It’s a perplexing time for the housing market in the United States. In June 2022, home prices hit an all-time high. The median home value hit $416,000—13.4% higher than the same time the year prior.

Yet, actual sales of homes are slow.

According to the chief economist of the National Association of Realtors, Lawrence Yun, sales of existing homes are actually down 14.2%. Yun notes that “falling housing affordability” is affecting middle-income home buyers.

So, when homeowners ask, “how much value does AC add to a home,” it’s important to note that while market value is important, so is saleability. A high-value home that nobody buys is a frustrating asset.

According to real estate professionals, central air conditioning may impact the latter more than the former.

Unfortunately, there are no simple answers to questions of real estate value. The market is, too often, in flux. The good news is, for homeowners willing to embrace complexity, answers do exist.

Discover the factors that affect how central AC systems impact a home’s value. Then, learn how to determine if an AC upgrade is right for your house.

What Gives a Home Market Value?

A home’s market value is determined by a wide range of factors.

While the relevance of each factor will vary, experts believe specific factors will continue to carry significant weight—even as times change. The most relevant factors include:

Neighborhood “comps”—or, what comparable homes in a neighborhood have recently sold for
Location (desirable local amenities, economy, and resources)
Home size in usable square footage
Estate acreage
Premium interior features (hardwood floors, high-quality insulation, renovated basement)
Curb-appeal enhancing exterior features (doorways, landscaping)
Condition (state of repair or disrepair)
Age
High-tech, energy-efficient upgrades
Interest rates

A well-functioning air conditioning system can give a home a boost by a few of these measures. When AC is energy-efficient and renders more rooms useable in all seasons, it can give a home’s value an upward nudge.

How Much Value Does AC Add to a Home?

In some circumstances, air conditioning can absolutely add to a home’s market value.

In 2018, the real estate platform Zillow conducted research on home features that affect home value. It found that homes with air conditioning typically sell for $5,500 more than comparable homes without AC.

But, that premium is only visible when you focus on certain averages.

And, other similar research doesn’t always net the same results. Research conducted by financial coach Alicia Bodine determined home buyers typically only pay $2,250 more for a house with air conditioning.

Depending on the size of the home, the value add—in terms of actual dollars—often doesn’t recoup the cost of installation. If you’re trying to upgrade and flip a property quickly, AC installation probably isn’t worth it.

But! If you’re living in a house you hope to sell in the future, air conditioning may still be a smart long-term investment.

This has to do with the different types of value at play in the marketplace. And, it’s the result of the dynamic between marketplace value and salability.

HVAC System Value by Location

Unsurprisingly, there’s greater demand for air conditioning in the hottest states in the USA. The U.S. Energy Information Administration, or EIA, breaks down the use and popularity of AC throughout the 50 states.

Altogether, 66% of homes and apartments in the United States use central air conditioning. An additional 22% use portable or window air conditioners.

But, far more residents in the Southernmost states use AC than their counterparts in either the Pacific Northwest or the Northeast.

In Florida, Louisiana, and Texas, a full 93% of residents use air conditioning—and, they use it more often. In contrast, only 49% of people in Oregon, Washington state, and northern California use air conditioning at all.

And, when they do, they only use it during the hottest months of the summer.

No AC? No Sale

These population insights don’t map exactly onto air conditioning’s value as an asset. But, it does point to the places where central AC has a significant impact on how saleable a home is.

Consider the case of housing in Florida. In Florida, economists are witnessing a housing bubble about to burst in real time. Southern states have seen a 53% increase in unsold inventory year-over-year.

And, many sellers have found themselves forced to slash their prices, lest they get stuck with an asset they can’t liquify. In Florida, homes with no AC, and those with AC systems in a state of disrepair, are languishing in the listings.

As the market shifts to benefit buyers, sellers need to be increasingly wary of deal breakers. In the hottest places, a lack of AC is often one of them.

Home Value Comparison: New AC vs. No AC

Another way to determine air conditioning’s impact on a home’s value is through direct comparison.

