How Green Buildings Will Change Real Estate Expectations

Few trends are as impactful across all industries as the growing need for sustainability. One of the biggest changes involves the focus on sustainable buildings.

Consumers everywhere value eco-friendly products and services more than ever, and government initiatives encourage them. Once a niche segment, green real estate could dominate the market in the near future.

The real estate industry is ripe for change when it comes to sustainability. Buildings account for 39% of total energy consumption in the United States. Eco-friendly technologies are also more affordable than ever, so green building is no longer inaccessible.

From sustainable building materials to renewable energy, green building is shaking up the real estate market. Here’s a closer look at how it will change the face of the industry.

Lower Lifetime Ownership Costs

One of the most impactful changes this green trend will have on real estate is declining ownership costs. Not long ago, sustainability was prohibitively expensive, but things have changed. Wind and solar power are now cheaper than fossil fuels in most of the world.

Buildings with built-in solar panels or wind turbines will provide residents with more affordable energy. These features may make some properties more expensive upfront, but lifetime ownership costs will be lower. This affordability will attract new homeowners, leading to more sales and making housing more accessible.

Green building materials can further lower costs by making buildings more energy-efficient. Traditional fiberglass insulation allows 30% of heat and air conditioning to leak out, but foam insulation is far more efficient. These materials keep more air in, lowering heating and cooling costs and making homes even more affordable.

More Independence

Another advantage of built-in renewable energy generation (such as geothermal energy) is that it gives property owners more independence. Solar panels and wind turbines allow residents to get some or all their power from the environment, not utility companies. In addition to the savings this entails, it gives building owners freedom from the power company.

A recent survey shows that just 33% of American consumers trust their utility companies to offer fair rates and services. That means two-thirds of Americans feel suspicious over whether these organizations have their best interest at heart. Green real estate prevents them from supporting businesses they don’t trust.

When building owners don’t have to rely on utility companies, they can avoid contracts and other limits. Residents will have more flexibility, which is especially important in commercial buildings since businesses likely have higher ambitions than average homeowners. Utility companies limit expansion, but renewables remove those limits.

Higher Diversity of Materials

Most traditional buildings stick to just a few materials like concrete, wood, brick and steel. The sustainable real estate movement opens up a world of new green building materials that buyers can choose from. Many of these also come with benefits that go beyond eco-friendliness.

Some waxes, for example, have natural hydrophobic properties, making walls and ceilings more resistant to water damage. Similarly, wool insulation is naturally flame-resistant and offers similar if not higher thermal properties to traditional insulation. Many sustainable building materials are synthetic, too, so new options emerge all the time.

High-tech materials are a blossoming and promising part of the industry. For example, smart glass changes its thermal properties based on heating and cooling trends in the building. With such an abundance of different materials, green homes can appeal to far more market segments, meeting a diverse public’s diverse needs.

Stronger Emphasis on Green Certifications

Green certifications will become more valuable to consumers. Real estate agents can pursue these benchmarks to make their properties more appealing to potential buyers. Before long, these certifications will be so vital they’ll be less of a competitive edge and more of a necessity.

People want sustainability, even if they have to pay more for it. More than 50% of Gen Z consumers, who will make up an increasingly high percentage of homebuyers, will pay more for sustainable goods.

Green certifications let real estate agents prove to prospective buyers that they’d be purchasing a sustainable home. The rising demand for sustainability will likely also lead to greenwashing and false promises too, making these certifications more valuable. As these trends continue, far more buildings will pursue these benchmarks to meet market demands.

New Construction Opportunities

As the green real estate market continues to soar, construction companies will have an abundance of new opportunities. While homeowners can retrofit existing buildings with sustainable technologies and materials, an entirely green home typically requires a whole new structure. Rising demand for green houses will give construction firms plenty of potential projects.

The U.S. housing market is already worth $33 trillion, and the demand for green homes will push it further. Since retrofitting can only go so far, real estate agents will have to turn to making and selling new buildings. The green revolution could lead to a considerable uptick in demand for construction as a result.

Demand for new construction projects will shift. Construction firms that embrace green building techniques and sustainable certifications will be far more valuable in the coming years. As the real estate market becomes greener, so too will construction.

Green Real Estate Is the Future

Not long ago, sustainable real estate was an expensive and niche market segment, but it’s becoming the norm. Environmental issues are more prominent than ever, driving consumers to demand sustainability in all areas of their lives. This trend shows no signs of slowing, either, so it will transform industries going forward.

Green real estate helps the industry become more eco-friendly and makes it more profitable. Sustainability is changing the face of the sector, making it more appealing to young consumers. When construction and real estate go green, everyone involved benefits, and this mutual growth is driving change in the industry.