“Fix it with Green:” The Valuation Impact of Green Retrofits on Residential Transaction Price

There is a modest amount of research on the valuation impact of green housing features, but research on renovations or remodeling, which include green features called “green retrofits,” cannot be found. The analysis in this paper uses consistent controls and methods to investigate the valuation implication of green retrofits on residential transaction prices. We find that renovated properties in the sample of residential transaction prices are sold at price levels 5.8% higher on average than properties that are not renovated, all else equal. However, green retrofits sell for 9.9% higher on average than non-renovated properties, and green retrofits sell for about 12.7% higher on average than non-green renovated properties. It appears that investment in residential green building features is capitalized in housing prices. We find that green retrofitted properties spend fewer days on the market compared to other transactions.