-plus-year-old Craftsman-style single-family home in Petworth and cost “in the mid-$700,000” range, he said. Like all the owners of houses that were included in the appraisal study, Perry had no idea that his house had been selected as one of the high-performance properties. The study’s appraisers, who obtained pricing and detailed transaction data from MRIS, the Washington region’s multiple-listing service, say they were prohibited by privacy rules from publicly disclosing information about the names or addresses of sellers or purchasers of any of the properties. Perry’s house was identified to me by an independent source.



The kitchen boasts certified environmentally friendly cabinets as well as Energy Star appliances. (Katherine Frey/The Washington Post)

Perry, who teaches Latin at the National Cathedral School, says he and his wife weren’t even shopping for a house with green features. “We were mainly just looking for something that we could afford and that was old and had a good location,” Perry told me. Though they visited and considered a number of competing, non-green but comparable houses in roughly the same price category, they ultimately found the case for the Petworth property compelling.

“We were really intrigued by the solar panels and with the possibility of savings on utilities,” Perry said. The closer they looked at the green features, the more they saw: energy-efficient new windows, a commercial-grade air exchanger to keep the interior air fresh and recirculated at all times, super-heavy insulation, a heat recapture system that employs waste hot water to save on the energy costs of heating water, to name just a few. The solar array was bigger than the average system used for houses of this size and promised to cut electricity bills drastically, which it has in the months since they moved in. “We really like it,” Perry said, but he conceded that he has not quite figured out the “net metering” system that adjusts their bills based on how much energy they have been contributing to Pepco.

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Even better, according to the study, Perry’s five-kilowatt photovoltaic equipment on the roof could be eligible for between five and eight Solar Renewable Energy Credits (SRECs) per year over a three-year contract. “Over this time period, the study reported, “the SRECs are valued at $7,500. Besides the energy produced by this [solar] system, the owner may receive income for three years.”

Tanya Topolewski, a D.C.-based green real estate developer who rehabilitated and sold two of the other houses appraisers selected for the study, says it is not surprising that Perry and his wife were not shopping specifically for a high-performance house. “The vast majority of people who come to see our houses are just interested in real estate,” she said in an interview. But once they see the advantages of buying a home with extraordinary energy efficiency, fresh air 24/7 and a positive environmental impact, “it’s kind of a no-brainer.” Topolewski says creating a truly high-performance home can be daunting, especially converting old, leaky rowhouses in the District. Both of her houses in the study are certified LEED Platinum, the highest rating possible.

But, she says, “there’s quite a bit of building science involved when you do a renovation from a low-performance home to a high-performance one. This has a name, actually — a deep energy retrofit” — and it is usually not a do-it-yourself type of project.

Cliff Majersik, executive director of the Institute for Market Transformation, noted that previous research studies on green price premiums in California and the Pacific Northwest have shown that high-performance houses and solar arrays command more at resale. Some premiums have ranged significantly higher than what was found in the D.C. study but did not use the same methodology, and some focused on newer houses, not necessarily retrofits of older homes.

Majersik says the D.C. study demonstrates that “buyers are willing to pay more” for high-performance features, even when they have not been emphasized by sales agents in marketing materials. One of the homes in the study was LEED certified, but the marketing information on the multiple listing service (MLS) provided only minimal information about the green features and failed to note the presence of a cost-saving solar array serving the condominium. It commanded a lower-than-average sales premium.

Sandra Adomatis, the Florida-based appraiser who was the principal author of the study, emphasized in an interview that for the value of green features to be properly understood — especially by mortgage lenders who lay out the cash for their financing — real estate agents will need to fully detail them in MLS listings. The Metropolitan Regional Information Systems (MRIS) has multiple searchable “green fields” on listing forms that allow agents to describe these features and for shoppers to ask to be shown houses that offer them.

Yet Adomatis found that listing descriptions of virtually all the high-performance homes in the study “rarely included more than a comment indicating the property has a green certification” such as LEED. But most home shoppers do not really know what LEED means, and agents only infrequently have the training needed to properly list and describe all the value-enhancing features in a high-performance home for sale.

What’s needed, Adomatis said, is for green certifications to be attached to MLS listings, and for sellers or their agents to show any home-energy rating-system report that may exist to prospective buyers. The study lists other recommendations for the local real estate community and can be found at www.imt.org/resources/detail/what-is-green-worth-unveiling-high-performance-home-premiums-in-washington .

Majersik says the bottom line for sellers of homes with green features is to promote them prominently in their marketing — “otherwise, they are leaving money on the table.”

The message to buyers: Even though you may pay a modest premium for a high-performance house, it will probably save you substantial money over a period of years in energy costs and almost certainly will be a healthier place to live.

Kenneth R. Harney writes “The Nation’s Housing” column.