It’s a bittersweet time for the owners of the 100K House project homes. Both homes are being put back on the market for the first time since they were built as both families move on to the next phase in their journey through life.

My wife, Courtney, and I are expecting our second child (Mr. Ryker J. Ludeman) in the month of May and desire a division of space in our next house to minimize night time crying battles as much as possible.  Our neighbors in the 120K are moving into a rental as they contemplate a move to the West Coast as they are both finishing up their Masters Degrees in Sustainability. While we’d both love to own these homes forever, we just can’t make it work at this time in our lives.

Yes, many of you commented that a larger family could not work in the 100K. You are right to a degree. We could make it work for a year or so, but there’s something about not being able to close a door to our bedroom for a bit of privacy as the boys get older that just doesn’t sit quite right with us. This house was never intended for a family of four. It has been perfect for us to date and hopefully it will be perfect for the next owner. We think it will.

The 100K will be listed next week most likely for $299K. The 120K is already listed for $319K. The 120K is the one with the orange door on the corner if you are driving by. It has more windows, is 2′ wider than the 100K, has an awesomely wide floating staircase, has a ridiculously huge backyard (by Philly standards) and a fully custom kitchen by Pappajohn Woodworking. This is why it is listed for slightly more than ours on the inside with the green door.

While you’ve come to know these homes well here, some new folks may not know everything about them. They aren’t the largest homes in Philly, but we think they may be the most heavily decorated homes in the city in some key categories. Some of their accolades are listed below:

1. LEED Platinum Certified by the USGBC
2. Energy Star Certified and 50% more efficient than a new code home (utilities bills less than $100 per month on average)
3. LEED for Homes Project of the Year in 2010 awarded by the USGBC (this is a bid deal they tell us)
4. AIA Philadelphia Award Winner (ISA tells us this is a big deal)
5. AIA Pennsylvania Award Winner (ISA tells us this is a bigger deal)
6. National AIA Housing Award
7. Multiple magazine features including Metropolis Mag, Dwell Mag, GRID and GOOD Mag
8. Newsprint mentions including the Philadelphia Inquirer, Philadelphia Business Journal and many more
9. Numerous articles and posts on the top green building blogs and architecture sites around the world

Here are some of the better pics and videos on the project to complete this post. While we are both sad to leave the project, we are also excited to see who the new owners will be and how they will live in the homes.

100K House Postgreen Homes Flickr Set

-- SimpleFlickr Content --
(Please visit the original post page to view the details.)

Inspired by Design: New Gen, Next Gen by Babelgum

I know I owe everyone a redesign of our Performance Sticker and some talk of the various available home energy use metrics, but that is tall order, and I have been a bit short on time. So, instead I’m going to buy a little more time with a discussion of one of the lesser points that arose in the Sticker post comments . . . how involved does government get in the process of making performance stickers a requirement of the building industry?

Comparative energy use performance information has long been a staple of the auto industry. EPA estimates, for better or worse, have given us a means of comparing the fuel use of cars. They also give those of us obsessed with energy efficiency an open invitation to a dark pit of depression when watching car commercials. Seriously, they’re bragging about 24mpg? Pass me a pint of ice cream, a bottle of rye and my blanky . . . isn’t that how everyone deals with depression?

This testing is, as I understand it, carried out by the car manufacturers and reported to the EPA. The EPA then audits 15% or so of them to keep the manufacturers relatively honest. These tests are only performed on new cars and certain large models are exempt. For instance, GM is not required to provide Hummer data to the EPA. Presumably the 10mpg results would just be too embarrassing for everyone.

Car manufacturers test only a single representative of a given model for mileage as each is expected to be nearly identical. While the results are not always particularly accurate when compared with real life performance, they do provide a fairly reasonable means of comparing different models. For instance, I may not know what the exact, real-life mileage of my Accord will be, but I can be fairly certain it is going to be  15 to 20 mpg better than what I would get from that Dodge Ram.

