The Green Real Estate Market Hits A Growth Spurt

In a matter of months, the conventional home market has gone from slow to “scary”, and the demand for Green and Energy Efficient homes is on the rise. For the first time in history, there are not enough homes to sell to consumers! What was once a great cause is now a great cause and a money making opportunity. In an article titled, “In a Down Housing Market, Green Demand Exceeds Supply”, found on the National Association of Home Builder’s (NAHB) website, this issue of supply and demand is addressed. According to the article, on April 16, 2007, participants in the NAHB teleconference addressed this “growth spurt” (in the Green Market) and acknowledged the fact that, “Green building and remodeling is one corner of the marketplace where demand is riding higher than the available supply”. The article further reports:

“Recent surveys by McGraw-Hill Construction among green home buyers and home owners who have undertaken remodeling jobs find a strong sentiment among consumers that there ‘are not enough green builders out there and demand is exceeding the homes available, with the shortfall particularly pronounced in the East’, said Harvey Bernstein, the company's Vice President of Industry Analytics, Alliances and Strategic Initiatives. Bernstein added that green housing is a differentiator from traditional homes and ‘something still in demand’ even during the current market correction.” (www.nahb.org, click here: http://www.nahb.org/news_details.aspx?newsID=4459)

It has become quite obvious that this period of “market correction” is providing traditional investors with opportunities to explore other options and to learn more about the Green Movement. Joe Keefe, President and CEO of Pax World Management Corp. and Pax World Funds, recently stated, “The Sustainability Revolution is coming. It will be felt in architecture and urban design, energy policy and tax policy, transportation and water use. Our task over the next 15 years is to make sure it is felt in investing as well, and that our industry plays a leading role in ushering in this great transformation.” (greenmoneyjournal.com, 15th Year Anniversary Issue).

Keefe lends more insight in the following commentary:

“Not that it's only about money. I am not saying that the only way to judge an investment approach is whether it produces higher returns, or that growth at any cost is a value, our civilization should continue to espouse. (Indeed, it will be our undoing unless we change course.) So, although it's essential for any investment approach to make a compelling financial case -- and sustainable investing (unlike SRI) is able to do this -- I think the concept of sustainability is actually much richer than this. In fact, I think the notion of sustainability implies a new conception of wealth, and may even offer a solution to the crisis of capitalism.

Why? Because it insists on an alignment of financial outcomes with environmental, social and governance outcomes -- not with "values" mind you, but with outcomes. The sustainability imperative requires that corporations and markets behave differently; it demands that wealth-creation strategies be made, well, sustainable -- that we no longer tolerate poverty and injustice and environmental degradation as the necessary byproducts of market capitalism.” (greenmoneyjournal.com, 15th Year Anniversary Issue).

Well said, Mr. Keefe.