Energy Efficiency and Real Estate in Bozeman and Beyond
According
to a study conducted by the University of South Carolina Center for
Community Capital, borrowers with energy-efficient homes are
significantly less likely do default. In fact, they are 32% less likely.
The study looked at 71,000 homes and their corollary loans,
neighborhood characteristics, and energy rating.
Borrowers with energy-efficient homes are significantly less likely to default, according to a study by the University of South Carolina Center for Community Capital.
Funded
by the Institute for Market Transformation (IMT), the study found that
default risks are on average 32 percent lower for borrowers with
energy-efficient homes that met "Energy Star" guidelines.
The
study examined 71,000 homes and accounted for loan, household and
neighborhood characteristics, IMT said in a blog post. Homes earn Energy Star status by meeting guidelines set by the U.S. Environmental Protection Agency.
IMT
said that the results of the study argue that, "the lower risks
associated with energy efficiency should be taken into consideration
when underwriting mortgages."
A
fact sheet on the study adds: "The findings have significant policy
implications: Lenders might allow for lower risk premiums that are
associated with interest rates, a more flexible credit profile, or a
higher debt-to-income ratio for people buying or refinancing efficient
homes. This would increase the affordability of energy-efficient homes
among many borrowers, especially in high-cost areas."
This
study does caution that there is another message that comes from the
results. Homeowners who have invested in energy-saving upgrades may have
some trouble getting the value back if the upgrades are not recognized
by buyers, appraisers, and lenders. The category of ‘green fields’ is
emerging in the real estate world to specify a home’s green features.
This should allow for a heightened awareness of the green upgrades, but
how it will be taken by the market is yet to be seen. (http://www.inman.com/news/2013/03/22/borrowers-with-energy-efficient-homes-less-likely-default-study)
Here
in Bozeman, the ‘green’ movement that is trending throughout the
country has taken roots and blossomed. In fact, the Bozeman, although
the wolf wars we have experienced here have put a more negative
conservationist spin on opinion, has allocated hundreds of jobs and
$100K is salaries to the environmental sector. At least 13 organizations
headquartered in Bozeman, Livingston, West Yellowstone and Gardiner
that filed for tax-exempt status as land or wildlife, conservation or
preservation organizations in 2009 reported employing 231 full-time,
part-time and seasonal employees across the region and paying out a
total of $8.4 million in salaries.
(http://www.bozemandailychronicle.com/special_reports/greentown/)
These two green movements, national and local, will be compelling to keep an eye on an we enter a fresh spring season.
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