All of this originated with a “Gas Guzzler” tax intended to encourage the production and purchase of more efficient private automobiles. Larger vehicles like trucks and vans were left out because they were seldom owned for private use. The law assumed if you had a truck or van, you had a legitimate use for it. How surprised those lawmakers would be today when a 6,000 lb truck is considered a perfectly reasonable vehicle for running your 80lb child to soccer practice.

Legally we can't call this a "Gas Guzzler"

So, how might this system apply to homes? Basically, we have a government mandated test for new products tied to a tax. Could that work in the housing market? With what changes? Believe it or not, I have an opinion.

Let’s start with the idea of a tax. We have an established habit of taxing things that have a negative effect on individuals and/or those around them. We tax liquor, tobacco, gas guzzlers, etc. We also tend to be more comfortable with taxes on non-necessities. At a NY grocery store there isn’t a tax on milk, but you’ll be paying one for the cookies to go with it. I think we can agree that low-performance homes fall in one if not both of these categories. So, a tax would not be outside  our historical inclination.

Let’s say we impose a graduated tax based on the projected energy use of new buildings. This tax would be levied either on new construction builders or buyers. I would argue builders as the buyers are going to be paying it either way. Leaving the exact metric out of this for the moment, let’s imagine that we base this tax on the results of some basic standard test and analysis. Results of this test must be sent to the appropriate agency. The agency would then levy the tax and provide an official document to be used in the sale or resale of the home in question.

There are, of course, some challenges. In this plan, each individual home would need to be analyzed. Solar orientation is the biggest reason for this individual attention, though variation in construction quality can certainly not be discounted. This could be conceived as an unreasonable burden on the builder. However, one could also argue that builders have been unreasonably unburdened in this respect for too long. Home performance, unlike performance in nearly every other consumer product, has remained relatively unchanged for a long, long time. This burden could also be reduced by providing a baseline rating based on code requirements. Homes would receive this rating without the necessity for more elaborate testing and be taxed accordingly. Builders would still be required to share the rating with potential buyers.

Another challenge could be oversight. If left to their own devices there is little doubt that some builders would be less than honest in reporting certain specifications. Insulation values, for instance, are an excellent opportunity for subterfuge. The oversight agency would have trouble auditing any of the reported homes for  those things, like insulation, which are difficult to inspect once a home is complete. This could be solved by third party inspection and oversight, but again we start to see the system become cumbersome.

A little drywall and this looks perfectly fine.

Lastly, energy use in a home is difficult to predict as so much relies on the habits of the homeowner. Any predicted usage is likely to be way off. However, this is a similar problem in our car example and rather than dissuade universal enforced use of some sort of metric, this unpredictability of behavior encourages it. The more universal the adoption of a metric like this, the more useful it is. This is because such metrics only provide truly useful information in comparison. Sure, the family that leaves the heat set to 85 and doesn’t believe in an off switch is going to use far more energy than the amount on their home’s  performance sticker. However, they can be reasonably sure that they would be using even more energy if they had bought the home with the lower performance rating.

So, to make a long post short, I propose a required analysis provided by a third party for all new homes. This would likely include a blower door test and a detailed analysis of all specs (orientation, insulation, mechanicals, etc.) including an inspection. In a perfect world, this test could be part of the municipal permitting process with the tax revenue from inefficient homes providing the necessary funding. The result would be an easy to understand comparative metric that would inform buyers and determine the gas guzzler style tax on the property. Of course, there is nothing perfect about this world, and my idea is, without a doubt, too simple to work.

To answer a valid concern in the comments of the original performance sticker post, I don’t think a program like this should be mandatory for older homes, but it doesn’t seem unreasonable to expect some required energy oversight for new or fully rehabbed houses. Older homes could choose to use the system as it becomes something buyers expect to see, but as was mentioned in the comments, there is certainly no need to waste money  to tell me a 100 year old Philly row home is inefficient. I expect it’s use in older homes to become a voluntary but eventually expected practice.

