Portland Area Real Estate Appraisal Discussion

Appraisal of Green Homes
November 25th, 2014 12:25 PM

Sustainable Homes

Another appraiser in my office and I just completed three days of green appraiser training provided by Earth Advantage, a Portland, Oregon nonprofit that encourages more sustainable building practices through home certifications, education, and other involvement.  This is a fantastic course package that gives appraisers an understanding of the differences commonly found in green construction techniques.  When finished with the training, appraisers know how to identify green construction techniques, and thereby measure the market reaction to those differences — and I am not just talking about bracketing a color.

The concept of building green comes from the goal to be more sustainable in construction and living.  The pursuit of green building practices results in carefully engineered high performance homes with integrated and interacting systems that make them more comfortable, durable, and efficient.  As a result, green homes sell for a premium in some markets.  Green building practices include exceeding local building codes under the Five Pillars of Green Construction as follows:

  1. Site Development includes convenient locations that require less vehicle use, low impact site development that values plant retention and controls water runoff, and the harnessing of natural light, solar energy, and air movement to maximize performance of all systems.  An example of a green site would be to select a lot near public transportation that is also south facing and can benefit from passive solar heating.


  2. Water Efficiency through controlling indoor and outdoor water consumption and by managing the water that is available naturally onsite.  An example of water efficiency is collecting runoff water from downspouts for use in irrigation.


  3. Energy Efficiency using more efficient appliances, mechanical systems, and (most importantly) a building envelope that is sealed and insulated for maximum comfort with minimal heating or cooling cost.  An example is that many green homes can downsize heating systems to units that would typically be used in smaller homes, thereby helping to offset some of the other increased costs of green construction.

  4. Materials Selection includes materials made from renewable resources, are locally produced, and have a long service life.  When local or natural materials are not feasible or acceptable in the market, an effort is made to use quality materials that will last and avoid repeated replacement waste over the life of the home.  An example of a materials selection compromise that a green builder might make is a foam panel that might not be locally produced, but its light weight makes shipping easy, its strength permits less lumber use, and it will last the life the home.

  5. Health and Indoor Air Quality includes proper ventilation and air filtration.  For example, because green homes are so airtight, indoor air may be better controlled by introducing fresh or filtered air from outside without the tendency to pull air from dirty crawlspaces or attics as in typical code built homes.

Pillars of Green Construction

Since the Five Pillars of Green Construction are difficult for buyers to observe prior to purchase and because green construction offers benefits to the owner (and to society in general) throughout ownership, different rating and certification programs exist to help buyers identify and compare green homes in the market.  In Portland, Oregon, the most common certification programs are Energy Star (dealing with only energy), Earth Advantage, and LEED.  Builders that join these programs and who document building components and receive independent inspections are rewarded with government incentives, a third-party rating, and market differentiation.  The buyers of certified green homes know (in advance) the performance of their home in terms of its effect on the environment and its energy cost in relation to building code minimums.  Appraisers who assess green certified homes can better quantify benefits that might affect marketability and make comparisons to other certified homes.

Did I leave anything out or do you want to join in the conversation?  Let me know in the comments below.

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Thanks for reading,


There was a sustainable green project built in the Sacramento area, but it folded during the housing bust. This is definitely something that is going to be important for appraisers to understand in the future.

Posted by Ryan Lundquist on November 25th, 2014 1:53 PM
Thank you, that was very interesting. Green homes are the way of the future for sure. A Quality Appraisal continues to lead the pack in the Portland area.

Posted by Lucas on November 25th, 2014 2:04 PM
Thank you Ryan and Luke for your input. Ryan, it sounds like the project in Sacramento did not have sufficient value in the market to cover the costs of the development. It was probably more green on the green scale than most green homes that are being built in Oregon. Most homes in Oregon with green features are not close to sustainable and will never be sustainable.

Posted by Gary Kristensen on November 25th, 2014 2:18 PM
As usual, Gary stays ahead of the curve! I just got off of the phone with Gary talking appraisal stuff (I own an appraisal company in Sacramento). Gary knows his stuff! A Quality Appraisal uses the best appraisers in Portland and the surrounding areas. I am not just saying that.....I know it. The time and expertise that goes into the appraisals that come out of A Quality are thorough and accurate. If you are in Portland and need a home appraisal, these are your guys!

Posted by JeffHamric on November 25th, 2014 2:41 PM
Thank you very much for your kind support Jeff.

Posted by Gary Kristensen on November 25th, 2014 2:46 PM
Thank you Gary. Very interesting topic.

Posted by Frank Greenburch on November 25th, 2014 4:00 PM
You're welcome Frank. It is my pleasure. Stay tuned for more Portland area real estate appraiser observations.

Posted by Gary Kristensen on November 25th, 2014 6:00 PM
Gary, I took this course in my state of Alabama as well. In fact it was sponsored by a state agency and was free. Appraisers should check into this in their state and see if there state is sponsoring a class as well. It was a very good class and was taught by a practicing appraiser so he taught it from our perspective.

Posted by Tom Horn on November 26th, 2014 10:33 AM
Thank you for your comment Tom. I wonder if you had the same instructor that we had.

Posted by Gary Kristensen on November 26th, 2014 10:37 AM
Great post from A Quality Appraisal. These are important details that some homeowners don't know to look for. Thank you for sharing

Posted by Mike Brandlin on December 2nd, 2014 10:57 AM
You're welcome Mike. I think the homeowners are the ones getting educated by the sellers of new homes about green construction and it is sometimes the appraisers are not getting all of the information.

Posted by Gary Kristensen on December 2nd, 2014 11:01 AM


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