A preliminary analysis of Chicago single-family homes suggests that real estate listings that include energy costs spend less time on the market and have a higher closing rate.
In July 2013, Chicago became the first municipality in the nation to include the disclosure of residential energy costs (gas and electric) when a home is listed for sale on the MLS. Real estate professionals can access an energy cost disclosure report for the property to provide to prospective buyers.
Elevate Energy reviewed 18,605 single-family homes listed between July 1, 2013 and Feb. 19, 2014 on Midwest Real Estate Data, the MLS serving Chicago. It found that 10 percent of the homes disclosed energy costs. Homes that did include disclosure of energy costs spent less time on the market, the analysis found.
For example, in Lakeview, homes that disclosed energy costs spent a median of 43 days on the market compared to a median of 63 days on the market for homes that did not disclose energy costs. Also, homes that disclosed energy costs had higher closing rates: 66 percent of homes that disclosed energy costs closed, compared to 53 percent for homes that did not disclose.
Of course, home owners whose property is more energy efficient are more likely to highlight energy cost savings, so the study’s findings may be due to an already-documented demand for greener homes.
“Home owners who invest to improve the energy efficiency of their homes should have a clear, consistent way to document those improvements when they opt to sell, and buyers deserve to be able to get a full picture of home ownership, which includes energy costs,” says Anne Evens, CEO of Elevate Energy.
“Our preliminary analysis of the MRED energy disclosure data is encouraging. We’ll continue to analyze the data over time to get a more complete understanding of how listings that disclose their energy costs may or may not set themselves apart.”