Well, I appear to have used this blog post to demonstrate something of the nature of inefficiency. My apologies. It is as Mark Twain once said, “I didn’t have time to write a short letter, so I wrote a long one instead.”

If you made it through, tell me what you think. Should we mandate the use of a particular metric to value the energy performance of new homes? Does an accompanying tax for poorly performing homes make sense? What other strategies are there for insuring consistent use of a single standard?

Use the comments to provide your own insights or to chastise me for my long, lazy and confusing writing.

We have talked about simple, mileage-style window stickers for homes before, but for some reason all that talk never led to action. We never actually created one for our own homes. Well, it’s time that oversight was addressed.

I put together a draft version of a window sticker based loosely on the specs from the recent Skinny Project. This is intended to be displayed in the windows of our homes as they are being built. Hopefully, combined with some of our other marketing tools, these signs will help teach people about the most basic differences between our homes and the rest of the market.

The sticker is based largely on the HERS (Home Energy Rating System) Index which provides a means of comparing relative home performance and offers an estimation of energy bills. The numbers presented are obviously just rough estimates subject to the actual behavior of the occupants, but I think they could have value in a comparative environment. Since these numbers are based on a third party standard, they should provide a useful reference when looking at performance across a variety of different homes.

I tried to keep the sticker relatively simple and display the most useful information as prominently as possible. Energy bills get prime placement with the HERS scale coming in second. I also used a bit of space to provide key specs related to performance. The bottom leaves a room for a disclaimer and logos for LEED and Energy Star. The numbers and specs above are just for demonstration purposes, but we hope to give this sticker an actual first run in the upcoming Avant Garage project.

So, what do you think? Could a sticker like this provide a useful resource to potential home buyers? Am I missing any key information? Is the effectiveness of this sign limited by the fact that no other homes will be sporting it?

Let’s talk it over in the comments.

Most of us have probably heard the term “rental grade” in reference to the finishes in an apartment or rental house. Finishes referred to in this way are usually chosen largely for low cost and/or high durability. Things like occupant health or design aesthetic tend to be secondary at best in a “rental grade” unit. This marginalization of the more complex needs of the occupant (beyond simple shelter) is usually carried over into the actual structure of the house as well. Many rental units feature low insulation, sub-par windows, cheap mechanical systems and little to no attention to air sealing. They are inefficient which means they are expensive to the occupant and costly to the environment.

Over 30% of our homes in the US are occupied by renters. This number is likely even higher in major cities. Some of these renters have plenty of choice in the market (from high rise condos that haven’t sold to converted warehouse lofts), but even these privileged renters have very limited options when it comes to performance. For the majority of  less well-funded renters the options are even slimmer. Sure, there are still cool warehouse conversions and old row homes, but if you are hoping for something healthy and efficient, you are likely out of luck. It is also tough to find modern architectural design in anything but the most expensive buildings.

Of course, there is a reason for this, particularly in Philadelphia where we have one of the worst build cost to rental rate ratios in the country. Rental grade is inexpensive. It is cheaper and easier to build drafty, under-insulated units. Material costs are lower if one is unconcerned about air quality. The margins are tight in the Philadelphia rental market, and often, to give people the space they want at a price they can afford, one has to cut corners.

This is a contest where one wants to avoid the top five.

So, how do we upgrade rental grade? How do we improve performance, design and health without pricing everyone out of the units?

To be honest, I’m not sure it’s possible. At least, I think it might be unrealistic to imagine that every rental can perform to the kinds of standards we expect from our homes. Rental grade finishes, in all their unpleasant glory, will remain a consistent part of the landscape. I certainly think there can be improvements in all rentals, but to expect radical change across the entire market is a bit niave. So, the question is, where can we effect change and what kind of change can it be?

I think that there is a market niche in rental much like the one we have identified in homeownership. This is a group of people with a price point somewhere in between the bottom of the rental market where mere location is the driving factor of choice and the top end where money presents broad opportunity. Much like in housing, I think there is an opening to provide a better product at a similar price, but it requires compromise from both the renter and the owner.

