If you're looking at housing in New England, you may occasionally come across homes from the (two) great oil shocks of the 70's. It seems like ancient history today, but when oil prices became a concern to the home buyer, builders responded, and in this case they responded by building homes that were heated by electricity, and not oil.



How does Electric Heat Work?

There are two types of Electric Heat, there's Electric Baseboard heat and Electric Radiant Heat. Both systems work by running an electric current through a resistance wire, which heats up. With Electric baseboard, the heated wire is behind a metal housing, attached to the wall where the baseboard is. Just like with forced hot water, it heats the air and as the air rises into the room, cool air rushes in underneath the vent, and the convection current helps to heat the room quite quickly. With Electric Radiant Heat, the resistance wire is embedded in either the floor or the ceiling, and it tends to heat the floor or ceiling, which then warms the air. While not as fast as electric baseboard, the warm floors created by radiant heat do have their advocates! (Today, when people want warm floors, they still use electric radiant heat or more complex systems of embedded hot water.) Most Space Heaters are also electric, and while they are as easy as plugging in a lamp for extra heat, can be expensive to operate and some require good ventilation to keep from overheating and potentially starting a fire.  Space heaters are generally not recommended as permanent solutions to heat your home for these reasons.



Advantages/Disadvantages of Electric Heat

There are some advantages to electric heat. First, just as it did in the 70's, it provides an alternative to oil, and is available everywhere, unlike gas. With the recent rise in oil prices to $4.00/gal, the difference between heating your home electrically and with oil is not as large as it use to be. The other advantages are that there is no "heat system" to fail, no burner or boiler to service, and that reduces long-term capital costs on your home. It is also very cheap to repair or replace, should a section of baseboard fail. (Fixing radiant heat, in the unlikely case that it breaks, is far more difficult, since it is often permanently embedded in the floor or ceiling. A surprising advantage of electric heat homes is they were often very well insulated, especially for the time period but even by today's standards.


The disadvantages start with the yearly electric bills. The last couple of decades have, for the most part, provided homeowners with cost-effective oil and gas, and made electric heat houses look very expensive to operate by comparison. In addition, where forced hot water and air systems are typically "zoned" one floor at a time, electric heat is typically done by room. Today, with many homes owners using programmable thermostats, this is less of an issue than it use to be, but many homes with electric heat that I see for sale are still using the original thermostat setup - meaning you need to adjust the heat each time you enter/leave a room. Although it seems like a minor annoyance, most people today would prefer not to think about their thermostat settings 10 times a day, so it certainly is an issue. Like forced hot air, many people complain that electric heat is very "drying", leaving the air uncomfortable. It's also, like forced hot water, completely incompatible with air conditioning.



Should I Pay More or Less for a Home with Electric Heat? Most buyers are so against electric heat that they are not even interested in looking at the math to determine the true "rational" cost. Many, many times I have told buyers that a prospective homes has electric heat to which they say, "Oh, then I don't want to see it". As far as I can tell, this heavily negative sentiment has been around for a long time. As I mentioned, oil heat homes are about twice as expensive to heat today as they were just five years ago, (electricity is up only marginally), so these homes should be more cost-effective, but at this time people are still unwilling to commit to them in large numbers, and most prospective buyers plan on retrofitting the home with a more modern heat system. For this reason, homes with electric heat often sell far below the prices of their contemporaries with more popular systems, and while it is certainly not a "mistake" to buy a home with electric heat, I would consider it a mistake if the buyer was not compensated appropriately. 10-40K is not an unusual discount for these homes.


Do Good Things Today! Matt Heisler

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About Matt Heisler

Matt Heisler is a real-estate professional and owner of this website. He has been selling homes in MA for buyers and sellers for over 20 years. He is an expert in foreclosure purchases, short-sale purchases, short-sale sales, buy and hold investing, fix and flip investing, and of course traditional residential home sales. He is happy to take questions as they pertain to real estate on Title V, Radon, Termites, Sump Pumps, Roofs, Foundations, Wells, Septic Systems, Cash-Flow, Staging, and a host of other housing issues. As a Vanderbilt University alumnus, he is proud to serve his local community.

*All information is posted in good faith and is assumed to be reliable, but may rely on third party information sources.