State of the Industry

00:00:00:18 - 00:00:26:05
Mike Collignon: Now we're nearing the end of 2022, and while attention might be shifting towards reaching your year end goals or office parties or the upcoming holidays, I want to make sure that you remember that today is Pearl Harbor Remembrance Day. If you haven't been out to visit Pearl Harbor, it's a pretty moving and somber experience and one that should hopefully be undertaken if at all possible.

00:00:26:07 - 00:00:52:02
Mike Collignon: Speaking of reflecting, we're joined today by Sara Gutman, co-founder and CEO of Greenville. The media. You know, with conditions rapidly changing, building professionals need to pay more attention than ever to sustainability trends in order to meet the needs of today's home buyers. Sara is going to present Cognition Smart Data Market Intelligence, which includes the latest trends in consumer preferences, purchase drivers, and behavioral patterns.

00:00:52:02 - 00:01:26:27
Mike Collignon: By looking at what has happened that will allow us to project forward into 2023 and get ahead of the market. Now, in case you haven't met Sara. She is a former venture capitalist. She graduated cum laude from Dartmouth College and holds an MBA in Entrepreneurship and Finance from the University of Colorado. She has established a reputation as a visionary, thought leader and passionate advocate for sustainability, and she works closely with a diverse group of stakeholders in the building industry to develop impactful, long term green strategies that are simultaneously sustainable and profitable.

00:01:26:29 - 00:01:55:15
Mike Collignon: Now, we also need to make sure that we reflect on our sponsors. Doors and windows are manufactured to the highest standards of durability, energy efficiency, and security. All their doors and windows offer exceptional performance, energy savings options for customization and lifetime warranties. Replacing old doors and windows with Pro products provides long term return on investment and increased security, endurance, and thermal efficiency.

00:01:55:18 - 00:02:23:08
Mike Collignon: The Whirlpool Corporation started in 1911 as a small company in Benton Harbor, Michigan, but for more than a century, its flagship brand has driven innovations from introducing the very first automatic washing machine in 1948 to winning more than 20 CES innovation awards. They are rightfully proud of the American heritage and ingenuity that drive their continued pursuit of purposeful innovation.

00:02:23:11 - 00:02:41:09
Mike Collignon: Powershift by NV energy is a program that helps residential and business customers conserve energy and save money on their power bills. Power shift is a one stop resource to find energy efficient products and services. For more information, please visit N v energy.

00:02:41:11 - 00:03:03:28
Mike Collignon: Shift. And did you know that cultured stone products originated 60 years ago, when brothers Garrett and Floyd Brown saw the need for a new kind of building material? Well, today, cultures don't continues to refine their products and operations, to champion the environment, to provide builders and homeowners with the with the precision they've come to expect over the years.

00:03:03:29 - 00:03:30:02
Mike Collignon: Their trademark CCV stamp still appears on every product that leaves their manufacturing facilities as a guarantee to customers that they're receiving authentic, cultured stone. The original stone veneer. Now you can submit questions for Sara. Simply use that questions box that's over in the go to Webinar control panel. I'm going to review those questions and pose those to her during the Q&A time that we've set aside after her presentation.

00:03:30:05 - 00:03:34:19
Mike Collignon: Sara, I'm looking forward to your annual industry address.

00:03:34:22 - 00:03:55:27
Sara Gutterman: Mike, thank you so much, as always for your superb moderation. Thank you also to Mary Kestner, our production manager. She, as many of you know who have attended our webinars, is the wizard behind the curtain and makes it all happen. So thank you, Mary to you and thanks to everyone for attending today. Really appreciate your time. I know it's a busy time of year.

00:03:56:03 - 00:04:30:01
Sara Gutterman: We're very excited about this year. State of the industry presentation. Lots of new insights. For those of you who have heard me present before, it's about 90% new content. About 10%. A couple slides that you'll recognize. It's my normal spiel, because these topics are so important that I can't not include them in a state of the industry. And then before I dive in, I do also want to again thank our sponsors, Whirlpool Pro via cultured Stone and Powershift by N.V. energy.

00:04:30:06 - 00:04:52:04
Sara Gutterman: These companies help make it all happen, and we wouldn't be able to provide the high quality content that we do without their support. So thank you very much to our sponsors. Now, for those of you who know me, and as Mike said, my early career was in venture capital. And so I'm really more of a futurist than an economist.

00:04:52:06 - 00:05:30:23
Sara Gutterman: So while I do have some economic data about what's happening in the housing market, in the building industry, I really like to focus more on the leading edge of the industry and how it's transforming in terms of innovations and just things that building professionals and manufacturers and other stakeholders and investors really need to be paying attention to. So hopefully you'll you'll learn some new things today with respect to not only where the market is right now, but where it is heading over the course of 2023 and into the next handful of years.

00:05:30:27 - 00:06:01:05
Sara Gutterman: But let's start with current housing market conditions. I think we all know that inflation, high home prices, low inventory and economic uncertainty continue to impact the housing market and consumer confidence. Home contract signings, new home pending sales and housing starts are all down. New home sales are down by about 35% right now. Mortgages have reached a 20 year high and are expected to remain high for another 1 to 2 years.

00:06:01:08 - 00:06:33:28
Sara Gutterman: You know, we've seen about a 77% average increase in monthly mortgage costs since early 22, and that's really due to higher home prices and borrowing costs. And that's driving more affordability concerns, particularly in areas like transportation and food and other basic living expenses that have been compounded by those high housing costs. We've seen that the national median asking price is at about 425,000.

00:06:34:03 - 00:07:02:27
Sara Gutterman: So that's 100,000 more than a year year and a half ago. And the national median mortgage is now over $1,100. And national home prices have increased across all levels of the market. Entry move up high end. And you know, so we are seeing a little bit of a cool off in the market, particularly in what are called zoom towns or markets that grew really quickly during the pandemic.

00:07:02:28 - 00:07:35:00
Sara Gutterman: So these are large urban markets like Denver and Austin, Phoenix and Boise. We're also seeing a bit of a cool off in some of the suburban areas that also experience that faster growth during the pandemic. But, you know, when we're starting to see a little bit of a decrease in home prices. And so economists believe that in most markets there will be a 7 to 10% decrease in home prices in some of those overvalued markets.

00:07:35:03 - 00:07:57:21
Sara Gutterman: Experts predict about a 20 to 30% decrease in home prices. But from what I've seen from housing economists, economists, there's a little bit of a disagreement in terms of when we're going to start seeing those declining home prices. Some economists say that we're not going to see that in 2023, and that declining prices won't start until 24 and 25.

00:07:57:26 - 00:08:33:25
Sara Gutterman: Others say that we're going to start seeing that cool off in prices pretty quickly here. But even though, you know, Covid and inflation have impacted supply chains and we've seen fluctuating and frankly, increasing material prices, we really think that the housing fundamentals remain strong. And we are not expecting a free fall in the market or in housing prices like in the 2008 recession, namely because of stricter underwriting practices, which are protecting those fundamentals as well as increased homeowner equity.

00:08:33:28 - 00:09:03:20
Sara Gutterman: There's a high level of homeowner equity right now and also home price appreciation. Some of the other factors, like all cash investors that are buying undervalued assets. And then our historically low inventory, we believe will also protect the housing market from experiencing any kind of big freefall or huge drop off. Now, when we look at the short term and I, you know, I think it's important to keep an eye on short term metrics, on quarterly numbers, on even month to month numbers.

00:09:03:20 - 00:09:28:05
Sara Gutterman: However, I really encourage my team, our readers, our colleagues to look at the long term prospects. So when we. Because I think that when we keep the long term in mind, it helps give give us perspective. Certainly in the short term we are seeing, you know, a difference in dynamics this year and into 2023 than we have over the last couple of years.