The owner needs to be willing to spend the time, energy and money (though hopefully not too much more) up front to create a better building. The design process has to be thoughtful and involved so that performance can improve without ballooning the budget and finish can become more “high end” without high-end products. This upfront investment may mean a slightly less intense focus on pure profit with an eye for the long term benefits of the building strategy on the bottom line. Energy rate increases, growing consumer education and potential incentive structures will add long term value to a building with potentially lower opening margins.

The renter needs to understand that a better designed space can be smaller and still comfortable. They need to embrace urban living so that the city becomes an extension of their home. There may be a slight premium to the spaces but if they can grasp the energy savings and learn to use the building to their advantage that premium evaporates in the face of other savings. There shouldn’t be a sacrifice involved in a well design building. Quite the opposite in fact. But there needs to be a change in perception, especially when it comes to unit size.

Naturally, there will be a finish value difference to be understood as well. This is where design comes in. The expectation of things like granite countertops and other supposedly high-end specifications needs to be challenged by design that redefines affordable materials and creates a new understanding of value. Healthy finish options, artfully assembled can create a better space than all of the sexiest interior design in the most expensive downtown loft. I truly believe that good design can work it’s way around cost.

Lastly, the renter needs some flexibility when it comes to location. This is, however, not a one way street. While the renter should be prepared to find themselves slightly on the edge of their search area, owners need to provide locations that are well connected via transit and in neighborhoods growing in vibrancy and amenities. Location is the key consideration of many renters and owners need to help those renters understand new areas of the city that are not only viable alternatives but in many ways better ones.

This is, as usual, just a rambling account of my own opinions. It is light on details, but that is something we will remedy soon as we begin to develop our own rental units. In fact, we have already sent a couple investor proposals to that end, and if you are interested in getting involved, you need only let us know. We will be talking quite a bit about our specific strategies as those projects get under way.

As always, this post is intended as more of a conversation starter, albiet a long one. So, what do you think? What is the niche market where energy efficient rentals are possible? How much do health, efficiency and design matter to renters? Even if renters aren’t necessarily willing or able to pay much more for a rental are they willing to rethink space requirements, finishes and location in exchange for these things?

Let’s knock this about in the comments.

Our business model to date has identified itself with home ownership, but we are also big fans of rentals. Rental units are a key part of an urban housing mix providing density, incubation for future homeowners and variety for those who just don’t want to be nailed down. If ownership offers a neighborhood a stable base then rentals are the energy that keeps it from stagnating. Rental units are also an important part of our ongoing business goals as we look toward offering people a variety of ways to buy into the Postgreen idea.

We believe there is a big opportunity to introduce healthy, energy efficient options into the rental market. Much like “for sale” housing, rentals seem to have a huge void in the area of reasonably priced, design-centric, sustainable units. Too many renters are paying too much for utilities and living with sub-par air quality, and we think we are in a position to do something about it . . . for a few of them anyway. We will be talking about this extensively here and over at the Postgreen Homes Blog as we get started, so stay tuned.

We are looking to start construction on our first rental units in the next couple of months. To that end, we have sent out an investment proposal for the project to those on our Qualified Investor List. If you think you are on that list and didn’t get a proposal, or if you would like to be on that list, let us know. We are on a tight deadline for our first couple rental properties, so if you want in, speak up soon.

A short and somewhat unsatisfying post, I know, but think of it as a preview of more exciting things to come. Thoughts are welcome in the comments.

We have been playing around with some new ways to post video to our MLS listings and thought you might like to see where it led. As most of you know, we are on the verge of building four homes in the Fishtown neighborhood of Philadelphia under the moniker Avant Garage. These homes, which will feature our coolest interiors to date, are currently available for customization and purchase. Run through the customization tool and tell us what you think. We have made a lot of changes and could use some opinions other than our own.

