Fireplaces Don’t Add Value Like They Once Did, But You Can Still Enjoy One

You’ve spent too many cold nights around the Netflix “Yule Log” and crave the warmth and comfort that only a genuine fireplace can offer. But if you start from scratch, the cost of building a traditional, wood-burning fireplace can cost up to $30,000. Besides the ability to keep your feet nice and toasty and serve as a great holiday centerpiece, does adding a fireplace increase home value in a way that justifies the great expense?

With our guide to modern fireplace trends and the value-add of this specialized upgrade, you’ll get insights into how much value residential appraisers attribute to indoor fireplaces. In addition, we’ll explore the shift away from fireplaces in new construction and offer ways to save money with non-wood-burning fireplace alternatives. If it’s the glowy, cuddle-up-with-a-good-book vibe you’re going for, you’ve got more than one option (and none of them involves your TV!)

Overall, a fireplace adds minimal value these days

The widely used Uniform Residential Appraisal Report includes a box where appraisers can check whether a home has one or more fireplaces or wood stoves. While some homeowners may use a fireplace for heating, the appraisal form considers it an amenity in the same category as a patio or deck, a pool, a fence, or a porch. So how does an appraiser value that amenity?

Mason Spurgeon, a certified general real estate appraiser since 2004 who handles appraisals in Missouri, Illinois, and Iowa, estimates that a fireplace may increase a home’s value by a mere $500 to $1,000, if at all. And that’s in the Midwest, where freezing winter temperatures only enhance the cozy allure of an indoor fireplace.

“Just because the fireplace cost a lot of money to install does not mean that the market will place much value on it,” Spurgeon says. “In lower to moderately priced homes, they are not expected and therefore rarely add to the value.”

Spurgeon adds that when he asks a homeowner if the fireplace works, the person answers something like, “I’m not sure, but I think so,” indicating that the fireplace isn’t a priority.

“Most homeowners are not very concerned about fireplaces, probably because they don’t see as much use these days, and they would rather spend their money elsewhere.”

A study from the National Association of Home Builders (NAHB) similarly found that only 16% of buyers included a fireplace on their list of essential household items.

The exception: Luxury homes and lodges

Rachel Massey, a certified residential appraiser covering Ann Arbor, Michigan, and surrounding Washtenaw County, says the value of a fireplace depends on several factors, particularly your local real estate market and price range.

“For a market of winter mountain lodges, I would expect there to be a resounding ‘yes’ in terms of it mattering, and the large stone fireplaces with rough-sawn timber mantels may be all the rage,” says Massey. By contrast, a suburban tract house with a zero clearance fireplace — a particular type of manufactured firebox — might offer little value beyond a buyer thinking “that’s nice.”

Fireplace value also hinges on the home overall and how well the fireplace matches the home’s quality. A large stone fireplace with a wood mantel is expected in a hunting lodge, but if the same fireplace was in a $200,000 home, it would be out of place and may even negatively impact the sale price, Spurgeon says.

Outside of the woodsy lodge setting, fireplaces also make more of a value impact on homes in high-end neighborhoods, where a fireplace is often viewed as a design statement and baseline requirement for an upscale property.

“If it’s in the luxury market, it’s something as an expectation as an amenity, so not having it, you wind up losing value,” says Eric Forney, a real estate agent serving Indianapolis, Indiana, who sells properties 38% quicker than the average agent in that area.

Statistics from NAHB confirm that fireplaces are less common at the lower end of the housing market because of the challenges of keeping new homes affordable. Only 7% of new single-family homes in 2018 that were priced under $150,000 had fireplaces compared to more than 60% of the new homes that year priced at $500,000 or above, NAHB reports.

Lack of practical use, added cost hurts fireplace appeal

In 2014, the EPA estimated that there were more than 17.5 million fireplaces nationwide. By 2016, that estimation had dropped to 13 million. Although the EPA lacks more recent stats on total fireplaces nationwide, data from the new construction sector would indicate that fireplace popularity continues to wane.

In 2018, builders put fireplaces in only 41% of single-family homes, compared to 57% in 2001, according to an annual analysis of U.S. Census data from NAHB.

Forney shares anecdotally that his new construction buyers have been willing to forgo the cost of installing a fireplace to save money. “It’s not adding the value on resale that maybe it once did,” he says. “We don’t see a lot of actual day-to-day use from fireplaces in our market. I feel like they get used around Christmastime when they look nice.”

In addition to the affordability factor, Spurgeon notes that “fireplaces have been labeled outdated due to their cost to install and upkeep, and the advancement of modern efficient heating systems.” The National Fire Protection Association recommends homeowners do a chimney sweep once a year to check for deposits and correct clearance, which calls for writing a $244 check on average each time.

I still want a fireplace: How much are we talking?

“For me personally, a fireplace is a big deal,” shares Massey. “I would be hesitant to buy a house without one because of how much I like to snuggle up around one in the dead of winter.”

If you’re in Massey’s fireplace-enthusiast camp, you’ll find that the cost to install your dream fireplace depends on whether you desire wood-burning, gas, or electric, as well as whether you have any kind of existing fireplace setup.

