How the single-family residence housing market capitalizes green property upgraded features: evidence from city of Austin
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 30 October 2023
Abstract
Purpose
By comparing regression models, this study aims to analyze the added home value of green sustainability features and green efficiency characteristics, rather than green certifications, in the city of Austin.
Design/methodology/approach
The adoption of home green energy efficiency upgrades has emerged as a new trend in the real estate industry, offering several benefits to builders and home buyers. These include tax reductions, health improvements and energy savings. Previous studies have shown that energy-certified single-family homes command a premium in the marketplace. However, the literature is limited in its analysis of the effects of green upgrades and certification on different types of single-family homes. To address this gap, this research collected data from 21,292 multiple listing services (MLS) closed home-selling listings in Austin, Texas, over a period of 35 months.
Findings
The analysis results showed that green efficiency features could generally increase single-family housing prices by 11.9%, whereas green sustainability upgrades can potentially bring a 11.7% higher selling price. Although green housing certification did not have significant effects on most housing groups, it did increase closing prices by 13.2% for single-family residences sold at the medium price range, which is higher than the impacts from simply listing the green features on MLS.
Originality/value
The study contributes to the body of knowledge by examining the market value of broadly defined energy efficiency and sustainability features in the residential housing market. The findings can help policymakers, brokerage firms, home builders and owners adjust their policies and strategies related to single-family home sales and mortgage approvals. The research also highlights the potential benefits of capitalizing on green housing features other than certifications.
Keywords
Acknowledgements
This research was supported by the NSF Grants (2043060, 2133302, 1952193, 2125858, 2236305) USDOT consortium of Cooperative Mobility for Competitive Megaregions, Good System at the University of Texas at Austin and The Mitre Corporation. The authors would also like to acknowledge the funding support from NSF, USDOT, UT Good Systems and MITRE.
The authors thank REAL International Realty for providing access to the MLS data. The views expressed are those of the authors and do not necessarily reflect the position of REAL International Realty or its management. The authors affirm that they have no material financial interests related to this research to disclose.
Citation
Jiao, J., Wu, X., Chen, Y. and Farahi, A. (2023), "How the single-family residence housing market capitalizes green property upgraded features: evidence from city of Austin", International Journal of Housing Markets and Analysis, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJHMA-07-2023-0095
Publisher
:Emerald Publishing Limited
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