00:09:28:12 - 00:09:55:03
Sara Gutterman: On the sell side, sellers are making what a year ago would have been unthinkable concessions. So over half of active projects are offering incentives of over 11,000, or about 2% of the list price. And again, a year ago, that would have been unthinkable as homes were selling over list price in an hour upon you know, of listing or, you know, just very fast rates.

00:09:55:09 - 00:10:17:03
Sara Gutterman: So we are starting to see the dynamics change, moving more from a seller's market to a little bit more of a buyer's market. And then on the mortgage side, we are seeing an increase in adjustable rate mortgages. And those are the balloon payments that really got homeowners in trouble in the 2008 crisis, where they got into homes at lower interest rates.

00:10:17:06 - 00:10:39:07
Sara Gutterman: But then those ballooned and all of a sudden overnight, homeowners realized that they couldn't actually afford their homes anymore. So we are starting to see a little bit of those adjustable rate mortgages come back into the market, as buyers want to get in at those lower rates and fix those lower rates. So, you know, it's a little bit of buyer beware in terms of those types of mortgages.

00:10:39:09 - 00:11:06:18
Sara Gutterman: We are also seeing that housing costs are outpacing increases in wages by up to about 20% in some markets. And that is affecting those markets that I mentioned earlier where the payment to income levels, you know, house payment income levels have a big differentiating differentiation. Again, you know, like Denver and Phoenix, but also in markets like San Francisco and Salt Lake City.

00:11:06:18 - 00:11:35:22
Sara Gutterman: And, you know, because of these dynamics, a lot of prospective homebuyers have been pushed to the sidelines waiting for home prices and mortgages to drop. So, you know, there is there are certainly some of those affordability concerns. Now, one metric that we are tracking, which is a little bit of a red flag, is the percentage of first time homebuyers, which is at its smallest share of the market since this data has been tracked.

00:11:35:24 - 00:12:02:15
Sara Gutterman: So we're at about 26% for first time homebuyers in terms of total home buying, versus a historical average of about 40%. And that's really because the affordability issues, certainly, but also because first time homebuyers are competing in a market with an anemic inventory against investors and repeat home buyers who have housing equity to leverage, who are fairly flush with cash.

00:12:02:15 - 00:12:35:13
Sara Gutterman: And so what we're seeing in a lot of places is that first time home buyers are being replaced by older and wealthier and, frankly, whiter or less diverse buyers. So we're starting to see some builders respond to some of those concerns and pressures by prioritizing development near public transportation, or converting unused retail or office space into additional housing units, and focusing on higher density as well.

00:12:35:15 - 00:13:20:11
Sara Gutterman: Now let's shift over to the rental market. So there's a little bit of good news for renters. There's currently a negative demand for rentals, meaning more people moving out of rentals and moving in, which is leading to some moderate relief and price reductions. The median national market monthly rent is about 1800, a little bit less than $1,800. The bad news is that the percentage of rentals to homeownership, that ratio is that it's highest level in 55 years, and a really unprecedented percentage, about 70% of rentals now being run by large companies and investors who are using algorithms for pricing.

00:13:20:11 - 00:14:02:16
Sara Gutterman: So, for example, there's a very controversial software out right now called Yield Star by a company called Real Page. And it's computer driven pricing that these algorithms suggest price increases to these large company landlords. And what that does is, one, it prevents renters from negotiating with human landlords for better terms. Two interestingly, sometimes the algorithm is telling, you know, these large, large company landlords to leave units vacant, which is interesting because, you know, that's that's a little bit counterintuitive.

00:14:02:19 - 00:14:28:27
Sara Gutterman: But those vacant units, the algorithm is telling them to keep those units vacant in order to get higher prices down the road rather than devaluing those units. And what that does is it really creates a vicious cycle preventing renters from creating equity and wealth, because the more years that a renter rents means fewer years owning a home and increasing home equity.

00:14:28:29 - 00:14:55:09
Sara Gutterman: Now, our editor in chief, Matt Power, believes that we're going to start seeing restrictive rental legislation at the metro level, such as rent caps, limit on rent increases and tenant protections. Now, with all of that said, when we survey our builder audience and we talk with our friends and colleagues in our network, builder confidence is is relatively okay.

00:14:55:15 - 00:15:35:22
Sara Gutterman: Over 60% of our home builder audience. And keep in mind we reach progressive building professionals, early adopters and first movers. But they're pretty optimistic about the long term prospects of the housing market. In fact, a lot of builders that I speak with are kind of happy, just kind of behind the scenes. I don't know that they would admit this in public, but they're kind of happy to have a little breathing room and a pause from just designing this of the pandemic years where everybody was just running a marathon every day, just to keep even and really just working as hard as they could to to keep up with demand.

00:15:35:24 - 00:16:02:20
Sara Gutterman: And then, of course, we were experiencing, you know, exploding labor and material prices and costs and shortages of both labor and materials. So, you know, I think in general, again, our builder audience feel like they have enough of a backlog to keep them going through 2023. They've expressed that if they if they are going to have some problems, those might manifest in 24 and 25 if the economy falls into a recession.

00:16:02:20 - 00:16:28:12
Sara Gutterman: But that's still an if nobody knows where that's heading. With that said, about 70% of our builder audience expects that the Inflation Reduction Act and even the infrastructure bill will have a positive impact on their business. So providing incentives and rebates for high performance products, electrification technology like heat pumps and induction cooktops, solar plus storage and demand side energy management systems.

00:16:28:14 - 00:17:00:12
Sara Gutterman: About 85% of our builder audience reports stable finances and access to financing a lot. The actually, most of our builders have told us that they have increased worker pay to combat labor shortages. With that said, you know, skilled labor will continue to plague the industry, particularly when it comes to advanced technologies like heat pump HVAC systems that require new levels of training and education.

00:17:00:13 - 00:17:28:24
Sara Gutterman: We're hoping that the Inflation Reduction Act is going to allocate funds. They have your marked funds for workforce training, and we're hoping that those funds get deployed accordingly to help bring up the level of not just awareness, but training for these technologies that will get us to a decarbonized, all electric net, zero energy, water, carbon, healthy, resilient, connected, solar powered, built environment.

00:17:28:27 - 00:17:51:12
Sara Gutterman: Now, I mentioned earlier that, you know, I really believe that it is of paramount importance that we keep our eye on these short term metrics and fluctuations in the market, but that we really keep our focus on the long term opportunity. And there's four things that keep me very positive and optimistic about the long term prospects of the housing market.

00:17:51:13 - 00:18:22:20
Sara Gutterman: First is that if you look at historical home buying segments such as growing families, seniors who are either retiring or need to move for health care reasons, and workers who historically have needed to move in order to be closer to their offices. Those three audience segments are still buying. That growing family segment is being driven by millennials and now more and more Gen Zs.

00:18:22:23 - 00:18:51:09
Sara Gutterman: So that is going to maintain very strong growth. We're also seeing in terms of the third segment, workers, it's interesting because remote work has now kind of flipped that segment on its head, where there are still workers that are moving to be closer to offices and work opportunities. But then now we have this new segment of kind of that strata that is actually doing the opposite, right?

00:18:51:10 - 00:19:22:20
Sara Gutterman: They're moving away from offices because they can work remotely, and they're moving to markets where they want to live. Tertiary suburbs, rural areas, etc.. And so that's driving growth, continued growth and long term opportunity in the housing market. Two the missing middle, this huge acute shortage of attainable missing middle homes that Fannie Mae predicts is about a 3.8 million unit shortage.

00:19:22:27 - 00:19:47:07
Sara Gutterman: So these are homes for working families, for nurses, for, you know, first responders, for teachers that are attainable. I'm not going to use the word affordable because that has a very specific definition with respect to HUD. So this is, you know, kind of on the very low end, 80% to on the very high end and resort markets, up to 170% of Army.