The less fireplace infrastructure you have to work with from the start, the costlier and more complicated this home improvement project will be.

You should also check with your homeowners’ association, fire department, and local municipality about any building codes regarding fireplaces and types of installation. Then, call your homeowner’s insurance company to ask about how a fireplace will impact your policy, similar to how a backyard firepit can change your coverage.

When you’re ready to install that fireplace, consult this brief overview of several different types of fireplaces and what you can expect to spend:

Wood burning

A wood-burning fireplace has a lower utility expense but requires the most involved installation from the ground up. As we mentioned before, building a wood-burning fireplace anew can cost as much as $30,000, including the chimney, chimney liner, masonry, and labor, according to HomeAdvisor.

A wood-burning fireplace also needs frequent maintenance, particularly to remove creosote, a tar-like deposit from burning wood that remains in your chimney and can be dangerous if not removed. Keep in mind, with that kind of money you could also do a sizable upgrade to your kitchen or main bath.

Wood-burning stove

A wood-burning stove can be inserted in an existing chimney and masonry. These come in different varieties (circulating, combustion, and radiant heat), costing about $325 to $4,000 for the units themselves.

Gas

A gas fireplace requires less maintenance, but you may need to install a gas line if you choose a vented model. (Ventless options also are available.) You should figure about $3,500 for the unit and installation, plus the utility costs of gas.

Electric

Electric fireplace sales have been on the rise in recent years, with about 832,000 retail units sold in 2018, statistics show. An electric fireplace generates a higher utility bill but is easy to operate and maintain.

The cost includes the unit itself, plus wiring. Since it uses electricity, it doesn’t generate any harmful emissions. A glass-front 5000 BTU insert firebox with a stone bed that uses an existing 120V outlet costs an average of $900 nationwide for the unit and installation, according to Fixr.com.

Fireplace insert

If your home has an older, open-combustion fireplace, you can upgrade to a fireplace insert — a self-contained unit inserted into an existing firebox. These can burn using wood, propane gas, pellets, or electricity, and range in price from about $225 to $2,200, not including installation.

Tips for maximizing the value of your fireplace

If your home already has a fireplace, it’s not going to hurt your property value so long as it’s in good shape. “A fireplace may help a property sell faster because of the way it makes people feel, like a large tub in the master bathroom,” Spurgeon says.

Here’s how you can make sure it’s marketable and show potential buyers the appeal:

Keep up with routine maintenance

Forney says he often sees a number of inspection challenges with a brick chimney or a wood-burning fireplace come up in a real estate transaction, and sometimes inspectors will call for an additional chimney or fireplace inspection.

To avoid raising red flags with your fireplace, The Chimney Safety Institute of America has three different levels of recommended chimney inspections based on use, how often your venting system or fireplace has changed, and whether your home is for sale.

The organization also has guidelines for hiring a professional chimney sweep. Other recommended fireplace and chimney maintenance includes having a wire-mesh cap atop the chimney to keep out birds, squirrels, and debris, plus removing excess ashes.

Go with gas

Spurgeon says that the type of fireplace (wood, gas, electric) doesn’t appear to have an impact on the value-add, though it should be noted that a removable fireplace falls into the “personal property” camp and will not be included in an appraiser’s valuation at all.

However, from a marketability perspective, the 2019 edition of NAHB’s What Home Buyers Really Want study found that 55% of homebuyers found gas fireplaces desirable, compared to 48% of homebuyers who liked wood-burning fireplaces. Plus, gas is substantially cheaper, according to the cost estimates we gathered above. So you’re spending less upfront and potentially gaining more from your investment as far as buyer appeal.

Deal with structural problems prior to listing

If you need to remove a chimney or fireplace because of a structural problem or to create more open space, expect to pay about $500 to $2,000 for a partial removal or demolition, or roughly $4,000 to $6,000 for a complete removal. In either case, experts recommend hiring a structural engineer beforehand for about $500 to assess the project professionally.

Use simple staging techniques

We recommend following this pre-listing fireplace prep list:

• Clean up your fireplace mantel prior to resale by removing soot and smoke stains. You can use a dry sponge Magic Eraser or all-purpose cleaner diluted with water and a microfiber cloth for tough spots.
• Touch up any chipped paint on the mantle the same way you would your indoor trim.
• Clear away the clutter and don’t over-decorate. Simplify with one or two accessories on top of the mantel at most.

Fireplace financials aren’t everything

Based on our conversations with real estate appraisers and the way fireplace installations are trending downhill in new construction, we can conclude that adding a fireplace to your home won’t offer a ton of financial value at resale, unless you’re in a luxury or lodge-heavy market.

But like other splurgy home improvements such as a swimming pool, you’ll need to weigh how much enjoyment you’ll get out of this special amenity. If you’ve long wanted to sip hot cocoa by flickering flames or toast s’mores indoors, then what are you waiting for? Install that cozy fireplace, flip your Netflix “Yule Log” back to something binge-worthy, and never look back.

Header Image Source: (Andrea Davis / Unsplash)