California Homebuyers Find More Value in Energy Efficient Homes

More homebuyers are opting for energy-efficient homes. Aside from increased resale value and lower risk of default, energy-efficient homes can also save homebuyers money on utility bills, weatherproofing, and other costs. Listed below are five benefits of energy-efficient homes that Californians can experience. Read on to learn how energy-efficient homes benefit your home.

Increased resale value

Investing in an energy-efficient home can add considerable value to your home. Currently, 63 percent of realtors say that promoting energy efficiency in listings is valuable. However, if you are considering selling your home, you should consider making a few upgrades to your home before you sell. Some upgrades will increase your home’s resale value, while others may not.

Several studies have demonstrated that homeowners who invest in energy-efficient home improvements experience a higher resale value. These studies often find that energy-efficient homes increase property values by two to nine percent. Premiums vary depending on the certification and local market. However, a recent study of 66,000 San Antonio homes found that green designation and energy-efficient features increased resale values by about six percent.

Lower risk of default

The state of California has lowered the risk of default by nearly half since the Millennium Boom, according to the latest available statistics. Home prices in California have risen rapidly, coinciding with the Federal Reserve’s drop in interest rates. This drop was intended to encourage borrowing during the recession that will last until the end of 2020, but the rapid appreciation has now come to an end. As unemployment continues to rise, support for home values is ebbing, but jobs are far from recovery.

While the ability-to-repay rule has become a standard of lending, there are other factors that may reduce the risk of default. Creating a post-purchase financial buffer is essential for borrowers to avoid negative income shocks. According to the study, those with a post-purchase financial buffer are more likely to avoid default. The total DTI measurement at origination may be predictive, but heterogeneity makes it difficult to find a single level of affordability.

Savings on utility bills

Savings on utility bills can make a difference for homeowners. The California Public Utilities Commission has resources available for homeowners, including energy-saving tips and discount programs. Homeowners can also access free home improvement programs run by nonprofit organizations such as Rebuilding Together Sacramento. These programs, such as the Safe at Home Program, provide low-cost safety and accessibility modifications and the Home Energy Conservation Program provides minor energy-saving measures. These simple improvements can reduce utility costs by up to 10 percent. Minor energy-saving measures include installing LED light bulbs, weather stripping, and caulking.

Savings on weatherproofing

Weatherproofing a home is an important step in increasing energy efficiency and lowering your monthly bills. It’s also important to protect the interior of your home from the frigid air. Even if you don’t live in a cold climate, reducing drafts around windows and doors will help you save money on heating and cooling costs. There are many cost-effective weatherproofing measures, from adding door sweeps to sealing up windows. While these weatherproofing measures may seem expensive, they’re inexpensive and can make a huge difference in improving your home’s energy efficiency and environmental footprint.

Cost of upgrades

There are a lot of questions about the cost of energy-efficient home upgrades in California. First, they are unclear as to what the government intends to accomplish with the energy efficiency requirements. The state also has an expensive real estate market and struggles to produce affordable housing. The cost of a home in California is about twice as high as the national average, so these new energy standards will likely increase home costs. According to the Legislative Analyst’s Office, officials and builders insist that the upgrades will save the state and its citizens money while increasing the resale value of a home.

The Energy Upgrade California program offers rebates for homeowners who make certain upgrades to their homes. Homeowners who take advantage of these incentives may find their closing costs reduced. Additionally, the state could offer creative financial incentives. One such incentive would be reducing closing costs for homeowners who make energy improvements within a year of purchasing a home. Research has shown that homeowners who make energy efficiency improvements in their homes are more likely to enjoy lower energy bills.

By HomeLight Homes