Last time I went to NYC, I paid $7.50 for a 16 ounce draft barley pop. My companion purchased a pack of smokes for $9.00, it is a whole nother world.
Eric

Posted By robinnc on 02 Apr 2011 11:57 PM
1) I can see it costing more up there than in the SE but still those prices seem insane.
2) Are the trades up there all unionized?
3) The material prices are the same, the equipt to dig a trench or drill a well costs the same so that basically says labor is thru the roof. Is this correct?
4) Traffic can be bad anywhere. When I lived in Atlanta I was only 11 miles from work but I was lucky if it took me 45 mins to get there.

1) Lots of insane prices in NY, without understanding that you prove my point that this whole discussion has no merit.
2) ???? so what if they were?
3) This is not correct. The equipment doesn't cost the same.
4) Have you ever been to NYC?

I'll try a last time........
Things such as cost of insurance (comp, liability and auto), cost of real-estate (impacts a business rent or mortgage), cost of gas, tax rates, permit prices etc. vary wildly. They dramatically impact the cost of business for both the distributor and the installing contractor as well as the driller/excavator. If everybody involved in the procurement/installation of a geo system pay more to do business the consumers net cost can easily be 2-3 times what someone in say IN pays.

The confusing thing to me is not the high prices in NY, it's folks inability to understand them.
j 

NYC traffic all day pretty much resembles ATL rush hour. Max highway size is 6 lanes, and the metro area probably has triple ATL's population. There is nothing remotely resembling the toll-free 14 lane I-75/85 expressway through town.

Add to that $6-$10 everytime one drives across one of about a dozen perennially traffic-choked bridges and the logistics challenge begins to take shape. Parking a car overnight in NYC can cost as much as a hotel room elsewhere.

My architect bro-in-law in Philly (roads even worse than NYC, other costs not as high) reports labor rates of $40-$50 per hour and constant battles with / sabotage by unions. Exhibitors in Philly's convention center have learned to come up with snap-together displays because wielding so much as a screwdriver (literally) on one's OWN possessions within the convention center triggers a Teamster grievance / fine. Faced with those hassles, I'd gobble my Glock before attempting to do biz in a northeastern city.

Posted By engineer on 03 Apr 2011 09:16 AM
I'd gobble my Glock before attempting to do biz in a northeastern city.

Almost lost my coffee. 

Ah yes: the inability to understand pricing, as in Joe Ami's continued struggle with the concept of supply and demand. The ORNL study I cited earlier described a chicken and egg problem. http://info.ornl.gov/sites/publications/files/Pub13831.pdf In 2008, anyway, demand was so weak in most of the country that contractors (supply) had neither economies of scale nor genuine competition. So they charged ground loop prices (2-5 times higher than in competitive markets) that pretty much guaranteed that demand would grow slowly if at all. The study wants utilities to take over the ground loop piece.
While the 30 percent tax credit surely has perked up interest, this thread demonstrates that initial cost is still the No. 1 barrier to GSHP's acceptance. Three years is a very short time to arrive at a stable, competitive marketplace, particularly when the purpose of the credit is to distort it. I am guessing that waterpirate's competitive situation -- strong demand, growing ranks of contractors and falling prices -- is not the norm.
What GSHP buyers should assess is the level of competition locally. If the GSHP market in NYC is mature, for example, one would expect to find prices dropping there as well, albeit from a higher base. Union/nonunion, travel time, insurance costs, mortgage payments and the like are just background noise -- the point below which none of the competitors can cut prices and stay in business.
Supply and demand explained the wide disparity in ground loop prices that ORNL found. Well drilllers and excavators hadn't done enough them to get good at it or care about it. If a competent, attentive sub did exist, he was rarely hindered in his pricing by competition (i.e. there weren't two of them.) What's more, according to ORNL, GSHP contractors lacked the resources and business base to buy drilling rigs or backhoes and take over that work directly.
We might have an example that's quite close at hand. When I Google the telephone numbers listed on Joe Ami's amicontracting.com, I come up with what appear to be independent companies: Johnson Heating and Cooling; Aletha Heating and Cooling. What's more, I don't see the pictures of troops, trucks and shop that are the inevitable -- and righteous -- mark of a major contractor. http://www.flamefurnace.com.
I am not disparaging Joe's qualifications, or saying that bigger is better. To the contrary, the upstarts probably have more GSHP experience than established HVAC companies.
But that's precisely the problem, isn't it: That GSHP is not yet mainstream in most of the country? One of the websites above declares "We won't be undersold." The other does not.

What does ORNL say about the average price of paragraph breaks?

