Area Trends in New Construction - Electric Fireplaces

There used to be two primary options for fireplaces---gas or woodburning. In recent years, built-in electric fireplaces have been popping up in new construction as an alternative or as an upgrade in dwellings that wouldn't otherwise have a fireplace. On one hand, they are cheaper to acquire and install, can be easily plugged into an outlet or hardwired (no gas connection or chimney/venting required), they require little maintenance, can heat a room pretty well, and create a cozy aesthetic in rooms that may not otherwise have a focal point. On the other hand, they have a simulated flame rather than a real fire and, unless they are incorporated into framing, are essentially a space heater hanging on the wall. For appraisal purposes, we're talking about those built-in electric fireplaces decked out with paneling, trim, and maybe even a mantel (see photo). For these, there is value to consider--but do they add as much value as more traditional types of fireplace?

Example of a built-in electric fireplace with all the bells and whistles. (Image linked to source to give credit where it's due.)

Buyer tendencies in a particular market heavily inform an appraisal. Other things being relatively equal, research indicates buyers in my market are willing to pay a bit more for a gas or woodburning fireplace vs. a built-in electric. I address this in an appraisal report by making quantitative adjustments for fireplace type on the Sales Grid.

The case for differentiating between types of fireplace is even stronger when initial costs are considered.

One of my preferred methods for calculating and supporting adjustments on the Sales Grid is depreciated cost. That means starting with initial cost (or "cost-new"). In an average quality home, one source estimates a $6700 base cost for acquiring and installing a one-story gas fireplace and $2500 for a built-in electric as of October 2025. This difference, coupled with research indicating buyers react differently to fireplace types in my local market, means fireplace type should be addressed in appraisal reports and adjustments should be made accordingly. It's a little extra work, but I think it needs to be done.

The take-away? While a built-in electric fireplace may not have as much quantitative impact on value as a similarly styled gas fireplace, it can be an affordable add-on in new construction (or upgrade in an existing room) that has some added value. Not to mention, it can certainly add to a home's marketability.