Is there such thing as a 'green bubble', and if so, will it burst like the real estate bubble?

Is there such thing as a ‘green’ bubble?

Filed Under green bubble, green housing |

Today I was reading on Inman News, and one of their quick polls attracted my attention. It was entitled “What will be the next bubble to burst?” Although only about 18 had voted when I viewed the poll, which is not indicative of any widespread opinion, the results showed that the real estate bubble having burst already, the “green” bubble will be the next in line.

I’ve really liked the idea of “green” products and “green” housing, but this poll made me step back and think about it a little bit. Is it more than just a passing phase to all of us? Will I be as concerned about it in 20 or 30 years? My conclusion is that environmental friendliness will never go out of style, although we may cease to label everything “green” that helps the environment. I think the energy efficient lifestyle is a trend or a novelty to some people, but a permanent way of life for others. There really is no ‘bubble’ to those who truly care about the earth and will continue to live their lives according to those principles.

As energy efficient products are used on a wider scale, their general usage will establish them as the norm and prices will decrease. It would make no sense to me for any company who has established an energy efficient line of products to stop making them. Of course, the consumer will dictate if it makes sense for the manufacturers to make them, but as prices drop, why would consumers not buy a product that saves them money on their energy bills? They’re just smarter products. Why revert to energy hogs?

Some products may never drop to the price levels of thier non-green competitors. Cleaning products, bags, clothes, etc. may always cost significantly more to produce, so their price will remain higher. But I still think some people will buy those products. They are very popular among certain demographics.

You can’t compare other bubbles, such as the real estate bubble, to a so-called ‘green’ bubble. Housing and hybrids are two entirely different things. My prediction is that we’ll see more labeling of products as ‘green’ and energy efficient as time goes on, until they become commonplace. There will be holdouts, just as there are Ford F-350 owners who will never buy a Prius, but the Prius and its green friends will continue to thrive.

Tags: green bubble, green housing, energy efficient, real estate bubble, environment

Comments

4 Responses to “Is there such thing as a ‘green’ bubble?”

Heather Rankin on April 28th, 2008 7:41 am

Good take on the Inman article. Living at Lake Powell we have been the focus of a lot of “off the wall” environmental protests.

People who would like to see Lake Powell drained, I hope would be the ones to go remove everyone from Phoenix to San Diego (or at least turn off their faucets)

There must be a middle ground. I think you hit the nail on the head when you said the “green” products will become commonplace. Our grandkids will think of “green” much like our kids do of technology ~ it’s just there and they have a hard time relating to when it was not.

Cheers!
Carnival of Real Estate Investing: It’s Back, 88 Times Over! | Real Estate Investing for Real Blog on April 28th, 2008 9:28 am

[...] Is there such thing as a ‘green’ bubble? by Nathan Blair [...]
Ideal4Investors on April 29th, 2008 4:13 pm

Great article!

Green products need to make common sense and economic sense before most Americans will utilize them. Light bulbs that save energy and save you money makes sense. Replacing the old windows in your house because it will cut your heating bill & AC bill makes sense. Driving a fuel efficient cars when gasoline is $4 a gallon makes sense.

What doesn’t make sense is paying $5,000 - 7,000 more to buy a hybrid version or your car or paying 3x more for toilet paper that feels like the cheap napkins you get at a fast food joint.
Nathan Blair on April 29th, 2008 4:47 pm

Heather,
I agree. Isn’t it interesting how that works - huge flat screens are just expected these days. When I was a kid…

Ideal,
Yes, I’ll stick with my Charmin two-ply.