Page 21 - Green Builder Nov-Dec 2021 Issue

CREDIT: ISTOCK/ MIKOLETTE BUILDING 2022
THE STATE OF
SUSTAINABLE

a longer-term approach, forecasting an annual
rate of 5.7 percent through 2025. Eco-friendly improvements homeowners are
All of those projections are well below the list
price increases of 2021, a sign that the market planning to make in the next year
may finally be moving, as Zillow puts it, “from
white hot to just red hot.”
Still, housing prices are expected to continue SOLAR PANELS 14%
to rise in the coming year. The biggest reason?
The same as in 2021: low inventory. Analysts at SMART LIGHTING TO LOWER 12%
Freddie Mac say there is still a 4 million home ELECTRICTIY USE
shortage heading into 2022, a guarantee that ECO-FRIENDLY APPLIANCES 11%
things are not going to level off significantly
any time soon.
A potential glass of water on the hot housing START A COMPOST HEAP 11%
market: higher interest rates. The average rate
stayed at about 3 percent throughout the year. SOLAR WATER HEATING 10%
This is expected to increase, perhaps reaching
Fannie Mae’s estimate of 4 percent by the end HEAT PUMP 10%
of 2022. This could price some potential buy-
ers out of the market, the government lender DOUBLE-GLAZING 8%
notes. Improvement minded. Two out
Brian Bernard, director of industrial CAVITY WALL INSULATION of every five homeowners plan to
equity research for financial services firm 7% undertake some type of
Morningstar, agrees. But it won’t be enough eco-friendly home remodeling
to slow the housing market on its own. “In our SET-UP ELECTRIC CARPORT 7% project within the next year, one
view, there is still plenty of pent-up demand that is likely to be energy-saving,
from households that can shoulder higher, but BIOMASS BOILER 7% according to a COGNITION survey.
still palatable, mortgage rates,” Bernard says.
A second, possible deterrent: Financial
necessity. Homeowners who are on the verge of foreclosure— COGNITION predicted 2021 sin-
largely due to pandemic-induced financial problems—will cre- gle-family housing starts totaling “The silver lining for
ate underpriced inventory. This won’t be enough to pull home 1.134 million, right in line with the
values down overall—foreclosures are expected to make up Mortgage Bankers Association’s aspiring homeowners is
only 5.4 percent of available inventory in 2022—but it will numbers and an arm’s length from that the worst of the
give buyers a bit more selection at slightly better cost, Fannie Morningstar, at 1.115 million, and
Mae notes. real estate firm Windmere Eco- housing supply crunch
Overall, homeowners listing their houses will make up about nomics at 1.117 million.
39.7 percent of the available inventory in 2022, according to Zil- While 2021 was “another strong looks to finally be behind
low. It’s the largest source of inventory, but not as influential as year” for single-family construc- us, and most experts
new housing, analysts note. tion, it’s unreasonable to expect
more of the same in 2022 and believe that the past
NEW HOME CONSTRUCTION: KING OF MARKET GROWTH beyond, Bernard notes. “Construc-
Although it’s the second-largest generator of housing inven- tion growth will moderate,” he year’s rapid price boil has
tory—accounting for 22.5 percent of all sales, about 17.2 percent says. “Homebuilders will boost begun to simmer down.”
behind existing homes—nothing pushes the market ahead like production to address the under-
new construction, according to Zillow. “New home construction supply of single-family homes, TERRY LOEBS, FOUNDER, PULSENOMICS
has been weighed down in 2021, due to shortages of key building [but] we don’t think the home-
materials,” says Cory Hopkins, manager of economists at Zillow. building industry has the capacity
“But despite the setbacks, [construction] has largely remained for housing starts to sustain the levels seen in the mid-2000s.”
above pre-pandemic levels.” Morningstar’s findings are echoed by COGNITION. The market

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