00:19:47:09 - 00:20:16:23
Sara Gutterman: And there's such a huge demand for these missing middle attainable homes. And that is not going away, particularly because these are the types of homes that those millennials that are have become the top influencers in the housing market, buying, you know, spending more money on buying and remodeling homes and any other audience segment. And that's, generally speaking, the type of housing unit that that audience segment is requiring right now.

00:20:16:25 - 00:20:51:03
Sara Gutterman: And so, you know, for building professionals and manufacturers alike, there's this huge white space in the the types of units that we're delivering. We'll talk a little bit more about what those missing middle units should look like, what they should include. But for anyone that wants to future proof their business, you know, get into that attainable missing middle space of homes that are net zero energy, water, carbon, all electric, solar powered, connected, resilient, healthy and you will future proof your business.

00:20:51:05 - 00:21:20:21
Sara Gutterman: So that's kind of the third piece. This next this segment of kind of next generation homes that's driving long term opportunity. And then the fourth element that I really believe that's driving that long term housing opportunity is a transforming model for homeownership. You know, I think that there's still an opportunity for families and individuals to buy a home to generate equity in their homes and to create that generational wealth.

00:21:20:22 - 00:21:47:24
Sara Gutterman: But what we're also seeing now is interesting. We're starting to see hospitals and school districts and even companies buying homes for their employees. Now, we could debate whether this is a good thing or not, because if home ownership remains in the hands of these institutions and companies, does that really help the occupants? Right? The families and the people?

00:21:47:25 - 00:22:15:16
Sara Gutterman: Now there are models we're seeing where it's, you know, kind of rent to own so that the occupants and the families and the employees can work to buy these homes. And that's good because that helps create that homeowner equity and generational wealth. But the verdict is out a little bit in terms of, you know, kind of how that dynamic will impact home equity and and equity creation.

00:22:15:18 - 00:22:41:04
Sara Gutterman: But, you know, at the end of the day, as I mentioned, we have this very acute housing shortage, this 3.8 million unit missing middle. And we're not going to be able to solve that by building lowest cost per square foot homes. It's going to take innovative thinking and transformation throughout the entire housing landscape to yield an enduring solution for this particular inventory shortage.

00:22:41:04 - 00:23:15:16
Sara Gutterman: And the predicament is intensifying, particularly because the price of an average American home is more than three times the average annual household income. So it's really essential that we ask ourselves the right questions today if we're going to fashion appropriate solutions for the future. And I really believe that if we fall into the trap of building homes based on Ami metrics, lowest upfront cost and price per square foot alone, we will inevitably perpetuate the vicious cycle that got us here in the first place.

00:23:15:16 - 00:23:46:23
Sara Gutterman: And unless we are building those next generation homes that are net zero electrified, resilient, healthy, connected, solar powered, and in some cases prefab primarily to address waste reduction, insufficient labor issues and other performance and optimization elements. Then all we're doing is basically building tomorrow's slums and erecting structures that second, third, fourth homeowners are going to have to fix or repair, upgrade or even tear down.

00:23:46:23 - 00:24:12:15
Sara Gutterman: So it's really important right now that we rethink the housing ecosystem, right? So we have to start thinking about homes as a panacea for health and wellness. How can our homes help heal us and our planet? How can we drive the adoption of building solutions that are scalable, that minimize waste, optimize quality control, and solve for labor and supply chains?

00:24:12:15 - 00:24:48:24
Sara Gutterman: Challenges? How can we rethink and prioritize how we use space for things like mixed use communities? How can we create that generational wealth through performance and sustainability and resiliency? And then, of course, how can we create new appraisal and financing vehicles that are going to address funding gaps, like for prefab homes or for sustainable communities in rural markets that capitalize sustainability upgrades and improvements and incorporate energy efficiency and resiliency?

00:24:48:27 - 00:25:10:17
Sara Gutterman: So how do we do that? We get to a decarbonized built environment. There's a couple slides here that those of you who have heard me present before are going to see again. This is where I just can't get away from my spiel about decarbonization. It is full scale elimination of all carbon and greenhouse gas emissions. I'm not going to go into huge detail right now into this.

00:25:10:18 - 00:25:37:12
Sara Gutterman: If you're interested in learning more about decarbonization, I have given many webinars about decarbonization. Decarbonizing our economy, decarbonizing the built environment. So please go on to our website and go under the resources tab and go to webinars and look for those links to those webinars. But we know how to decarbonize. You know, it has to do with sequestering carbon through forests and oceans.

00:25:37:12 - 00:26:15:05
Sara Gutterman: Innovative, innovative carbon tech. It has to do with rethinking the emissions cycle. Right. So understanding the difference between embodied carbon and operational carbon. So for buildings, operational carbon is really has to do with kind of the use of a building and energy. Whereas embodied carbon incorporates everything from raw material extraction to transportation to manufacturing of the products that go into our house, to more transportation, to the construction process all the way through the operational cycle to end of life.

00:26:15:07 - 00:26:49:26
Sara Gutterman: And then we have a roadmap to get to decarbonization that includes adoption of renewable energy, electrification of everything, transformation of industry and agriculture, and land use practices. I am very excited about innovations and things like data and analytics to improve production and forecast cycle time and development costs. Cloud platforms that connect and run operations at scale and speed, the Internet of Things that just connects everything and allows us to remotely manage everything.

00:26:49:28 - 00:27:32:11
Sara Gutterman: Intelligent automation, which actually uses historical data to find patterns and optimize predictions. Mobility solutions so apps for seamless connectivity that leverages 5G to deliver real time visibility and predictive analysis. Robotics. So that's, to me, really human and machine collaboration to enhance safety, production and maintenance, reduce costs and also address labor shortages. Of course, cyber security, the electrification of everything, and then microgrids, which are connecting everything and making, you know, virtual power plants out of the built environment with demand side energy management and monitoring and peak load shifting.

00:27:32:14 - 00:27:51:27
Sara Gutterman: And so all of those innovations are of paramount importance. If we're going to move from net zero energy to net zero carbon in the built environment, again, I'm not going to linger here because we have lots of content and webinars about net zero everything. In fact, I think that's the name of one of the webinars I gave several months ago.

00:27:51:27 - 00:28:16:29
Sara Gutterman: But, you know, suffice to say that according to the UN, carbon emissions from buildings must be reduced by 50% by 2030 and 100% by 2050. If we even have the slightest chance of staying under a 1.5 degree temperature rise, and not even 1% of our existing buildings are considered net zero carbon today. So clearly we've got a long way to go.

00:28:16:29 - 00:28:51:29
Sara Gutterman: So getting to net zero carbon will indeed require the revamping of design, construction, transportation and manufacturing processes, as well as those land use policies, codes and regulations. From a product standpoint, again, that's looking at things like material extraction, transportation, manufacturing, installation, end of life. From a construction standpoint, that means looking at siting and design and construction, best practices, building science best practices, operations, maintenance, renovation, and then also designing for deconstruction.

00:28:52:02 - 00:29:25:23
Sara Gutterman: We are absolutely going to need enhanced codes that require tighter, better performing buildings, and we're starting to see the creation and adoption of very strong codes like zero codes that have been adopted in Oregon, which require 100% operational carbon reduction for new buildings by 2030, and about a 65% for retrofits, and then total net zero carbon drawdown for the entire built environment by 2040.

00:29:25:23 - 00:29:58:19
Sara Gutterman: So again, very aggressive and very necessary. So in order to get to this required transformation, we're just going to have to embrace the circular economy. So in contrast to our current take and waste model, a circular economy is designed to decouple growth from the consumption of finite resources by sharing, leasing, reusing, repairing, refurbishing and recycling existing materials, natural resources, products and energy as long as possible.