You can be sure that FlameFurnace's price for a geosystem install would be significantly higher than what Joe charges.

Todd,
You missed Milford Heating, John's Heating, Comfort Systems, JTM and Air Craft Mechanical Inc.
Perhaps you think the absorbtion of a few companies along the way (15 years since incorporating) indicates an upstart; I would think most folks would read that a little different.

Flame Furnace on the other hand has been bought and sold repeatedly in the last decade or so by Michcon (gas co.) among others. They have a little better IT budget and oh so personal service.

"NYC is mature, for example, one would expect to find prices dropping there as well, albeit from a higher base...."
So you do recognize different markets have different base line pricing due to local cost contributors. Thanks for supporting my position.

Joe

Upstart: a person of humble origin who attains sudden wealth, power or influence. Sorry for the mischaracterization, Joe.
But since you brought up your history: Aircraft Mechanical Inc was incorporated in 1996. AMI Comfort Systems appears in an assumed name filing in 1998. (AMI doing business as AMI Comfort Systems.) AMI Contracting dates to an assumed name filing in 2007. In a quick sampling, the other names appear not to be linked to AMI, although it seems to me that Aletha and Johnson, as examples, should say they were acquired -- or are defunct in the case of asset liquidations -- or AMI should say it is doing business under those two names. Michigan carries them as active corporations but behind in their filings (not since 2008.). Again, I am not disparaging Joe. Just raising questions that might occur to a prospective customer. Like, if Aircraft Mechanical Inc. was GSHP in 1996, how do the airplanes fit in?
Corporation records are available online in most states. The Better Business Bureau offers some company histories at BBB.org, accessible by entering the business' phone number. BBB membership is a plus because the company must answer your complaint to remain in good standing. Check if your state requires HVAC licensing (probably), and collects and publishes complaints (rarer.) Licensing history is still valuable because veterans are preferable to newbies, all else being equal.
References provided by the company aren't worth much. Builders and unrelated trades are a better source. A GSHP install probably needs an electrician at some point, for example. Code officials can be helpful too although you may need an indirect approach. While many are prohibited from making recommendations, most are free to tell you who are the busiest GSHP contractors in new construction. (New construction because builders know the players better than homeowners.) At a minimum, you start crossing off names. As in choosing a heart surgeon, you don't want the guy who does one or two a year.
If you can wait, do so, particularly if GSHPs are rare in your area. Likely, it will be easier and cheaper in 2014.

Posted By toddm on 04 Apr 2011 01:52 PM
1) Upstart: a person of humble origin who attains sudden wealth, power or influence. Sorry for the mischaracterization, Joe.
 
2) But since you brought up your history: Aircraft Mechanical Inc was incorporated in 1996. AMI Comfort Systems appears in an assumed name filing in 1998. (AMI doing business as AMI Comfort Systems.) AMI Contracting dates to an assumed name filing in 2007. In a quick sampling, the other names appear not to be linked to AMI, although it seems to me that Aletha and Johnson, as examples, should say they were acquired -- or are defunct in the case of asset liquidations -- or AMI should say it is doing business under those two names. Michigan carries them as active corporations but behind in their filings (not since 2008.). Again, I am not disparaging Joe. Just raising questions that might occur to a prospective customer. Like, if Aircraft Mechanical Inc. was GSHP in 1996, how do the airplanes fit in?
 
3) At a minimum, you start crossing off names. As in choosing a heart surgeon, you don't want the guy who does one or two a year.
If you can wait, do so, particularly if GSHPs are rare in your area. Likely, it will be easier and cheaper in 2014.

1) Wow, if I'm an upstart, I can't wait for the sudden wealth, power and influence.
2) 1996....hmmm sounds like 15 years, how long does it take to be an upstart? Sorry my attorney forgot to put a space between air and craft like I asked, but such things happen and aren't worth fixing. By the way ACMI as it should have been would be acme spelled wrong and you likely would bust my chops for that as well. Many Corp names morph, often to accomodate aquisitions. I have no DBA's for Aletha or JTM, or Milford Etc. as they are defunct and I am not.
You have little idea about what you speak, but in case you have a soul, Aletha has neglected to file as she and her husband, that lovingly named his company after her, are deceased (any other cute quips?). He was a wonderful mentor and they were both dear friends. I am proud to serve their former customers and grateful to have a phone number that has been stuck to appliances for 50 years.
3) One or two a year? You compare me to Flame Furnace who predominantly does furnace retrofits in the city and make this comment? A better analogy would be- You don't want to pick a GP to do heart surgery just because they have the most patients.
Cheaper in 2014? Not likely. Demand for higher efficiency and longer warranties continues. That stuff ain't free. Nor are op costs on the decline.

