Tuesday, August 26, 2014

Why Home Prices Will Spike in 2018!

Starting in 2020, California is implementing building code revisions to Title 24. Title 24 is a set of building codes that are updated about every two years with the goal of making buildings/houses more energy efficient and healthier for the occupants. This sounds great, but it does add additional costs for new construction.

The legislators’ goal is to have all new residential housing built starting in 2020 to be Zero Net Energy (ZNE). Net Zero Energy means that any energy used is offset by renewable power produced onsite, which might mean fireplaces will not be permitted. In theory, all new houses will be designed and built to use less energy and produce enough energy to cover their use of energy. I say in theory, since the energy used in a house will greatly depend on the occupants.

Some of the goals will be accomplished by controlling the power at outlets to new standards for lighting. Since the most common and acceptable way to produce power for a house is solar panels, the hope is that there will be development in the technology to cost effectively store power when there is less or no sun. A neighborhood with houses covered in solar panels puts a lot of stress on the electric grid when a cloud floats by and at the moment the sun sets. Another option is small windmills.

Since the new code will affect all new construction making new homes more expensive, it will have a residual effect on existing homes.  But wait, this effect could be very significant as California Energy Commission (CEC) is pushing legislation to require homes for resale, existing homes, to meet the new standards at the close of sale.

Once people realize the implication of this requirement, I predict there will be a spike in existing homes closer we get to 2020.

If you would like more information below are some links.












1 comment:

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