Cost to Install Central Air: Cool Cash for Home Sellers or Just Blown Money?

Even in a hot housing market, sellers sweat over the cost of adding central air.

The sweltering heat is begging you to install a new system, but you’re not sure if you’ll be selling soon or if it’s worth the money to do it. Before you speed dial your local HVAC technician, consider the cost to install central air and if your investment will provide cool cash if you decide to sell your home.

Our experts know all about central air and have shared their insights to help make your decision a breeze.

Real Estate Agent Joe Bourland, who has over 20 years of experience, knows the value of central air and is currently ranked in the top 1% of agents in Peoria, Arizona. Along with Willy Rodriguez, who has over 19 years of experience and is currently the Operations Manager for Day and Night Air Conditioning, Heating and Plumbing, which serves the greater Phoenix, Arizona area.

What factors determine the cost of installing central air?

When deciding whether to put a new unit in your home, sellers should remember that climate is not the only factor buyers will take into account when shopping for their next home, according to Bourland.

“It’s a requirement here in Phoenix to have air conditioning,” Bourland explains, adding that temperatures can reach 115 degrees or more in Arizona. “But, it is comfort, and it is savings. And it is peace of mind knowing that the unit should last another decade and you don’t have to worry about it as a homeowner, and that means a lot.”

In order to accurately estimate the overall costs of your central air options, you’ll have to first determine the type of system you want to install and also consider its capacity, energy efficiency and brand.

Types of AC systems

The system you choose will depend on many factors, including what type of ductwork you already have (if any) for your heating system, the space you have available to physically add a unit, ductwork, and what system will function the best in your climate.

Split system: There are two pieces of equipment that form a split system consisting of both an inside and outside unit. The inside unit is usually attached to your furnace and uses your existing heating ductwork to move cool air through your house using an air handler which is attached to your outside compressor unit.

Heat pump: A heat pump can both heat and cool from the same unit by efficiently transferring energy taken from the outdoor air and pumping it through refrigerant-filled coils. Heat pumps work the best in climates that are more moderate, such as the South where temperatures usually stay above 25 degrees in the winter months.

Ductless mini split system: This system consists of one outdoor air-conditioning unit that connects to several mini indoor air handlers (usually between four to eight units) by using smaller refrigerant pipes and electrical wiring. Installing a mini split ductless system is a good alternative for homes that don’t have existing ductwork or the space to install it. It’s also a way to customize temperatures in different rooms.

HVAC packaged system: When space is limited inside your house to add HVAC equipment, a HVAC packaged system houses all the components in the same unit that is placed outside and typically connected to your rooms with smaller sized ductwork.

High-velocity HVAC system: This functions similarly to the HVAC packaged system with the main difference being that high-velocity HVAC systems use smaller tubes (about two inches in diameter) in place of ductwork and are also more flexible to place in each room. This choice tends to be used in older homes where space is not available.

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How large should your system be?

When thinking about the capacity of your new system, you’ll want to choose a system that’s neither too small for your square footage or excessive to adequately maintain a comfortable temperature.

Capacity

When you are comparing the different capacities of power for your central air system, look for the BTU (British Thermal Units) rating for your size home.

The rating on average is 12,000 BTU per hour to cool down a small area. When you multiply 20 BTUs by your home’s square footage this will tell how many total BTUs (power) you’ll need to cool down your space. For example, a one-ton air conditioning unit (12,000 BTU) could possibly pull the heat out of a 600-square-foot home within an hour.

Other factors you have to consider are the height of your ceilings, the number of windows you have, your sun exposure and how well your rooms are insulated. All of these factors will determine how well your house can keep things cool inside.

According to Rodriguez, a site visit by a HVAC technician is a great way to find out the central air options for your home. Typically, the technician will discuss existing electrical and ductwork systems as well as the comfort level in various rooms, noise considerations, pricing options, and air purification.

“Because your air conditioner is the number one thing that moves the most amount of air in the house,” says Rodriguez.

How does the energy rating affect the costs?

Energy efficiency

A SEER (Seasonal Energy Efficiency Ratio) is the rating of an air conditioner’s energy efficiency over the course of a year. This rating indicates the potential money that you could save choosing a unit with a certain SEER rating.

The typical range of SEER ratings is 13 through 25. The higher the SEER number, the more efficient the unit is, which translates to lower utility bills. Although Rodriguez says that most consumers opt for a 16 SEER unit since it has a mid-range rating that can balance expense with savings.