....Oh and just because there was a thrust to this thread, was there any of my corporate history that had a damn thing to do with the price of geo.....or tea in china? Or do you have an axe to grind with me for some reason?

Again I'd like to think you for agreeing that different markets have different base line cost contributors. That has been the one thing you have mentioned on topic.
j

OK mods, now that I have a cyber stalker and we are way past beneficial contributions, can we let this sticky go?
J

toddm... what exactly is your point ??  I fail to see any connection between Joe's business history and the purpose of this forum.

engineer.....those labor rates probably means they are in a union. I'm only 2 states below you and that is at 'least' 3x the labor rate in this area. Even at the 'low' rate they are making around 94 grand a year!!!!!.I'll be a laborer any time to make that kind of money!! I do see where toll roads would add to the cost but that has to be verrry minimal.  Joe said the parts and machines do not cost the same in NY.....WTH......why wouldn't it be not counting the state tax difference ? Again everyone, the 'parts'.....(not LABOR) of the HVAC, the machines used to build it(trench or drill) are the same with minor diff. Why is it such a hugggge diff from place to place....it seems to boil down to mainly NO competition??

Posted By robinnc on 05 Apr 2011 12:11 AM 
Joe said the parts and machines do not cost the same in NY.....WTH......why wouldn't it be not counting the state tax difference ? Again everyone, the 'parts'.....(not LABOR) of the HVAC, the machines used to build it(trench or drill) are the same with minor diff. Why is it such a hugggge diff from place to place....it seems to boil down to mainly NO competition??

I spoke with a builder in NY who wanted my advice on a project. When we compared the price of equipment, he nearly drove here to purchase it.
Robin, if real estate costs more, won't the supplier have a bigger mark-up to cover their store front?
If gas for their trucks costs more won't they have to charge more?
If their insurance costs more, won't they have to charge more?
I'm going to guess you haven't run a business as you very honestly don't see what an impact these contributors have.
So while the manufacturer might charge the distributors the same price for the equipment ("parts"), the distributors do not charge the dealers the same price.
In the case I sited above the difference was several thousand dollars.

j

Here in the north east I will sum it up. Population density makes everything more in demand, that makes the pricing go up. As population density increases the cost of living goes up as well. The cost of living affects everything, not just your costs but the costs of things being supplied to you by others. Costs go down as population density decreases.
Eric

Robin - if you are "two states below me" that would be...well, I suppose you could try to count Cuba as state #1 below me, then maybe Puerto Rico...I'm not sure where that puts you. Two states above me would be NC...just messing with you...

WP's got it right in a nutshell.

In NYC everything is more expensive...electricity is double the national average. Insurance, and state and local taxes are through the roof. Traffic congestion imposes an insidious time consumer on every client trip or parts run. I routinely drive 100+ miles per day to client sites and then parts houses. As it is, I'm 3 hours on the road. Try 100 miles in metro NYC and you'd never get out of the car.

Free and convenient parking is a given at all shopping venues in most of suburbia...parking is virtually non-existant in NYC. Area at job sites to park trucks, trailers, staff and material is a virtual given in most suburban sites - virtually impossible in NYC.

From what I know North Carolina is spacious, well-run, and prosperous. It has a mild climate and reasonable cost of living along with nearly no dense urban areas. Conditions in NYC are inconcievable to an NC native, and rightly so

I do understand it can be quite a difference in the NE vs SE......but it just boggles my mind when a house up there will cost  3-5x(not including lot) as much as it does down here. I know everything will be marked up higher up there because of the reasons you stated but to cost soooo much more still doesn't make sense to me. Obviously the unions up there raise prices ALOT for labor!
I've never been to NY but I wouldn't imagine a car would cost 2x as much as the SE??

Cars do cost more in the NE. That's why I went South to buy my Bentley, Rolls, and Lamborghini....  and now you know why geothermal costs so much more in the NE.  Getting these cars serviced is not cheap.   And they won't come to my mansion to pick them up.  That is extra.

You must be in the union.....

I have a good friend who is a union carp in NYC. He does admit he makes just over 100K per year. Its an easy life. He leave the house at 4 am, carpools to the train station with a friend. Takes the train in to Manhatten and the subway to the jobsite. Works 7 am to 4 pm unless it is a mandatory overtime job, in which case it is 7am-to 6pm. Home by 7, or 9 pm depending. He has 2 complete sets of tools so he doen't lose more than one day on the job when one set gets stolen.

I think he is nuts personaly. I don't think you could pay me enough to work in the city.

Eric