00:29:58:19 - 00:30:40:26
Sara Gutterman: So in this type of an economy, manufacturers create products that are intended to be reusable, designing waste and designing waste out of the process, and designing with regeneration and natural systems in mind. And, you know, establishing this kind of circular economy is essential if we can reach if we're going to reach full scale decarbonization and tackle everything from climate change to biodiversity loss to, you know, our pollution and plastics crisis, unfortunately, only a little less than 9% of our economy is currently circular, and the use of our resources continues to grow every year.

00:30:40:28 - 00:31:08:17
Sara Gutterman: Now, within the circular economy, we're going to start seeing some interesting shifts. Things like dynamic pricing for recirculating regenerative and circular products. We're going to see micro factories and hyper localized manufacturing that really take advantage. You know, one man's waste is another man's treasure. So we're going to start seeing more of those kind of cottage cultures. We'll call them.

00:31:08:19 - 00:31:33:04
Sara Gutterman: We're also seeing a huge increase in what's being called nature positive actually. Urban Land Institute Uli is using this term more and more nature positive. So when Uli starts using this term, I have to say it's not fluffy or woo woo anymore. So it's really, you know, enhancing the resilience of our planet and societies to reverse loss of habitats and ecosystems.

00:31:33:06 - 00:32:11:29
Sara Gutterman: Of course, regenerative businesses. Right. So that support the natural world ability to replenish itself. And then something that I like to call less doesn't mean loss. So really rethinking our default setting of abundance, how much do we actually need to be happy. And you know, how can we from from a building from a built environment standpoint, a circular economy really focuses on reusing materials from homes and buildings for new construction without them breaking down and decreasing their value.

00:32:12:02 - 00:32:37:07
Sara Gutterman: So that means that you're going to have to start designing homes and buildings for disassembly and reuse. And we're starting to see the emergence of what's being called material passports. So these are records of materials, products and components that have been used in a structure where stakeholders along the construction chain can upload data on the products and components used in a home or a building.

00:32:37:09 - 00:33:07:24
Sara Gutterman: And ideally, these material passports include information on the materials that are being used, where they or who supplied them, their current condition after wear and tear for transportation and construction, the real time market price, and the associated environmental impact. Because what these will do is it'll actually make it easier at the end of the building's life, or at least of a products life, to recover these products and materials.

00:33:07:24 - 00:33:32:22
Sara Gutterman: And I, you know, reuse them or repurpose them in some way into the technological or the biological loop, rather than just disposing of them or incinerating them in demolition or renovation. So we're starting to see these material passports take off in Europe. They're coming to the US, so keep an eye open for them. This also translates into product information.

00:33:32:22 - 00:34:21:06
Sara Gutterman: So we're starting to we I literally am talking with a whole spectrum of companies across the building sector that are starting to design products with sustainability in mind. So sustainability is as important of a decision making factor as performance and esthetics, durability and cost. So here are some of the elements that manufacturers are starting to consider. So product innovation with decarbonization sequestration, circularity lifecycle and mind waste reduction, etc. we're certainly starting to see a rise in environmental product declarations, or ePDM, which transparently report objective, comparable third party verified data about products.

00:34:21:08 - 00:34:32:12
Sara Gutterman: And then, of course, we're starting to see embodied carbon tools and calculators and software that that track.

00:34:32:14 - 00:35:01:22
Sara Gutterman: Carbon emissions and environmental impact. I actually only recently got a preview of or a walkthrough of the beam. It's a cloud based Excel tool, Google Sheets tool that looks at carbon emissions. It's really creative and innovative, and it can help builders and designers and other stakeholders see the embodied carbon and carbon impact of the products that they're using in their homes and buildings.

00:35:01:22 - 00:35:39:28
Sara Gutterman: And actually, it gives better scores for some alternative materials, which we'll talk about in just a second, that actually either prevent carbon emissions upfront because, for example, maybe they're agricultural waste products that would have just been disposed of, or they have carbon storing capabilities or other, let's say, carbon beneficial elements. We're also starting to see innovation and adoption of a wide swath of alternative materials.

00:35:39:28 - 00:36:07:29
Sara Gutterman: So low carbon, carbon neutral and negative carbon solutions, particularly in those high impact sectors like cement and steel, we're starting to see substitutions of more sustainable versions of materials within categories or category categories getting replaced by other types of more sustainable, less carbon intensive products. You know, I think clearly, you know, the elephant in the room here are concrete.

00:36:07:29 - 00:36:47:22
Sara Gutterman: It's about 7% of the cement concrete sectors, about seven, 7 to 10% depending on who's counting of the total CO2 of total CO2 emissions in general, it also comprises about 20 to 50% of material carbon emissions in building projects. Fortunately, there is innovation on this front. Companies like Carbon Cure creating a product that's actually more structurally sound and uses carbon in the cement mix to make a better, more durable concrete product.

00:36:47:27 - 00:37:24:02
Sara Gutterman: We're also seeing, like the Portland Cement Association get on board with decarbonizing that sector. We're seeing net neutral and recycled steel and in some cases projects replacing steel, certain steel elements with things like fiberglass rebar. We're starting in the wood area to see fast growing wood options like bamboo and then certainly advanced framing techniques more, you know, things like 24 inch on center stud spacing, single top plates, box headers and other wood savings tactics.

00:37:24:02 - 00:37:58:08
Sara Gutterman: And we can kind of go through, you know, this whole list. I think other products like magnesium oxide board or MgO that has, you know, moisture, fire, mold and insect resistance and can also eliminate, you know, additional layers on a on a project to reduce further carbon footprint, you know, starting to see a lot of innovation there. And certainly as demand grows for these alternative materials, we're going to see an increase in cost competitiveness for, you know, low carbon options.

00:37:58:10 - 00:38:31:07
Sara Gutterman: I think that we are also going to see more R&D and innovation funding from corporations for these alternative materials, as well as from, you know, the federal government that will trickle through both through the infrastructure bill and the IRA. But then we're also starting to see more public private partnerships to advance these alternative materials. And then I think we'll also see incentives and regulations and changing codes and standards to support the use of more sustainable materials.

00:38:31:07 - 00:39:11:21
Sara Gutterman: And then something that I'm calling greening rooms or lowest interest rates for loans and mortgages and even funding for products, projects, etc. that utilize these alternative materials. The last thing that's really worth noting is that as carbon becomes a meaningful input to some of these raw materials, we're starting to put a price on carbon. And that totally changes the dynamics of how we think about carbon, transforming it from a harmful greenhouse gas to a useful raw material input, or I should say, material input.

00:39:11:24 - 00:39:43:17
Sara Gutterman: And along with circularity, product innovation, alternative building materials, we are absolutely seeing the increased adoption of ESG. In fact, for those of you who don't know, Green Builder Media has joined forces with a wide spectrum of building professionals, investors, manufacturers and other stakeholders in the building industry to create an ESG working group to to develop a set of defining principles.

00:39:43:18 - 00:40:32:23
Sara Gutterman: We're going to focus initially on the housing new construction housing market in the US, kind of putting some guardrails around our initiative, rather than trying to be everything to everyone in the building sector. But we have broken into seven working groups environmental, social and governance, measurement, business case, innovation and outreach and education. And hopefully by around this time next year or even a little bit earlier in the year, we will have this set of defining principles to showcase how not only is ESG an essential business requirement to satisfy stakeholder demands and achieve cost savings and drive revenue and reduce business risk, and do things like streamline operations and increase productivity.

00:40:32:24 - 00:41:10:27
Sara Gutterman: All these, you know, business benefits, but that, you know, it also has a very positive impact on occupants and on communities and helps to actually create greater homeowner and community wealth. So we're really excited about this initiative. And it was really founded in the fact that investors are now placing new requirements and mandates on builders and developers, and now the market consumers are driving ESG demands for manufacturers.