In 2019, the money management guide Pocket Sense ran some calculations. It determined that central air conditioning raises a home’s value by as much as 10%.

Pocket Sense came to this conclusion by comparing listenings for homes with new AC with listings of similar homes without AC.

But, for higher-end homes, the value increase was much lower. Moreover, buyers of high-end homes often think of central AC as a “prerequisite.” They just ignore listings of homes without it.

When Is the Right Time for Central AC Installation?

To get the most out of your central air installation, choose the right time of year.

Demand is at the lowest in the autumn, right as summer ends. So, air conditioning installers often have reduced rates in October and November.

Some homeowners are able to get good deals on AC installation if they book in the early spring.

AC System Value: Upgrade or Maintenance?

Note that air conditioning systems generally last 10-20 years. Premium HVAC systems can last up to 30 years, but you probably don’t have a high-caliber, industry-grade HVAC system in your home.

Moreover, that lifespan assumes you’ve been keeping up with the twice-annual maintenance an HVAC system requires.

So, if your system is over ten years old, you may need to replace it before you sell. In that case, it’s often worthwhile to spend a little extra to upgrade your system to a high-performance unit.

Energy efficiency is increasingly important to home buyers. And, for many, “smart home” features add value beyond that of a typical central air unit.

AC System Installation Cost (How to Calculate)

AC system installation costs vary. But, it’s possible to come up with a solid estimate for your home.

First, look up installation cost ranges in your ZIP code.

Then, think about the power you want from an air conditioner. Heavy, high-power units can get cool air across broad distances quickly. But, they’ll cost more.

Consider the square footage of your home. The base unit price for a popular, 2.5-ton AC unit ranges from $3,000-4,500. But, for every additional 800-1000 square feet in your home, you’ll have to add an extra $1,000 to your estimate.

Know that air conditioning installation costs more if you also need new ducts installed. Duct installation can add $8,000-$15,000 to your final price.

That said, this is all back-of-the-envelope math. A professional can give you a far more accurate price quote.

Money Saving Tips

If you have an older home, investing in dust repair and installation may serve you better than an upgrade to a more powerful unit. Cool air can move farther with less power when it’s not leaking through cracks and thin walls.

It’s most cost-effective to mount a central air conditioning unit outside or in a crawl space than it is to set it up on a rooftop. Installers often charge more for rooftop installations due to the risks involved.

Elevate Your Upgrade

To get the most value out of an AC installation, level it up. Choose an air conditioning system with desirable features. And, consider how each feature adds value in the long run.

System Type

There are five popular types of air conditioning systems in homes. These are:

Split systems
Heat pump systems
Ductless mini split systems
HVAC packaged systems
High-velocity HVAC systems

Different systems offer different benefits. For instance, ductless mini split systems are ideal for open-plan homes. They don’t require duct installation. Instead, these systems rely on a series of tubes to move air.

Geothermal heat pump/cooling systems are highly energy-efficient. These systems pump naturally cool air from underground into a home. They can be expensive, but worthwhile in the long run.

Research each type of system using the U.S. Department of Energy’s website. The DOE has published case studies of each type of system.

Energy Efficiency and Source

Energy efficiency tells you how much power a system uses to cool and distribute the air. Every AC system has a Seasonal Energy Efficiency Ratio (SEER) rating. The higher the SEER rating, the more efficient the system is.

You can also look for Energy Star systems.

Brand

Buyers don’t consciously note air conditioning brands when purchasing a home. But, the brand absolutely makes a difference in quality.

Before installation, learn a bit about the benefits and drawbacks of different central AC brands. Carrier, York, and Bryant are highly-regarded.

Upgrade Your AC With Air Force Air Conditioning and Heating

As you explore answers to, “how much value does AC add to a home?”—specifically, your home—keep in mind how high-quality air conditioning can improve the quality of your life.

If you want energy-efficient, comfortable central air, go with the experts. At Air Force Air Conditioning and Heating, every single member of our team is a high-caliber, certified professional.

Get your money’s worth out of your installation. Contact us today. Or, give our experts a call at (805) 558-6503.