Green homes, which comprised 17% of the overall residential construction market in 2011, are expected to grow to between 29% and 38% of the market by 2016, according to a new study released last week at the International Builders’ Show.
This equates to a fivefold increase, from $17 billion in 2011 to between $87 and $114 billion in 2016, based on the five-year forecast for overall residential construction. According to the report by McGraw-Hill Construction, construction industry professionals report an even steeper increase in green home remodeling; 34% of remodelers expect to be doing mostly green work by 2016, a 150% increase over 2011 activity levels. Many home builders have shifted to the remodeling market due to the drastic drop in new-home construction, the study states. In fact, 62% of the builders who do both new and remodeling work verified that the economy has increased their renovation work.
In addition, the reported costs of building a green home have gone down significantly. Builders report that the extra expense of constructing a high-performance home is now 7%, as compared with 10% in 2008 and 11% in 2006.
The findings also reveal business benefits afforded by green building, such as a competitive marketing advantage: Forty-six percent of builders and remodelers find that building high-performance houses makes it easier to market themselves in a down economy, and 71% of firms dedicated to green home building report the same.
“This study demonstrates phenomenal growth in green building and indicates that we can expect even larger increases in the coming years,” said NAHB chairman Barry Rutenberg, a home builder from Gainesville, Fla. “In a sample of NAHB builder and remodeler members, nearly 90% reported building green at some level. This is a powerful testament to the importance of green home building—and transforms the way we think of homes overall.”
Learn more about markets featured in this article: Orlando, FL.