Natural Gas Heats Up Real Estate Market in Massachusetts

Based on a new survey of realtors in Massachusetts, natural gas heat wins over prospective home buyers. According to the survey, more than half of prospective home buyers strongly prefer properties with natural gas heat over those that use heating oil.

Respondents said that only 3% of buyers would insist upon natural gas heat as a condition of the sale, but buyers’ strong preference for natural gas heat shows that heating costs may be a partial driver in the decision to make an offer, and may also help sellers get better prices for their properties.

Interestingly, the survey also showed that 70% of sellers said they would not provide any buyer incentives or accept price reductions for homes that were heated with heating oil. That refusal could translate into longer listing periods for those homes, which could, in turn, trigger price reductions in a home’s asking price that exceed the cost of converting from oil to natural gas.

The cost of heating a home with natural gas is currently significantly lower than the cost of heating with oil. Current per-gallon prices for heating oil in the Boston area are averaging between $3.65 and $3.70 per gallon. Average heating oil prices in central Massachusetts are slightly higher.

Homeowners can expect to use about 800-1,000 gallons per heating season to heat an average sized home, assuming average winter temperatures. Typically, oil burners are somewhere between 50% and 80% efficient. Lower-efficiency heaters will require more heating oil. At $3.65 per gallon, the homeowner who uses heating oil can expect to spend between $2,900 and $3,650 to heat the average home this winter.

By comparison, converting to natural gas heat can save more than $1,000 in operational costs alone in a single heating season, and homeowners can also take advantage of rebates available through the utility companies to lower the cost of installation. In addition, some federal tax breaks for installing high-efficiency home heating products have recently been extended. Taking advantage of these tax breaks can also lower the cost of converting to natural gas.

For the home seller, the switch to natural gas is an obvious selling point. Buyers have expressed a strong preference for heating with natural gas, so a home that’s already been converted may sell faster and command a better price. In contrast, buyers may balk at paying the asking price for a home that uses oil heat, especially if they plan to convert the heating equipment to natural gas after the sale.

Taking into account the reduced cost of operating a high-efficiency gas heater along with rebates and tax breaks, the conversion could pay for itself in as little as a single season, and that doesn’t even take into account any pricing premiums the seller may be able to get.

If you’re thinking about selling your Boston home, oil-to-gas conversion may be one way to set your home apart from other properties on the market. For more information about oil to gas conversion, or to learn about rebates and tax breaks that you may be able to take advantage of, contact Boston Standard Plumbing & Heating at (617) 288-2911. We’ll be happy to consult with you and provide an estimate of how much a conversion will cost, and what you can save by making the switch now!