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!

Massachusetts Tops List Of Most Energy-Efficient States

In a new report authored by the American Council for an Energy-Efficient Economy (ACEEE), Massachusetts was named the most energy-efficient state for the second year in a row. The report ranked states in six major areas, including utility and public benefits programs and policies; transportation policies; building energy codes; combined heat and power (CHP) policies; state government-led initiatives around energy efficiency; and appliance and equipment standards to determine which state should receive the top honor. The ACEEE also recognized California, New York, Oregon, Vermont, Connecticut, Rhode Island, Washington, Maryland, and Minnesota as highly energy-efficient states.

Massachusetts governor Deval Patrick cited the state’s efforts to reduce dependence on foreign energy sources and its pursuit of sustainable energy sources as key factors in the state’s overall efficiency rankings. In addition to making the state more energy-independent, the governor also stated that the Green Communities Act is contributing to the state’s employment rate and the overall health of its economy.

According to the report, most states are making some progress toward improving energy efficiency, with electricity efficiency receiving the most funding. Another area of interest to consumers and one that contributes significantly to improved energy efficiency is oil-to-gas conversion. The cost of heating oil is expected to rise significantly over the 2012-13 winter heating season, with many analysts predicting a per-gallon fuel price that will approach $4.50. In contrast, an abundant supply of natural gas has driven the price of that commodity to a 10-year low. Consumers in Massachusetts could not only improve their energy efficiency by switching to natural-gas fired heating equipment, they could also save an average of nearly $2,000 in heating expenditures over the winter.

Boston-area homeowners can still take advantage of 0% financing programs offered by MassSave on the purchase of certain high-efficiency furnaces. MassSave will make as much as $25,000 available to qualified borrowers on a “same-as-cash” basis. Earlier this year, homeowners were also offered the opportunity to receive huge rebates on high-efficiency gas-powered replacement boilers.

If replacing your heating equipment isn’t in the cards, you can still improve the efficiency of your current system with a program of regular maintenance and inspections. Clogged filters and dirty heat exchangers can significantly reduce the efficiency of forced air furnaces. Boilers should also be inspected and should undergo routine maintenance to ensure proper operation before every heating season.

If you would like more information about high-efficiency heating equipment, 0%-financing through MassSave or an oil-to-gas conversion, contact us at Boston Standard Plumbing and Heating at (617) 288-2911 anytime. We can arrange an on-site inspection of your current heating equipment and explain all available options. We also perform regular seasonal maintenance and provide repair services for most types of heating equipment.

Selling Your House? Invest In Your HVAC

Home remodeling companies will tell you that the best investments you can make in your home will be in the kitchen and the bathroom. You might just want to add the basement to that list. If you’re selling a home in Boston, residential heating and cooling equipment may turn out to be more important than other features prospective homebuyers may have valued in the past. That’s because buyers are entering the market only cautiously, and homes that are ready to lower the owner’s total cost of living are becoming significantly more attractive to potential homebuyers.

How can you improve the chances of selling your home? Take a good look at your heating and cooling equipment. If your home currently has an oil-fired heating plant, consider converting it to natural gas. The lower cost of operating natural gas furnaces and boilers is overwhelmingly attractive right now. But buyers are looking at more than out-of-pocket costs to operate the equipment.

Natural gas and heating oil are about equal from an operational perspective, but oil-fired heating equipment carries an inherent risk of spilling. The seemingly ever-increasing cost of heating oil, onsite storage and the cost of extra insurance for oil-spill related accidents could be a showstopper for potential buyers. If you have the cash available, convert. You’ll also get extra points for being able to say your home has a brand new furnace or boiler.

Old air conditioning or no air conditioning provide two more reasons for buyers to look past your home. New, high-efficiency air conditioners can be very economical to operate and can also be more environmentally friendly than older models. Older model air conditioners use older refrigerants, which – depending upon what you need – could be in short supply. Buyers who are looking ahead may see high replacement costs in their future.

One economical alternative for old systems or homes that have no air conditioning may be a mini-split AC system. These systems are highly cost-effective, provide zone cooling and install quickly. They can also solve other problems like those posed by ductwork – or lack of it! Some homes – especially those with hot-water or steam heat – may not have ductwork to begin with. Other homes may have ductwork that’s been compromised by asbestos or other hazards. The mini-split alternative provides excellent cooling with none of the retrofit hassle of a whole-house air conditioning system.

If you’re thinking about selling your home and you’d like an assessment of your home’s heating and cooling equipment, please give us a call at Boston Standard Plumbing & Heating at (617) 288-2911. We’ll be happy to evaluate your current heating and cooling equipment or consult with you on an oil-to-gas conversion.

