NOMA — Homes situated north of Montana Avenue fetch the highest prices in all of Santa Monica, but Josh Borris surprised even himself with a recent sale in the area.
The house, a 6,000-square-foot traditional style situated on the 700 block of 23rd Street, went for $4.98 million after 15 days on the market.
It blew Borris away.
“In this market, that is an amazing feat,” he said.
Borris owns Core Development Group, the company that helped build the house in 2008.
But while there are many large homes in NoMa, this one raced to a sale with an extra card up its sleeve.
The home was built with sustainability in mind, incorporating salvaged materials as well as thousands of dollars worth of solar panels, energy-efficient appliances and low-VOC paint.
It came crowned with a “tankless” water heater, that saves energy by heating water as it’s used rather than keeping it warm all day.
Preliminary studies coming out of the Pacific northwest show that eco-friendly, or “green,” homes fetch a premium on the open market.
According to one report by GreenWorks Realty and Development Group, a real estate agency in Seattle, homes that boasted an environmental certification like Built Green, Energy Star or the more popular Leadership in Energy and Environmental Design (LEED) sold for 9.2 percent more and in a quarter of the time of their conventional counterparts.
Local realtors are noticing the trend as well.
Simon Salloom, a real estate agent in Santa Monica with Partners Trust, agreed that homes that can boast any level of sustainability get snapped up quicker and for more than the average house.
“It’s just like in the mid-2000s with Viking ranges, people will pay more for homes with green features,” Salloom said.
It doesn’t always take much. Even putting the phrase “salvaged wood floors” in ad copy has become a must-do Salloom said.
“It adds commercial viability,” he added.
The value of sustainable homes comes from the amount of money a seller has to charge to make up for the added cost of green materials and appliances — estimated at 20 percent above and beyond a traditional house — which the buyer justifies with the amount of money they hope to save on utilities.
An added perk is a feeling of social conscientiousness, that the buyer is using their dollars wisely and in service of the planet.
But that leaves out one major category, said Mina Chow, a professor of architecture at USC and expert in green building and design.
“It’s trendy,” Chow said. “It’s the keeping up with the Jones’ syndrome.”
While return on investment and the life cycle cost of the building do play an important role, most American home buyers won’t stay in their house long enough to recoup the cost of the environmentally-friendly installations they include, Chow said.
Although companies that market solar power for homes often claim that the units pay for themselves within five to seven years, that’s often an over exaggeration.
“This is an argument that architects had when sustainability became a household word,” Chow said. “We had this problem that Americans never thought of a home as a European would. They think of the home staying in the family for generations.”
In that case, investing in a green home makes perfect sense.
Home buyers here that grasp onto environmentally-friendly buzzwords are often the same as those that go to Whole Foods, she said.
“They have the money, and they’re thinking about responsibility and the stewardship of the environment. They’re trying to do their part in protecting every aspect of the environment,” Chow said.
The new awareness of a residence’s impact on the environment has brought interesting twists to the market.
One client of Salloom’s required that she be able to install an electric car charger on a condominium she purchased.
“Yesterday, a client wanted a reusable rainwater capture system and solar panels on the roof of a townhouse,” Salloom said. “No one’s ever asked me that before.”
The trend is heartening to people like Brenden McEneaney, the green building program advisor with the Office of Sustainability and the Environment, but it could likely be done cheaper and still achieve the same goals.
There’s not a lot of research yet on the residential side, but LEED-certified commercial properties also tend to go for more, and the costs to certify a building don’t have to go as high as many people think, McEneaney said.
On a commercial building, getting a LEED Basic certification adds at most 2 percent to the cost of building.
“I agree that many would say it costs a lot more,” McEneaney said regarding perceptions about green building, “but I would argue that you can build a LEED building that doesn’t have to cost more than a regular home.”
Employing aspects of integrated design rather than slapping on expensive solar panels can be a big cost-saver, and certain green elements — like mechanical systems that reuse water for irrigation purposes — can be more cheaply replaced by drought-tolerant landscaping.
“Graywater is a great example in my mind of one of the things where I support it, but it’s expensive,” McEneaney said. “It’s more equipment and maintenance.”
Homeowners with questions and concerns about building green can always call the Office of Sustainability and the Environment for information and advice.
“There are inexpensive ways to do green, and expensive ways to do green,” McEneaney said. “I am sympathetic to those who want to do things the right way, and it’s tough to discern what’s the right way and what’s the most efficient way.”
ashley@www.smdp.com
