Geothermal heating

[Dee Lucas]

I would like to know if anyone has come across geothermal heating and what adjustments they have found with the system. I have not run into this type of heating and therefore do not know if there it is a recognized system at this time and if there is an adjustment % or otherwise that is shown on your appraisal.

Also, if there is, are these systems on SFR, or units? if units, at what point are they showing?

It's a very expensive heating system and I don't know if the market recognizes it yet.

Thanks,
dee lucas

 

[appraisalondemand]

Dee,
This past week I appraised my second SFR with geothermal heating. Both times in has been rural settings that had limited comparables to begin with. It is very expensive start up cost, but a yearly savings that is the unmatchable. Both times, I mentioned the heating/cooling method, but could not find any comparables with similar heating. Therefore, I could not make an adjustment because I do not know what the market reaction is yet. In both cases, the subject were mostly superior in quality to neighborhood, and I had to find atleast one comparable that matched the quality of the subject and made a quality adjustment for the other comparable(s).

 

[Wayne Tomlinson]

GeoThermal heating is a very efficient heating/cooling system. They have become the system of choice in my local area. It can depend somewhat on electric vs other fuel sources.

On a 2000 sq ft home in my area, it seems to run about $15,000 to $20,000 for the installation. Deduct the cost of the conventional split system, and you have the additional cost.

I did an appraisal, before and after for a new installation on an old farm house which had a perfectly good hot water system and window A/C. The house was about 2000 Sq Ft, with about 900 upstairs. About 90 years old/

Cost then was $14,000. I have done some follow up on it with the owner. He has kept good records, and is really very happy with it. In addition to having the central A/C equal up and down, his cost of operation is about one third of the previous. He only had one years experiance with the old system.

In this area, the Rural Electric Co-op is giving a $500 rebate to new Ground source heat pump users.

At a seminar I attended several years ago a professor from Oklahoma State who was doing a lot of work with these systems, talked about a system which was installed either in northerm Michigan nor Wisconsin in which the buried lines were installed too shallow and froze up, and there was not enough heat to thaw them out in the following summer. I never heard anymore of such.

Many systems here are installed with the circulating lines being installed in drilled holes some 300 feet into the ground. They could even be drilled down in the basement or crawl space with no outside lines.

A good sysem when properly installed.

They have added value here in Western Illinois.

Wayne Tomlinson

 

[stefan olafson]

Up in Northern Minnesota it gets kind of cold in the winter -20 to -45 below and right now it's about 95 above! We have seen a rather large increase in the use of Geo-Thermal. There typically is a rebate offered by the area Rural Electric Cooperatives, and it will save you money if you own the property long enough.

The cost approach is quite simple, just find out the cost of the system, subtract the amount a typical system costs and you then have depreciation (probably either functional or external) to the property. Without sales data on other property with the systems, it's a shot in the dark as to value, you have to take it from the market.

By the way, my wifes church a large catholic church on the National Register of Historic Places is really considering quite a bit about installing a geo thermal system for the church, school, and parish house. Cost is rumored to be at or over $500,000, but there are over 1,500 parishoners so it could be done quite reasonably.

 

[Ray Miller]

I would like to know if anyone has come across geothermal heating and what adjustments they have found with the system. I have not run into this type of heating and therefore do not know if there it is a recognized system at this time and if there is an adjustment % or otherwise that is shown on your appraisal.

Also, if there is, are these systems on SFR, or units? if units, at what point are they showing?

It's a very expensive heating system and I don't know if the market recognizes it yet.

Thanks,
dee lucas

There are several different types of geothermal heating system. I have not made any adjustment for them yet. I don't think the market has been tested enough to say there is a difference.

We are considering some form of geothermal heating for our new home. But from the research we are conducting. It may be priced out of our market for now, for the simple fact it may cost us 30 years to recover the real cost over saving of the system. That would mean I would need to live beyound 90 in that house to make it pay for its self. Not even sure the system could last the 30 years.

I am really thinking about moving to Yellowstone and build over a live steam vent. there would be a built in saving. Except for the fact that Yellowstone might blow it top any day now and that would force me to move again.

:mellow: ​

 

[Bobby Byrd]

I've seen 1 in the past 4 years. Never found another sale with one, all I remember is that the owner said it was pricey to put in and pricey to fix.

 

[Restrain]

The ones I have seen cost about $7500 more, primarily for the well. It's basically a water circlulation unit, and this type of unit has been around since the dawn of AC. The ROI is significant, especially with rising utility rates. A cap of the savings should give you the value differential.

 

[Mike Boyd]

I am really thinking about moving to Yellowstone and build over a live steam vent. there would be a built in saving. Except for the fact that Yellowstone might blow it top any day now and that would force me to move again.

:mellow: ​

Not to mention getting blown up in a gush of steam! Ray, you kill me!!!

 

[Mike Boyd]

Any appraisers in here from Klammoth Falls Oregon? I have heard all the homes in the entire town are heated from natural geothermal wells.

 

[Richard Carlsen]

We see geothermal 5 to 8 times a year. Due to being in an area where water is highly accessible (wells under 150 feet normally) and water disposal easy either by run off or pumping back into the sub strata, geothermal is becoming more popular. The closed loop system is also one of our options due to the large sites that are available. It takes about 400' of loop below the frost line to run one efficiently.

Costs are fairly high ($12,000 to $18,000) but the payback time over LP, fuel oil and even natural gas is not extreme. In addition, the geothermal both heats and cools. We are finding more and more retirees and people from downstate market moving into our market for whom AC is a way of living and expected in their housing. Not having AC is becoming a slight market drawback despite the short season of use.

Lacking hard data due to the limited number of sales, my best estimate is that on a typical $150,000 to $250,000 newer house, geothermal market appeal is about $5000 to $8000 over conventional forced air systems. Over HW baseboard, you have to include the AC element to these numbers.

Bottom line is that geothermal heat/AC, once you get by the higher cost, makes a lot of sense in our region.