Analysis of Pricing Variation in Aesthetic and Sustainable Features

Abstract

In today’s market there are two major categories of home features that home buyers choose from: sustainable or aesthetic. In a residential housing context, sustainable home features are considered as those that reduce the energy consumption of the home while aesthetic home features do not have an effect on energy consumption. While there have been several studies conducted on appraising sustainable or aesthetic features alone this research aims to directly compare the two through a sales comparison approach of Taylor Morrison and Meritage Homes new construction comparable sales homes in the Queen Creek subdivision of Victoria Estates. A sales comparison approach enables each feature type to be analyzed individually for how it affects the pricing variation of a home with its implementation through comparing comparable sales homes to a subject home without the feature type that is being valued. Through this methodology the pricing variation of homes with the inclusion of sustainable features alone was found to consist of an average pricing increase of $39,117 for Meritage homes and a $17,861 increase for Taylor Morrison homes in comparison to aesthetic and sustainable features at an average $47,817 increase for Meritage Homes and $26,561 for Taylor Morrison homes. This research lends itself to providing prospective home buyers with guides on what home features will actively make their homes investments such as MERV 8 filters, a HERS rating of 58, among other findings. In addition, the research highlights which standard, included sustainable and aesthetic features increase the pricing variation of a home from each homebuilder and should be prioritized in being offered as included based on their investment value to home buyers.