“Sixteen SEER is kind of that sweet point. After that if you are going up to 18 SEER, those systems have different features and benefits, that make it very efficient, but also make it very quiet, also make it very comfortable in your home, says Rodriguez.

Generally speaking, 18 SEER systems can cost a few thousand dollars more than a 16 SEER unit, and if a consumer is trying to save money, they probably won’t see the return they want on that investment, according to Rodriguez.

Will having a particular brand installed in your home affect the value?

Brand and quality

Extensive marketing makes some brands more well known than others. Bourland says only in rare cases would a buyer make a purchasing decision based on the brand name of a particular air conditioning unit that has been installed in a home. Instead, most buyers would rather know when it was installed, the efficiency and the warranty included with the unit.

“Usually registered contractors workmanship is two years, materials could be a year, but oftentimes, you get a longer warranty that’s covered by the company that installed it,” says Bourland.

According to HomeAdvisor, the following brands for new HVAC units range from about $1,000 to $10,000. The final cost will be determined by the model you choose, its features, rating, and capacity.

• Amana / Goodman (about $1,500 – $4,000)
• American Standard (about $2,500 to $5,000)
• Bryant (about $1,500 – $4,500)
• Carrier (about $2,500 – $6,000)
• Coleman (about $1,000 – $5,000)
• Lennox (about $2,000 – $5,000)
• Magic Pak (about $3,500 – $6,000)
• Mitsubishi (about $2,000 – $7,000)
• Trane (about $2,000 – $10,000)
• Rheem (about $1,500 – $5,000)
• York (about $5,000 – $10,000)

What are the estimated installation and labor costs?

The total cost of the installation is typically going to be included with any equipment and related supplies that you purchase with your system. Overall, this will ultimately depend on the size and extent of the project. Sometimes the existing heating ductwork can also be used for air conditioning, but if that is not possible or available, then new ductwork would also need to be installed.

• HomeAdvisor: On average the labor cost is typically between $500 – $2,500, however, that cost can increase according to HomeAdvisor if you add a roof mounted unit (up to $1,000 more), insulation (averages $1,000 – $2,100) or a thermostat which can range from $125 – $275.

• HomeGuide: The cost of labor for installing air conditioning, according to HomeGuide, is typically 40% to 60% of the total cost of the project which averages $1,000 – $2,500.

• Modernize: According to Modernize, if you wanted to install a 2.5-ton unit into a home that has 1,300 to 1,600 total square feet, the installation cost would be approximately $3,570.

Putting it all together, the price of the new unit and ductwork, combined with installation and labor, will give you an estimate of how much it might cost for you to install central air in your home.

For example, if you purchased a $6,000 Trane A/C unit, and received a contractor bid for ductwork materials, installation, and labor of $3,570, you might expect to pay $9,570 for the entire job. Now you must weigh the value of making such an investment.

How much value does central air add to your home?

Current market conditions in your area as well as the climate will determine if installing a central air system will pay off if you decide to sell.

Bourland gives a hypothetical example of two identical houses where one home has air conditioning and the other house doesn’t have it. If you’re living in a warmer climate where the majority of the homes already have air conditioning, not only will the cost of adding a central air upgrade be deducted from the list price, but it’s likely an additional inconvenience cost will be added for the buyer having to install it themselves.

“Put yourself in the shoes of a buyer. That says it’s going to cost me $20,000 to do this. Why didn’t the seller do this? Because it’s going to cost $20,000, that’s why,” says Bourland.

He continued to explain the inconvenience factor could add another 50% of the upgrade amount which means in this example $30,000 could be reduced from list price if the seller decided not to put in central air themselves.

Bourland highly recommends that if a seller wants to put in central air before they sell their house to get multiple bids, consider an authorized dealer for promotional offers and to consider a less expensive model because you’re going to advertise that it’s new air conditioning, not the model.

Bottom line: Don’t sweat the housing market alone

The average total cost of installing central air is between $5,000 – $12,000 (unit, ductwork, labor and installation). However, this price can be higher depending on the unit cost, the SEER rating, size of home and additional labor costs or equipment needed.

If you’re considering upgrading your home with central air, be sure to have a HVAC technician do a site visit to access your home, and review the BTUs you’ll need, compare models, promotions, and any additional costs related to the installation.

Whether you decide to sell or stay to enjoy a cooler lifestyle, knowing your options can help you improve the quality of life for you and your family. Use HomeLight’s free Agent Match tool to get matched with a top-rated agent near you who can help navigate your central air dilemma.

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