A Bit Less 'Green'

Posted by Dave Fratello on Thursday, May 13th, 2010 at 2:42pm.

Beginning last June, the Hill Section was graced with a new "green" home that was an absolute showplace.

645 9th (6br/6ba, 7750 sq. ft.) is a splendid Cape Cod, open, luxurious, beachy and full of extras. Touring the house, you could stop at each of several placards placed at chest height (or eye height, depending) describing the "green" materials or concepts embedded in that particular feature.

Yes, you could actually learn something just touring the home.

The listing was touted as MB's first LEED-certified green home, though it obviously wasn't the only one to lean green in recent years.

The question was, would buyers pay a premium for "green?"

If a Prius costs more than a Camry, "green" buyers are saying that it's worth it to them to pay a little extra to help the environment, even if the energy cost savings don't quite balance out.

645 9th began by pushing for a premium, asking more than $1,000/PSF with a start price of $7.950m. That's a Sand Section price.

Over 6 months, a million bucks came off. The list was $6.999m when a buyer came early this year.

Now we see that another million came off in the final deal. Closed price: $6.0m (via MLS).

There are precious few recent Hill Section sales of new homes to compare with here, but the final price, down $2m as it was from start, does still seem to reflect a premium. Whether it's for green-ness or just the sheer joy of the house is worth debating.

At $6.0m, the final PPSF, for instance, is $774/PSF. You'll see that's above most every pending or closed sale in the Hills on new construction:
  • In escrow is 617 6th at $4.8m and $837/PSF, but with room to move down quite a bit before they close it, so check that later. 
  • One of the utter deals of 2009 in MB, let alone the Hills, was 218 N. Dianthus (4br/4ba, 6100 sq. ft.) at $3.920m and $642/PSF. 
PPSF is not a great measure, but it's suggestive to see that 9th may have gotten a 20% premium (or more) by this standard – a bit more impressive since very large homes (7750 sq. ft. in this case) tend to have a lower PPSF.

That may be small comfort, though, to the builders, who paid $3.5m for the lot and obviously poured a ton of extras into this home, shooting for that elusive greenie with a "must have" attitude toward a big home in the Hill Section. Since some readers will do the math anyway, we'll note that the $2.5m balance between sale price and land acquisition allows for build costs just over $300/PSF – roughly average for a great house, not one with the "green" extras this home featured.

We'll say this one more time as we close, because it feels important: A home can be built very green with materials that are recycled or from renewables. You can install a grey water system to keep the lawn lush (and avoid restrictions on watering days!). Maybe solar panels will operate your mega home theater.

All that's great, but a 7750 sq. ft. home just isn't going to be "green" in operations day to day. Too much space to heat or cool. Too many lights (whatever type) to have on at once. And so on.

If the wealthy tree-hugging community largely passed on 9th, that's partly why. Green involves some downsizing and smart choices, not just a good selection of building materials.
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