The video we made, using a service called Animoto is almost like a glorified slide show, but boy is it glorified. I like the initial results, and I think it is a tool we will keep working with in the future. It’s easy to use and there is more flexibility than I originally thought. Feel free to go full screen with it. The high res version looks pretty good.

Don’t worry, this style of video won’t replace our more ridiculous on camera antics, but we think it might play a role in sharing aspects of our projects. I still intend to do a lot of work on the overall format and hopefully will have an update to show you soon, but for now tell us what you think in the comments.

I have a topic for discussion that has been brewing in my head for some time. It is illustrated below in an educatedguessographic about the New Construction Home Building in the US.

Discuss.

Hypothesis: If builders built homes in the “Market Gap” circle, they would sell them. If banks lended to builders that were catering to this market gap, they would be successful.

Every now and then I like to write a quick post about some of the ways in which we market our homes. I know this kind of article is not for everyone, but I hope at least a few of you like them. Those that don’t are free to sit this one out and wait for Chad’s upcoming post on a new low flow shower head. To some that might sound like a joke, but we are actually pretty excited about it.

Most of our marketing to date has been developed in an environment of austerity. The budget for our efforts resembles a teenager’s weekly allowance if that teenager were relatively unliked by his benefactors. Sure, there is occasionally money to do things, and I think we have used it pretty well (postgreenhomes.com). But, for the most part, you could convert our budget to ones, put it in your wallet and still have plenty of room for guitar lesson coupons (reference anyone?).

Fortunately for us, there are plenty of free or relatively inexpensive ways to make a lot of noise these days. Blogs, Twitter, Facebook and other social media outlets have given us space to offer useful and interesting (we hope) content. This has, in turn, led to free press exposure and conversations that flow over into other networks.

It also turns out that people like to talk (who knew?). So, we try to give them something to talk about and they often reward us by telling everyone they know. This type of “word-of-mouth” (oh no . . . marketing term) seems to be sparked in two major ways. First, people like to talk about strong technical information or bold provocative ideas that are capable of sparking interesting discussions, or at the very least, making them seem smart, bold and/or provocative. We try to provide this through most of our online content. Second, people like to share examples of other people acting foolishly. Everyone wants to be the source of a laugh, and a good example of ridiculous, potentially embarrassing behavior provides an excellent opportunity to pass one on. This opportunity is something we also occasionally try to provide (with varying success).

Our most recent foray into the latter is our “Special Message to Realtors” series of videos. These are short online videos directed at specific real estate teams with the ostensible goal of introducing our new Avant Garage project. Each video spends a short time speaking about the team in a hyperbolic and somewhat absurd way and follows with a brief intro to the project. The character is a sort of half conceived, exaggeration of myself in a bow tie and hat that barely fits on my gigantic head. The acting is relatively poor. The writing isn’t all that great. But, I might just be making enough of a fool of myself to make these worth sharing. I’ll let you be the judge.

If you can’t see the embedded video, click here to watch the whole series.

While these videos are primarily intended to introduce our project to agents who might bring us buyers, it is possible that they will also find their way to people who have never heard of us. If we, at some point, get the level of absurdity correct, the videos could have another life as a quick shared laugh. This could, in turn, put our work in front of people who would not have otherwise seen it. Some of those people might share enough of a level of interest to stick around, join the deeper conversation and help to strengthen our brand. And, thanks to our willingness to play the fool, these videos are relatively cheap (if not free) to produce.

On a related note, I often say that one of the major attributes Chad and I share is a lack of requisite shame or self consciousness. This, I think, is what allows us to put ourselves in places where the potential for embarrassment is high. I believe that this trait allows us to follow odd marketing paths (see ridiculous, low budget videos) that others might avoid. More importantly, it seems to make it easier to pursue crazy ideas in a very public way, an activity that has often seemed like a mission statement at Postgreen.