00:41:10:27 - 00:41:41:22
Sara Gutterman: And from a kind of a housing and real estate perspective, a lot of questions are being asked now, ranging from, you know, what are the environmental aspects of a community? What are the the social impacts of a community within surrounding neighborhoods? Can these new developments make a positive contribution to the surrounding community and neighborhoods through amenities like community gardens and co-working spaces?

00:41:41:24 - 00:42:19:03
Sara Gutterman: You know who's actually building and developing and working on these communities, right? Are there what are the business impacts of those, you know, builders and developers? How are their businesses run? So, you know, there's a lot of questions being asked from an environmental standpoint. In our working group, we're looking at, as I said, a wide spectrum of topics from greenhouse gas emissions, of the built environment and the building process to water related topics, usage and quality, stormwater and groundwater.

00:42:19:06 - 00:42:57:06
Sara Gutterman: We're looking at habitat loss and solid waste, certainly operations of buildings, electrical demand and infrastructure and how we can support that. And certainly embodied energy from a social standpoint. We're looking at topics like affordability of housing, supportive housing and housing equity. And we're looking at kind of the social framework from two levels. One, workers and employees within the housing sector, whether those are employees for builders and developers or contractors, but then of course, also occupants and communities.

00:42:57:09 - 00:43:39:05
Sara Gutterman: And then from a from the G standpoint or the governance standpoint, we're looking at things like accountability and transparency, carbon reductions based bonuses for executives and managers and other elements. And then, of course, we're also looking at effective messaging and how we can really start talking within the building industry, but then really far beyond the building industry about how and why it is so important to have ESG strategies in place at a builder, developer, you know, architect, designer building professional level, at a manufacturer level, at an investor level.

00:43:39:05 - 00:44:12:14
Sara Gutterman: And so, you know, I think we're all agreed how important ESG is, because if we don't reduce our carbon emissions through ESG circularity decarbonization, we will hit our 1.5 degree warming target in a shockingly short five years. That's tomorrow. The market demand is there. We know that consumers want companies to be environmentally and socially responsible. They'll spend more on sustainable products, and, you know, they want businesses to be good corporate citizens.

00:44:12:14 - 00:44:55:21
Sara Gutterman: And ESG really enables a pathway for those corporations of all kinds, corporations and different types of organizations and institutions to kind of implement a blend, a blended set of values that equally prioritizes people, planet and profit. And so we're working now with Green Builder Media. Aside from the ESG working Group, we actually are working with a lot of our partners, whether those are manufacturers or building professionals and developers and even investors, to really think about, you know, kind of what what their ESG strategy should be within their companies.

00:44:55:28 - 00:45:17:28
Sara Gutterman: We start with that materiality assessment. You know, what is ESG? What are the ESG elements that are important to that entity? What are their goals and priorities, you know, and how are those goals helping to meet a company's mission? You know, we always believe that it's important to reveal insights about a company's ESG journey, right? So not all it's not all warm and fuzzy.

00:45:18:00 - 00:45:40:00
Sara Gutterman: You know, sometimes, you know, companies have run up against struggles and obstacles. And we think it's important to articulate those as well. But we also think it's really important to talk about how those entities anticipate that they will overcome those hurdles and obstacles moving forward. So, you know, it's a very robust discussion right now. And we're going to start seeing more and more of this.

00:45:40:00 - 00:46:10:23
Sara Gutterman: So, you know, if you are not paying attention to ESG yet just in the general marketplace or specifically within your company, regardless of how big you are, it's time to start thinking about this, because companies of all kinds going to be required soon to really start thinking about ESG now, shifting into next generation homes and buildings. Again, I'm not going to spend a lot of time on these elements because we've given lots of webinars.

00:46:10:23 - 00:46:37:27
Sara Gutterman: We write articles and blogs every day about these topics. What I will say is that if you look at the chart on the right, this is a consumer survey, recent consumer survey from the last couple of months. And you can see net zero energy, water, carbon electrification, healthy homes, resiliency, connected living, solar plus storage. These are all important and increasing and important importance to consumers.

00:46:37:27 - 00:47:07:21
Sara Gutterman: So the market demand is there. You know we know how to get to next generation homes and buildings. Same thing with communities. You know, I think that Babcock Ranch in Florida, after, you know, the last big hurricane is, was kind of a beacon in the storm. For those of you who haven't read about it, Google it. Babcock ranch, it is a community that was it's 100% solar powered.

00:47:07:21 - 00:47:37:04
Sara Gutterman: It's got storage. So it's got power, resiliency. But as much as that, it was built with natural systems in mind and it really embraced the natural ecosystem, kept swales and different natural features that existed before the community was built out. In fact, the community was built around those natural features, and those natural features prevented that particular community from being flooded.

00:47:37:04 - 00:48:07:03
Sara Gutterman: It was an island in the storm, literally. It was the only community in Florida that withstood that, that hurricane. And I think that, you know, to transform to these next generation homes and communities, it's absolutely going to take some federal assistance. And fortunately, that is coming starting in January. We are still not 100% sure how the IRA tax credits and incentives are going to funnel down.

00:48:07:09 - 00:48:48:28
Sara Gutterman: Hopefully we will know by early January. In fact, I'm giving a webinar with Synovus and the Department of Energy on January 12th, and we're hoping that Eric Whirling from the Department of Energy is going to be able to give us more insights that are kind of breaking breaking news on these different rebates and credits for things like heat pump technologies, electrical, smart electrical panels, you know, insulation, high performance windows, etc. but it's coming and it's here and it's going to, you know, help us transform to this net zero all electric built environment.

00:48:49:00 - 00:49:00:22
Sara Gutterman: And as we think about the decarbonization of the built environment. And by the way, these are pictures from our 100% off grid solar plus storage powered.

00:49:00:24 - 00:49:26:08
Sara Gutterman: Net zero project in the mountains of Colorado Mariposa Meadows. Again, go to our website. You can read all about it. It's just an incredibly cool project. But you know, we're starting to see more incentives like reduction on property taxes for net zero electric homes. Certainly, the rebates for energy efficiency and electrification technologies. But of course we have to marry those with climate resilient design.

00:49:26:09 - 00:49:51:13
Sara Gutterman: My friend Peter Pfeiffer, the renowned sustainable architect, would just be very angry with me if I didn't mention that. It all starts with, you know, understanding that, you know, our climate is changing and a warming planet means more cooling days, more greater cooling loads, and we have to design for energy reduction as well as for electrification and resiliency.

00:49:51:13 - 00:50:23:23
Sara Gutterman: So we've got to deploy these best building science practices, weatherization, you know, infiltration losses, etc.. And then, you know, once we kind of cover those basics of sustainable design, energy efficiency, building science best practices, then we can start looking at those high performance products, the performance metrics in terms of modeling and then diagnostics and data collection, and be able to use that for things like reporting energy use at the point of sale.

00:50:23:25 - 00:50:46:09
Sara Gutterman: How interesting would that be if we did that in our country? There are some markets like Austin that started doing some things like that. But I think we're going to, you know, need to see a lot of shifts and changes in that area in terms of the barriers. Unfortunately, right now, few utilities will will fund the electrification of homes.

00:50:46:11 - 00:51:19:00
Sara Gutterman: We are seeing more utilities kind of build in incentive programs and rebates for things like smart thermostats, home energy assessments, home energy saver programs, appliance replacements, etc. so that's good. But you know, I think that there are high costs to converting existing buildings to all electric and decarbonize structures. It is easier to design those things into to new buildings.

00:51:19:00 - 00:51:44:07
Sara Gutterman: And then, of course, another barrier is the fact that there is a bit of a slow adoption on the labor side. We're hearing that even our builders, who want to introduce geothermal and heat pumps and induction cooktops and things like that, are getting a little pushback from their contractors who are saying, look, this is what we do. We're so busy, we're not going to learn something new right now.