Boston Heating Assistance Program On The Block

In the last several posts, I’ve focused on home heating and the pros and cons of using heating oil versus natural gas. For some Bostonians, simply getting through the winter with any heat at all is their primary concern. A program that helps low-income households in Boston and other places around the country may lose federal funding in the coming days or weeks. In the short term, Boston heating assistance is necessary to help people get through the winter, but the cuts really underscore the need to move households to more efficient, more cost-effective heating sources.

Unfortunately, homes in the Northeast still use heating oil. Over the course of the winter, the average home uses more than 1,000 gallons. At the current price – about $3.50 per gallon – the cost of heating for the winter will run about $3,500. If you heat from October through April, the cost averages about $500 per month, all things being equal. It’s easy to see why the energy assistance programs can mean so much to people who need help!

The MassSave program, which I’ve talked about in the past, can help replace old heating oil systems with cleaner, more efficient natural gas systems. In some cases, homeowners can qualify for a 0% loan over seven years to repay the cost of converting. This year, homeowners may also be able to take advantage of some remaining federal tax credits that could further reduce the cost of conversion.

The reduction in monthly expenditures for heat, combined with the zero-percent financing can help low-income households achieve significant cost reductions for heating. The good thing about the MassSave program is that unlike heating assistance programs, homeowners at all income levels can take advantage of this conversion assistance.

One of the real concerns about working with heating oil is the potential for a heating oil spill. As these heating oil systems age, the potential for a significant spill increases. At some point, only the oldest (and most dangerous) systems will remain in service, further increasing the likelihood of an accident. That’s why it is important to take advantage of the current programs in place to convert from oil to gas. Converting now will eliminate the risk of an oil spill from aging systems, reduce the cost of converting from oil to gas significantly and reduce operating costs into the future.

Home heating assistance may be a viable way to get through the winter, but converting from oil to gas is a longer-term solution for Boston home heating. If you’d like more information about converting from oil to gas, or about the MassSave program requirements, please contact us at (617) 288-2911 for a consultation.

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Heating Oil Versus Natural Gas Heat in Boston

As the fall weather turns cooler, for some homeowners in Boston, heating their homes in winter is becoming a big concern. The cost of home heating oil continues to rise, and many people who use it are considering the switch from oil to gas. How do oil and gas compare, and what are the options for homeowners who are considering a switch?

From an emissions standpoint, oil and gas compare quite favorably. Both fuels release about the same amount of carbon into the air – not much. Both oil-burning and gas-burning devices are chimney-vented. The potentially harmful emissions are routed up the chimney and into the air, away from the home. Chimney concerns do motivate a lot of conversions, and I’ll talk about that next week.

From a cost standpoint, natural gas is the big winner. The price of home heating oil is currently about $3.35 per gallon in Boston. Heating oil is a commodity, so this price varies daily throughout the season. While there have been periods of time where home heating oil was less expensive than natural gas, we haven’t seen them anytime recently. Home heating oil costs have risen about 35% in the last 12 months, while the cost of natural gas has actually dropped by about 2%. For a given space, heating with natural gas will cost about 2/3 as much as heating the same space with heating oil.

From an environmental standpoint, each type of fuel poses its own dangers. Heating oil can be very dirty, and a leaking tank can cause a lot of environmental damage. Tanks must be inspected periodically, and a leaking tank must be replaced to avoid further contamination. Oil is considered a toxin and exposure to petroleum-based oils and vapors can cause respiratory and skin problems. Natural gas is explosive, and leaks can be deadly if the leaking gas is accidentally ignited.

Maintenance on oil-burning heaters is an absolute requirement to preserve the efficiency of the device. Even a small amount of soot or residual material on certain components in the system can significantly reduce their efficiency, which translates into higher operating costs.

Gas-fired heating equipment also requires regular maintenance and inspection. The highest rated equipment can be about 95% efficient under optimal conditions. Very high efficiency furnaces have a relatively short life expectancy, so proper maintenance is critical.

Heating oil is regularly available in the northeast. Homeowners usually buy oil from a service company, or have an oil contract that provides for periodic refilling. Natural gas is also readily available from utilities in the Boston area. Gas is delivered via the gas company’s infrastructure, so no gas reserves are stored on the premises.

Overall, natural gas is significantly cleaner to work with, cheaper and environmentally more friendly than heating oil. Next week, I’ll talk about chimneys and the benefits of direct venting. In the mean time, if you have questions regarding home heating oil, natural gas or would like a consultation on oil-to-gas conversion, please contact us at Boston Standard Plumbing & Heating at (617) 288-2911.