So, do you agree that the ability to stick your neck out and risk (or invite) being laughed at can make for better, less expensive marketing? How about for better entrepreneurship in general? Can good, useful content and absurdity share space? Even better, can absurdity be used to deliver useful information? Specifically, what are your thoughts on this video series? Does it have a shot at success on either level?

Let’s talk about it in the comments.

If you have any long terms savings or investments including stock, IRAs, annuities, etc., than this post is for you. In fact, if you think you might someday have some sort of long term investment plan than you will probably be interested. Heck, even the broke and opinionated will probably enjoy this discussion, so why doesn’t everybody just stick with me as I lay out our new investment option.

Basically, we are looking to move into building some rental and commercial properties that we can maintain control over long-term. We think that rental units are a strong part of any developing neighborhood, and that we have an opportunity to introduce a better way of approaching this type of building. We have also seen excellent performance from rental properties in the neighborhoods we like. You will definitely be hearing a lot more about that as we get into the real design work, but today I want to talk about how this type of project potentially changes our investment model.

Our model we use right now for our “for sale” development is, as most of you know, intended to expand the real estate investment opportunity to a broader range of people. We have had investors coming into projects with amounts as low as $10k and we feel this approach has worked very well for everyone. We have already paid out 8 investors using this model and they all seemed pretty pleased with the return. The terms for this type of investment look like this:

“For Sale” Model
Investment Levels: $10k and up
Term: 1 year (with a possible 6-12 month extension)
Return: 10%-12% Annually (depending on investment level)
Security: Unsecured Note
Position: Second (after bank, before Postgreen)
Repayment: Paid Immediately After Completed Sale of Project

This is a very basic model that has served us well so far. Unfortunately, it doesn’t exactly translate to a project which we don’t intend to sell. The rental style projects require a slightly longer term investment. This usually means additional security and a slightly different repayment plan. This additional complexity also ups the barrier to entry a little, but we still hope to make it an accessible opportunity for as many people as possible. Right now our thinking looks like this:

“Long Term” Model
Investment Level: $25K and up
Term: 5+ years (with an option to repay in 3 years)
Return: 10% Annually (depending on investment level)
Security: Secured Note (note is secured by real estate)
Position: Second (after bank, before Postgreen)
Repayment: Interest paid yearly. At the end of term principle and last year’s interest paid.

This is a guaranteed interest payment that is paid regardless of project disposition. It is not tied to rental rates, construction schedule or any other external factor. For example, a $50k investor would see a guaranteed return of $5k a year for 5 years. That would be a total return of $25k over the 5 year term of the investment. Compare this to other rates (for the sake of a simple comparison I am going to assume that you pull your interest out rather than let it compound):

Mattress: 0% ($0 over 5 years)
Savings: 1.75% ($4,375 over 5 years)
Treasury Bonds: 2.5% ($6,250 over 5 years)
IRA: 3% ($7,500 over 5 years)
Stock Market: 6% ($15,000 over 5 years . . . if you remain lucky)

These numbers are obviously very rough estimates based on conditions that are constantly changing, but the fact is, most people don’t see more than a 5% annual return on their money and those that do are working for it. The 10% base return we are offering seems to look pretty good in comparison.

Many of you will point out that there is a certain level of risk undertaken when investing in a real estate project. This is true. Investing in our projects requires a certain level of faith in what we are doing, but compared to the stock market over the last few years I don’t think it’s all that much of a leap. The investment is secured by real estate, and in rentals we are working in a robust, proven market. In the end, each individual project has to be evaluated on it’s particular merits but we hope the overall offering looks pretty good.