00:51:44:07 - 00:52:12:23
Sara Gutterman: So that's becoming a little problematic. But we are also, in terms of the solution, starting to see more by way of the utilities in terms of like time of use rates offloading or peak load shifting or shedding to off peak hours, you know, from 10 p.m. to 8 a.m. natural risk mitigation to ensure that transmission lines can deliver energy in times of great and greatest needs.

00:52:12:29 - 00:52:32:19
Sara Gutterman: This drives our president, my co-founder Ron Jones, crazy. When we see coverage of natural disasters and we say, oh, we see, oh, the utilities are fixing power lines, but how many of those utilities are going to pay to actually bury those power lines so they don't have to fix them again in the future? Don't you think that's a better investment?

00:52:32:21 - 00:52:57:25
Sara Gutterman: And then, of course, you know, we need to start seeing proper AMP service, upgraded transformers and other infrastructure again, hoping that that starts to be addressed through the IRA funding. So a lot of this kind of comes back to that utility readiness. And who's going to pay for some of these things? We can't talk about next generation homes unless we talk about the urgency of water.

00:52:57:25 - 00:53:38:25
Sara Gutterman: Because if there's no water, there's no permits, there's no market growth. Fortunately, we are seeing a lot of innovation with respect to some of the basics, like low flow plumbing fixtures, but also now more and more things like leak detection and water monitoring systems, greywater systems, smart irrigation systems, etc. but also, we're really going to start seeing a lot of changes in federal and state and even local policies, smart water plans that require net zero water strategies from builders and developers as they're submitting for permits.

00:53:38:28 - 00:54:08:05
Sara Gutterman: We're seeing exploding tap fees all across the country where I am in Colorado in the Front Range, we've seen a 400% increase in water tap fees and some municipalities, and we're also seeing growth in water rating programs like the Warriors program and then also water moratoriums in strange places like Bainbridge Island. It's an island, right? We wouldn't think that there would be a water moratorium there, but there is.

00:54:08:08 - 00:54:25:16
Sara Gutterman: So now, just because I know I'm getting late on time, I'm going to kind of go quickly through some of my housing market influencer data. For those of you who have heard me speak, every time I talk, I talk about millennials. So we know that these are the top influencers in the housing market and will be for a couple decades.

00:54:25:16 - 00:54:48:17
Sara Gutterman: So it's important to pay attention to them if you want to learn more. Again, we have tons of data on millennials. On our website. I've presented multiple webinars on millennial insights. But I think what's really important now is we're starting to see this rise of Gen Z. There's 78 million strong, right? Right now they command about 360 billion in spending power.

00:54:48:17 - 00:55:13:00
Sara Gutterman: But that's going to grow substantially over, you know, the next handful of years and even decades as their net worth increases. As I mentioned earlier, they're graduating college. They're starting to think about buying homes. This is considered to be a highly sensible generation. They value realism and safety and security. They do rely on social media influencers and YouTube.

00:55:13:02 - 00:55:42:17
Sara Gutterman: They're passionate about their concerns. A couple of numbers. 35% of Gen Zs believe that homeownership is out of reach, but 95% want to own homes because they believe that it offers economic independence and a sense of control. 41% are saving for a down payment, but 40% have student loans and credit card debt that they need to pay down.

00:55:42:19 - 00:56:15:29
Sara Gutterman: We have a lot of generational marketing insights that I think are really worth understanding. In fact, we're going to be giving a webinar on January 11th talking about the differences between generations. So, for example, you know, millennials and Gen Zs have a lot of similarities, but they're actually really different. And that's because, you know, millennials were raised during a time of relative economic growth and prosperity, whereas Gen Z's their childhood was marked by two crippling recessions, a global pandemic.

00:56:15:29 - 00:56:46:07
Sara Gutterman: So they tend to be a little bit more debt averse and budget conscious than their older peers. They say that they are experiencing stress and anxiety on a daily basis. You know, they want mental health addressed very openly in society and in the workplace. It's a very diverse generation. And, you know, equality is a guiding principle, and this translates into some pretty interesting things in terms of what they want in their homes.

00:56:46:11 - 00:57:20:15
Sara Gutterman: You know, they're looking for meditative spaces, sanctuary spaces, private gardens, places where they can find peace and solitude. So again, on January 11th, look for a webinar that we're presenting on generational marketing, and we'll have a lot more information about the rise of Gen Z, who they are, what they look like. We know that millennials and Gen Z's, their top purchase consideration is corporate sustainability, and they want to work for companies that align with their interests.

00:57:20:22 - 00:57:39:13
Sara Gutterman: Failure to mitigate and adapt to climate change is their number one global risk of highest concern. I wish that water was a little bit higher on this chart. Unfortunately it's not. I'm going to go through these slides pretty quickly just because I know we're getting to the top of the hour, and I do want to leave about ten minutes for questions.

00:57:39:16 - 00:58:03:04
Sara Gutterman: Millennials right now is that is the generation that cares the most about resiliency in their homes. You can see their the turquoise in the chart on the right compared to other generations. They have, you know, about over 50% have considered moving due to climate change, and almost 60% are concerned about climate change affecting the value of their homes.

00:58:03:07 - 00:58:41:05
Sara Gutterman: About 55% own a home, but over 80% want to own a home. So you can see there's still plenty of opportunity to sell homes to millennials. Most of them work. Or I would say, you know, the largest segment of them have want a hybrid model of remote work. Their ideal home at this point has actually grown a little bit, from 2 to 3 bedrooms to 3 to 4 bedrooms to accommodate for working and schooling from home, 2 to 3 bathrooms.

00:58:41:08 - 00:59:06:18
Sara Gutterman: Interestingly, the the this chart has changed over the last two years, as you can imagine. So the number of people that want to live in the center of the city has decreased. The people that want to live in suburban and rural markets continues to increase. Lifestyle preferences for millennials and older Gen Z, it's things like natural, back to earth, artistic.

00:59:06:20 - 00:59:48:24
Sara Gutterman: So you know it's again this very it's minimalist right. So those are just some topics. And again we'll go into a lot more detail in our generational marketing webinar in terms of kind of lifestyle preferences. But hopefully those terms give you a little bit of feel for what they're looking for. You know, they are willing to invest in heat pump technologies and solar panels and battery storage systems to make their homes net zero energy, as well as leak detection and water management systems and low flow plumbing fixtures to make their homes net zero water, over 50% would buy an electric home, and that number keeps growing.

00:59:48:26 - 01:00:26:16
Sara Gutterman: And that's because they want to primarily reduce their environmental footprint. Also, you know, about half say that an all electric home is a healthier home and a higher performance home. And you can see here that saving money is actually further down in terms of what they think benefits are of. And then other is the most common other response in this chart in terms of the biggest benefits to owning an all electric homeless, all of the above, you can see over 7,570% of our millennial and older Gen Z survey respondents feel good.

01:00:26:16 - 01:00:56:18
Sara Gutterman: They want to eliminate gas in homes. Energy efficiency in homes is a no brainer, as is solar panels and battery storage. And certainly, you know, certifications at this point do give them more confidence when buying homes. You know, over 90% are interested in having a healthy home that include indoor air monitors, air purification, fresh air exchange systems, etc..

01:00:56:21 - 01:01:34:00
Sara Gutterman: Outdoor living continues to be a thing with a number. One most important landscaping element is on site food production, and it's not so much, you know, the number one reason why millennials want to grow their own food is actually for self-sufficiency and resiliency. With that said, water conservation is very important when making decisions about outdoor spaces. Our millennial and older Gen Z survey respondents are buying smart home products primarily to improve energy efficiency and then to address security concerns.

