From Price to Value: A Movement Takes Shape

Clinging to outdated metrics is costing us more than we realize.

Last week, I published Value Per Square Foot: A New Valuation Metric, a call for the housing sector to move beyond the antiquated benchmark of price per square foot and adopt a more meaningful measure: value per square foot.

Unlike price per square foot, which essentially reduces homes to commodities, value per square foot captures the total cost and benefit of ownership, from reduced utility bills and lower insurance premiums to healthier indoor environments, resilience in the face of climate events, and technologies that adapt to occupant needs.

The response to was extraordinary. Builders, developers, manufacturers, lenders, architects, policymakers, and even homeowners flooded my inbox and social media feeds. Their message was clear: the sector is ready—starving—for a new way forward.

This enthusiasm isn’t an arbitrary coincidence. It’s the culmination of years of frustration with a valuation system that rewards squeezing every last dollar from every square foot, even at the expense of performance, resilience, and health.

Players throughout the industry know that the stakes are higher now, and it’s time to evolve.

Mounting Momentum

Housing fundamentals are solid, but with federal incentives like 45L and IRA tax credits phasing out, the ground feels shaky and uncertainty looms.

Yet, despite political headwinds, buyer demand continues to grow for homes that are sustainable, smart, healthy, and resilient. COGNITION Smart Data validates this shift:

• Over 70% of consumers say they are willing to pay more for sustainable upgrades if those investments reduce operating costs over time.
• Millennials and Gen Z buyers are moving beyond sticker price, factoring utilities, maintenance, insurance, and resale value into their purchasing decisions.

Meanwhile, the valuation metric guiding the housing sector hasn’t budged in decades. That mismatch—between evolved consumer expectations and outdated appraisal frameworks—has become a root cause of the affordability and accessibility crisis.

What Value Per Square Foot Really Means

Let’s break it down. This isn’t semantics; it’s a systemic reset.

• For Homebuyers
  Value per square foot reflects more than purchase price—it reflects resilience, efficiency, and health. Consider energy costs: a home with a HERS score of 58 (today’s national average) spends about $1,630 per year on energy—saving nearly $800 annually compared to older code-built homes. Add storm-resistant materials, healthy finishes, and smarter systems, and families save even more through lower medical bills, avoided repair costs, and reduced insurance premiums. For households, this isn’t abstract. It can be the difference between buying groceries, paying down a credit card, or affording childcare.
  
  
• For Builders
  Value per square foot reframes sustainability as profit, not sacrifice. Better building envelopes, high performance products, and durable materials allow for downsized mechanical systems—often offsetting higher upfront product costs. Smaller systems can mean fewer callbacks, longer lifespans, and reduced warranty claims. Builders who lean into this value narrative can command higher margins and differentiate themselves from competitors stuck in the “race to the bottom” on price.
  
  
• For Communities
  Resilient, high-performance homes reduce public costs and strengthen local economies. Every house that withstands a storm means fewer displacements and faster recovery. Healthier housing stock means lower healthcare costs and stronger workforce productivity. Value per square foot re-establishes housing as a long-term asset for communities, not just an investor commodity.

Collective Economics

Builders cannot and should not carry this transformation alone. A systemic shift requires a coalition that includes:

• Appraisers who recognize operational savings and resilience in valuations.
• Lenders who design mortgage products around total cost, not just sticker price.
• Insurers who account for the risk reduction of resilient homes.
• Realtors who can market long-term value rather than short-term price.
• Policymakers who craft incentives durable enough to withstand political cycles.

When these players align, the value equation becomes the industry’s DNA—not an optional upgrade.

A New North Star

The housing sector is crying out for a new compass. Value per square foot provides it. This metric transforms sustainability from “extra cost” to “core profit driver.” It reframes performance, health, and resilience as wealth multipliers.

We cannot afford another decade of building to code while ignoring the full value equation. This is our moment—political headwinds and incentive rollbacks notwithstanding—to pivot toward a housing model that is durable, profitable, and equitable.

Let’s use this moment to catalyze change. So I’m putting the question back to you:

• What angles are we missing?
• Which stakeholders must be engaged?
• How do we accelerate this transformation?

If you’re ready to help reshape the DNA of the housing market, to align our metrics with what truly matters, write to me at sara.gutterman@greenbuildermedia.com with thoughts, ideas, and suggestions. Let’s get to work.

Ready to Get Smarter?

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Publisher’s Note: Green Builder's 20th Anniversary celebration is sponsored by: Carrier, Trex, and Mohawk.