The Relationship Between the Rising Price of Oil and Gas and Real Estate - Part 2

Today we would like to discuss how oil and gas prices will impact heating systems in new home construction, and also in converting heating systems of older homes to more energy efficient technologies.

As of late heating systems have been much more prevalent in my conversations with Buyers as they are weighing all of their options. With rising gas and food prices, home heating and cooling costs are more significant in the minds of Buyers. Already for the past year or more builders are putting in heat pumps with electric forced are furnaces in the higher end homes. This is by far, according to heating contractors, the most cost effective technology available to consumers today for heating and cooling. I am already making significant adjustments when I am analyzing homes for the purpose of Comparative Market Analyses based on their energy efficiency. Of course those homes with heat pumps deserve a significant credit as opposed to those that are much less energy efficient.

There is also the option of installing electric baseboard heating in rooms that are remote from the main core of the house, or are seldom used so that they are kept at a
minimal temperature except when in use.

For older homes or those with relatively inefficient heating systems, upgrading to a heat pump can be challenging. If a ducting system already exists throughout the home, it is a much easier conversion as the furnace and ducting are already in place, and therefore it is a much simpler process to install a heat pump unit.

However, in homes with electric baseboard heating, or in-floor or radiant heating, there are no ducts. This becomes a major project where head room, walls, valances etc. become strategic problems as an entire ducting system must be installed. In this scenario the home owner must be careful to calculate what energy cost savings may be recovered taking into account anticipated rate increases, versus the cost of the improvement. One should also consider the added market value, and how long they intend to stay in the house to reap that incremental market value.

Best Regards,
The Debbie Simmonds Lifestyles Real Estate Team