01:01:34:01 - 01:02:04:16
Sara Gutterman: Again, saving money is further down on the list. They're using more, more smart home technology than they did a year ago. They're looking to buy 2 to 3 smart home products in the next 12 months. And those products are things like smart doorbells, energy monitoring systems, smart doors and windows, etc.. And then interestingly, the whole perception of prefab is changing.

01:02:04:19 - 01:02:40:15
Sara Gutterman: So our millennial and older Gen Z audience has a positive view of prefab because they can get homes faster and they believe that their higher performance and higher quality. And you can see they feel like prefab is not just more affordable, but more energy efficient, more sustainable, you know, again, healthier in terms of our builder audience. Again, they're corroborating that healthy home electrification, connected living are very important or extremely important to buyers.

01:02:40:17 - 01:03:21:29
Sara Gutterman: And there's kind of a general appetite to spend 1 to $5000 on things like solar PV, battery storage, demand side energy management technologies, etc. interestingly, over about 65% of our audience are actually selling and recommending PV and storage on their projects. That was higher than I thought, and I was really happy to see that we're seeing that builders, they are kind of similar to consumers in terms of 60% of consumers say they want to buy in all electric homes.

01:03:21:29 - 01:03:46:08
Sara Gutterman: 70% of our builders say that they want to sell an all electric home. And any questions about it has really just to do with, you know, grid tied energy costs and the cost of energy. Same thing here. Pretty similar drivers in terms of why consumers and builders would switch to all electric, reducing environmental footprint, creating healthier, higher performance homes.

01:03:46:10 - 01:04:21:15
Sara Gutterman: Again, money is lower down on the list. And then again, very similar in terms of, you know, heat pump heating and cooling technologies, induction cooktops, solar systems in terms of what builders think consumers will spend to convert to all electric. So wrapping up and thank you for bearing with me. I always go over time. I'm sorry. Despite rising interest rates and uncertainty about future market conditions, the housing industry experts that I am talking with still remain cautiously optimistic.

01:04:21:16 - 01:04:44:08
Sara Gutterman: In fact, most of them really think that right now we're just experiencing a right sizing that is really a stabilization that will bring the pace and the costs of the housing market back to Earth after just a crazy pandemic. But with that said, you know, the housing market has been changed for good, right? So Healthy Home is at the front forefront of our national dialog electrification net zero.

01:04:44:08 - 01:05:16:13
Sara Gutterman: But you know, the veil was also yanked from the housing sector's dirty little secret, which is really this, you know, vast white space in that kind of attainable, priced missing middle home segment with a massive pent up demand. And, you know, with millennials and older Gen Zs, you know, hitting their peak home buying potential, the mushrooming demand for that missing middle homes is really expected to bolster the sector, not just for years, but perhaps for decades to come.

01:05:16:15 - 01:05:48:23
Sara Gutterman: And as today's home buyers are forcing the conventional building industry to transform rapidly, you know, they are demanding these homes that are net zero electric, healthy, resilient, connected, solar powered, but also cost effective. So there's lots of dynamics to to unpack there. And, you know, while demand will remain at a record high, I believe, you know, the supply of the types of homes that today's home buyers want is falling woefully short, right?

01:05:48:24 - 01:06:20:24
Sara Gutterman: So, you know, the types of homes that were acceptable to Boomers or Xers are just downright medieval to the younger generations, you know? So we're really going to have to think about, you know, how we can satisfy and solve for today's home buyers needs. And, you know, that's particularly important because, you know, the marketplace is changing. You know, I think that there's a new sense of agency that a lot of people, particularly those younger generations, have over their lives.

01:06:20:25 - 01:06:52:14
Sara Gutterman: Right. So I think that the pandemic and, you know, economic fluctuations, it really shifted their attitudes about work and remote work and income and quality of life and what they value. And I think that, you know, scarcity and material shortages, distribution delays, austerity regulations and laws and sustainability are really driving kind of this nature, positive movement and having consumers rethink what they need, what they want, and measure their consumption.

01:06:52:16 - 01:07:18:04
Sara Gutterman: I think the rise of the metaverse is kind of interesting as well, because that's creating new places to interact and create and consume and earn and converge. And you know, it in and of itself is converging the physical and the digital world with a shared experience. So we'll see how that changes the home buying experience and also quality of life I think also increasing skepticism.

01:07:18:04 - 01:07:47:27
Sara Gutterman: So demand for greater transparency and accountability. There are pretty low levels of trust with soaring fears around misinformation and personal safety. That's, you know, kind of creating growth in conscious consumerism with, you know, kind of an ethical and sustainable focus. And that's also, you know, leading into these younger generations, which are very values based and mission driven. So there's this growing humanism in the workforce and also a greater acceptance for self care.

01:07:48:01 - 01:08:12:05
Sara Gutterman: And all of that is translating into these changing homebuyer preferences, particularly around health and wellness in the home, and then also self-sufficiency, self-sufficiency and resiliency to protect family, you know, security. And my last slide is, you know, again, there's there's a lot of shifting in conventional thinking. Right? So with with respect to our homes, you know, bigger is not better anymore.

01:08:12:12 - 01:08:42:20
Sara Gutterman: Rather home is the new sanctuary. You know, there's this shift away from, you know, upfront cost to homeowner value or what's the cost of a good quality of life and homeowner experience. You know, certainly, I think that today's homeowners value energy efficiency and electrification and all those things we've talked about and the shifting brand loyalty. So with that, I'm going to wrap it up.

01:08:42:25 - 01:09:11:05
Sara Gutterman: Mike. Let's let's have about five minutes of questions. I apologize, I went on, I tried to keep it short, but that's apparently my M.O.. Here's my email address. So if if we don't get to any of your questions today and you want to email me, please shoot me a note. Happy to to answer your questions via email. We will be sharing not the slides, but the link to this webinar so you can listen to it again and again and again if you want.

01:09:11:11 - 01:09:32:15
Sara Gutterman: And last but not least, thank you so much to Mike and Mary, to all of you for attending and particularly to our sponsors, Provo, whirlpool, culture Stone and Powershift by NB energy. Really appreciate your ongoing support and partnership. So Mike, fire away rapid fire because we got about five minutes okay.

01:09:32:17 - 01:10:11:26
Mike Collignon: Yeah. If anybody does have any questions please send them in. I, I do have one from Andrew. It's an interesting one. I don't know how how quickly you can answer this one though. He's positing that from a M.R. standpoint, electromagnetic radiation standpoint, all electric home is not a healthier home. And his elaboration on this is that those electromagnetic fields caused by a higher number of electric powered appliances, those who have electrical sensitivities, can't even enter the kitchen sometimes.

01:10:11:28 - 01:10:18:11
Mike Collignon: And so do you want to talk a little bit about the the concerns there with EMF and EMR?

01:10:18:13 - 01:10:39:07
Sara Gutterman: Yeah. So you know, I hear this from time to time from a variety of people in terms of, you know, what's better? What's the lesser of evils, frankly. And the truth is that I don't really have an answer, I wish I did. You know, this is it's a debate. I think it's probably going to become a growing debate, as we do shift to electrification.

01:10:39:07 - 01:11:03:13
Sara Gutterman: And I think, you know, it's a very complex answer or set of answers, because on one hand, you know, what are we talking about? Are we talking about the health of the planet? And if so, then electrification, the electrification of the built environment powered by renewable energy that helps to increase the health of the planet. Right. We can follow that line of reasoning.

01:11:03:16 - 01:11:31:26
Sara Gutterman: With that said, I understand the question about, you know, the personal human occupant impact of those electromagnetic fields and waves, and I don't know the science of it. I don't know that that we actually have long term data that shows the the real impact of those electromagnetic fields. I know there is an impact. I know that there are people that are more sensitive.

01:11:31:26 - 01:12:04:03
Sara Gutterman: I actually myself am fairly sensitive to them. But I think that my very real and short answer is, I think we're going to have to wait and see on that and see, you know, as more people live in fully electrified homes, you know what those human health impacts are now, electrification is not a new thing, right? I mean, there are there's a a good portion of homes, particularly in the South, that are all electric.