Lastly, I’ll mention the less tangible benefits of this investment. While we all understand that an investment is, first and foremost, a money making proposition, it doesn’t hurt to invest in something that matters to you or at the very least, something that doesn’t make you physically ill. Now, I would never suggest that what we do is charitable or even particularly altruistic, but we think it beats investing in companies that are building new and inventive ways to injure people or ones that seem to be intent on inflicting as much environmental damage as possible. It has got to be better than putting your money in a place where it might be used to lobby against your very well-being and that of your children. And frankly, while I paint a comic-book evil version of this scenario, it is hard (not impossible but hard) to find a place to put your money that isn’t at least tangentially related to the types of companies you wouldn’t tell your friends you support. Investing in a Postgreen Project will, at the very least, off-set a significant amount of carbon as all of our buildings are designed to operate on half the energy of a standard building, and we hope it will make you feel just a little better about where your money is spending it’s time.

Much like the “for sale” investment program, we will be creating a list of qualified investors who will receive project proposals as they become available. To be added to this list you should have at least $25k available to invest. This post should generate a lot of discussion on this program, but if you are already pretty sure you like it you can sign up for the list now by using the unattractive form below.

Email Marketing You Can Trust

So, there’s the idea. Now, we need to hear your thoughts. What works here and what doesn’t? Did I miss any important information about the investment model? Are there other models out there that you like?

Put your words in the comments.

(Post Edited: We edited a few lines above that were causing confusion with some readers regarding a “guaranteed” return. This was an error and we certainly are not the first ones to figure out how to guarantee an investment. No investment is guaranteed, including the ones we are proposing. If a project is wiped off the earth by aliens, for instance, it will probably hurt the chances of recouping your the full investments on that property. We are sorry for any confusion.)

We have talked before about the unreasonable growth in American home sizes even as the average household size continues to decrease. We have also spoken about the need to understand houses based on performance rather than square footage. Often these conversations turn toward educating potential home buyers. Ideas like understandable metrics and car-style performance labeling are usually suggested as a means to teach buyers about benefits of smaller, more efficient homes. The thought is that proper marketing can potentially convert home buyers, but there is a larger more difficult problem which can trump this educational effort. That problem . . . how does one assure that buyers even see your smaller home project and marketing materials when the process of looking for a home is geared to steer them away?

Prior to beginning a home search there is a decision path that potential buyers take. This path whittles home options to a manageable number. Traditionally it looks something like this . . .

• Step 1 -Price
• Step 2 – Location
• Step 3 – Square Footage
• Step 4 – Beds and Baths
• Etc.

Each step down this path eliminates homes that don’t match the determined criteria regardless of their potential other benefits. This is particularly problematic in the square footage category where a well designed smaller home can be eliminated before it even makes its case. Unlike price and location, which have outside factors (proximity to work, budget, etc.), square footage is almost solely a design concern, and a well designed, energy efficient 1400sf could be just as attractive as a 2000sf one. Unfortunately, the person looking for a 2000sf home is unlikely to ever see the smaller house.

One reason this problem might exist is because most real estate agents allow their clients to determine the criteria of their search. They seem to seldom offer alternatives based on their understanding of the market and home buying/ownership expertise. Real estate agents, in many cases, rely on the MLS (multiple listing service) to return search results based strictly on their client’s criteria without suggesting reasonable solutions slightly outside of their requested preferences. This means that even the most appropriate of smaller home projects don’t make it out of the mess of the MLS and in front of potential buyers.

Of course, this is not true of all agents. I’m sure there are many that do say something like, “have you considered a smaller, more energy efficient home?”, but I think those agents are still in the minority. This is not really their fault though either. It is a structural problem with our understanding of home value. The MLS itself makes it difficult to search on any criteria that consider efficiency, sustainability or design. Appraisers have to have their arms firmly twisted to take performance into consideration. Banks claim to offer energy efficient mortgages, but I’m not sure I’ve ever heard of anyone getting one. Size is still firmly in charge of the housing market.

Alright, now I know this post is a bit of a mess, but I wanted to get these thoughts out there so we could talk about them. Obviously we have some ideas about how to get our homes in front of buyers, but I want to hear yours. First though, am I right about this problem? Are good homes being ignored because they are slightly smaller? Who are the culprits behind the aversion to small? And then, how do we keep good, small homes from being ignored?

Let’s talk it out in the comments.