01:12:04:05 - 01:12:35:06
Sara Gutterman: And so, you know, this isn't a new concept, but I do understand that as we continue to introduce more technology into the home, more connected technology into the home, we're going to have to be aware of and sensitive to, you know, the health impacts of those electromagnetic fields. Other than that, I don't have a better answer. Mike, do you have a better answer?

01:12:35:08 - 01:13:08:05
Mike Collignon: Well, I was going to say I wonder how rigid some of the regulations or ordinances are written, because if you look at it purely from a code standpoint, you can get a variance to building codes. If the local building official allows or approves a certain technique or product or practice, then it's allowed. And so I wonder, Andrew talks about having been able to offer the choice.

01:13:08:07 - 01:13:34:04
Mike Collignon: I almost wonder if you're able to and I don't. Again, I'm going to kind of plead ignorance on some of these issues like you are. Sarah. If you can almost provide some sort of evidence, some sort of documentation from a medical professional that says, hey, look, this is a real concern for me from a physical health standpoint. Not just I don't like this stuff, but a physical health issue here.

01:13:34:06 - 01:14:01:07
Mike Collignon: I wonder if that would satisfy and say, okay, you know what? Yeah. You're right. Let's, let's let's create a variance here to where it doesn't have to be an all electric home. Now, the challenge may come in thinking that through further is are you going to be able to find some products, you know, if a lot of the product lines start going to all electrification, will you be able to find non-electrified products or not?

01:14:01:08 - 01:14:09:27
Mike Collignon: I don't know the answer to that. Maybe on the second hand market you could, but but just just kind of spitballing out there.

01:14:09:29 - 01:14:31:05
Sara Gutterman: Yeah, it's a question that's coming up enough that I will commit to, to do some research on this so that next time I am asked or if was it Andrew who asked a question, is that. Yeah, yeah. Andrew, if you want to shoot me an email about it, I'll do a little research and see if I can find a better answer than I was able to provide today.

01:14:31:07 - 01:15:08:02
Mike Collignon: You know, I think the one thing I wanted to point out, Sarah, a little bit tied to this, but but different is the survey talks from a perspective of a home buyer from a builder. I wonder for our industry how we are going to be able to help the utilities meet the challenge of electrification. I say this because I am the coauthor of every ordinance for my community, and I spoke with the utility here asking, hey, is this going to pose a problem to you?

01:15:08:02 - 01:15:34:16
Mike Collignon: And of course they were. No, no, no, it's going to be fine. We have a duty to serve, which is an actual phrase that has significance and meaning, not just sounds good, but as a local lawyer who I've been working with to write the ordinance said to me, do you deserve simply means eventually. So it could pose some problems to some utilities.

01:15:34:16 - 01:16:00:13
Mike Collignon: If you start putting a bunch of EV chargers into homes and moving even further beyond that, are they going to be able to keep up from an infrastructure standpoint with, you know, different lines and panels in the home? It's just it'll be interesting to see how they meet the challenge because they're going to have to.

01:16:00:14 - 01:16:29:14
Sara Gutterman: So yes, indeed. And you know, the truth is what we're finding is that when we are working with whether it's homeowners or builders, especially of homes and existing communities, that this transition to electrification is a bit problematic and that infrastructure is not adequate, whether that's transformers or electrical panels. And, you know, as I said earlier, you know, there's a big silver bullet question about who's going to pay for these upgrades.

01:16:29:17 - 01:17:10:01
Sara Gutterman: And, you know, I think that there will be some federal funding that goes to utilities through the infrastructure bill and the Inflation Reduction Act. Again, we're still waiting to see how those funds are allocated in general, but specifically to utilities to help support the upgrade to infrastructure. That absolutely needs to happen, because if you think about the energy demand and the electrical demand, as homes transfer over to all electric as they add electric vehicles, you know, our existing infrastructure, you know, in most jurisdictions and municipalities and for most utilities is not adequate.

01:17:10:03 - 01:17:43:07
Sara Gutterman: And that's why it is so important to while we are shifting over to electrification, to also simultaneously do things like implement demand side energy management technologies and systems, have, you know, vehicle to grid technology where vehicles can, you know, be a source of power, battery storage, in addition to having on site battery storage, either at a home level or a community level, and also to have that two way or bidirectional conversation with utilities.

01:17:43:07 - 01:18:24:02
Sara Gutterman: I say conversation, but it's really, you know, peak load shifting, peak load shedding, you know, and being able to optimize time of use not only to save money for homeowners, but also to reduce grid stress, you know, at the utility scale. So all of these things need to happen together simultaneously. But, you know, again, to just respond to what you were saying, you know, in many in many markets, you know, current infrastructure is not sufficient for full scale electrification of the existing built environment.

01:18:24:10 - 01:19:08:02
Sara Gutterman: We are starting to see some communities. In fact, KB homes just announced two communities in Menifee, California that basically are their own microgrids and optimize energy use amongst the homes in the community. Before that, energy even hits the grid again to not only save the home buyers money, but to reduce grid stress, and also to provide that layer of resiliency and self-sufficiency on a community scale, which, as we know, is becoming more and more important across the country, but particularly in California, as they're experiencing more brownouts and blackouts and wildfire events and things like that that are taking the grid down.

01:19:08:03 - 01:19:09:13
Sara Gutterman: Oh.

01:19:09:15 - 01:19:22:29
Mike Collignon: Well, that's the thing, you know, to build to net zero energy and even net zero water. I mean, you know, you're demonstrating it there with Mariposa and Meadows. I know of a couple other people who are doing it as well. It can be done. It's not impossible.

01:19:23:02 - 01:19:54:15
Sara Gutterman: Well, and actually, let me let me give a shameless plug to our housing 2.0 program, of which, Mike, you are the superb program manager. It's our kind of building professional training education program taught by building industry luminary Sam Raschke. In. And Sam teaches building professionals and developers how to build homes and communities that are sustainable net zero while electric.

01:19:54:15 - 01:20:17:12
Sara Gutterman: All these things we've been talking about at a lower cost because, you know, a you know, he's able to share how to design in sustainability and all of these different elements from the very beginning. So again, go to our website under the housing 2.0 tab. We're doing live and virtual events next year. Check it out. Sign up. It's free.

01:20:17:15 - 01:20:22:20
Sara Gutterman: So you can't it's you know it's you can't can't lose.

01:20:22:23 - 01:20:31:25
Mike Collignon: And I'm going to put a link to that in the chat as well. I put a link earlier to Mariposa meadows and to your decarbonization webinar soon.

01:20:31:27 - 01:20:35:22
Sara Gutterman: Thank you. Thanks, Mike I appreciate it.

01:20:35:25 - 01:21:01:05
Mike Collignon: No problem. All right. See, no other questions. I want to thank Sarah for sharing all these wonderful insights with us today. Very much appreciated. And I know the audience enjoys it too. Now got to make sure to thank not just the audience. Thank you for attending, but also our wonderful sponsors. Pro via Powershift by envy, whirlpool and cultured Stone.

01:21:01:10 - 01:21:23:10
Mike Collignon: Thank you for your generous sponsorship today. That does conclude our webinar series for 2022. Thank you so much for joining us. Not just today, but throughout the entire year. Yes, I do look at attendee names and I see some of you more than once. Look for information for Green Builder Media on that January 11th webinar that Sarah mentioned earlier on generational marketing.

01:21:23:13 - 01:21:38:06
Mike Collignon: I sure hope you'll join us then. On behalf of myself, our wonderful producer Mary Kestner, who hopefully is blushing right now, and everyone at Green Builder Media. Have a happy holiday season and a wonderful New year. Stay safe, stay healthy and take care.