For Bill Davidson, owner of Davidson Homes in San Diego, a fireplace is the most important piece of furniture in a family room. “You don't have a home without a fireplace, ” says the builder, whose company closes on about 200 homes a year. “It all started with fire in caves.”

Wood-burning fireplaces ignite such a passion in him that he installs them in virtually all of his products, which range in price from $400,000 to $2 million. Davidson's buyers seem to feel the same way: 50 percent choose a second fireplace.

Fireplaces remain hot with home buyers. Sales increased 98 percent between 1992 and 2002, according to the Hearth, Patio, and Barbecue Association (HPBA), of Arlington, Va. Of the 1.5 million fireplaces shipped in 2002, 62 percent were fueled by gas. The popularity of gas is no doubt due to industry innovations in recent years, regional environmental regulations prohibiting wood-burning units, and legions of boomers who like the instant ambience that comes with a remote control. Gas fireplaces also have evolved to the point where they're affordable even for first-time buyers.

HOT SELLER: The steady popularity of fireplaces is adding up to profits for builders. The steady popularity of fireplaces of all kinds adds up to profits for builders. At Town & Country Homes, of Lombard, Ill., buyers are evenly divided in their preference for gas and wood-burning units, says vice president of purchasing Mark Loehner. They're putting them in multiple rooms and adding stone surrounds and decorative doors. Young buyers are upgrading with built-in entertainment niches that accommodate equipment and sound systems.

In the chilly Northeast, direct-vent gas fireplaces are standard on 95 percent of the products by Fairfax, Va.-based Brookfield Homes, which offers homes priced from $250,000 to $3 million. The units are optional only on starter homes and in active adult communities, where their appeal as a standard feature is often low, says Janet Howell, vice president of sales and marketing. At Brookfield's design center, homeowners are shelling out about $4,000 for two-story stone fronts. Also popular are Craftsman and Cape Cod-style mantels that match the style of certain homes, and two-sided fireplaces between the dining room and living room or in the master suite.

Performance Vs. Aesthetics It's easy to understand the appeal of such features. But Tim Rethlake, vice president of strategic accounts at Heat N Glo, in Lakeville, Minn., says he believes a lot of builders are missing out on profits by focusing on decorative elements, rather than on how well the units perform. “We've developed different performance factors for different climates—high-heat output for builders north of the Maryland line, and low heat but high aesthetics for southern markets,” he says. “From a performance viewpoint, a builder could have three levels of upgrades.”

IN OR OUT: They're not just for the family room anymore; outside fireplaces are new hot items. The company's research shows that most consumers when offered a better-performing fireplace would purchase the upgrade rather than use the standard builder model. “A fireplace isn't easy to replace; it gets pretty built in,” Rethlake says. “We're constantly getting calls from consumers asking for a fireplace with more heat, or with ducts that can be channeled to another room. They say, ‘We wish the builder would have told us.'”

Environmental performance is another aspect of Heat N Glo's research and development. Regulations in parts of coastal California have Bill Davidson worried about the future of wood-burning fireplaces. “It's a tough issue,” he says. “None of us want nasty air.” For traditionalists like him, however, Heat N Glo launched several EPA-approved wood-burning units in 2003. But it may be some time before they trickle down to tract builders. Requiring many more components and heavy-duty materials, they cost about 10 times more than simple fire-boxes, though a mid-priced model is in the pipeline. “Small contractors doing 15 homes a year aren't shying away from them at all,” says brand manager Ross Morrison.

Fireplaces Alfresco Brookfield Homes in San Diego is also doing standard wood-burning fireplaces in the family rooms of all its single-family detached homes, which range in price from the mid-$300,000s to $800,000. Gas fireplaces are not even offered, though many buyers purchase the $300 gas conversions. And later this year, the $1 million courtyard homes in its high-end Calabria community will likely include an outdoor fireplace, either standard or as an option, says Carlene Wilkie, vice president of sales and marketing.

Outdoor fireplaces may be the next cool home accessory. There's no question they're gaining in popularity, according to Don Johnson, director of market research for HPBA. The association conservatively estimates that about 450,000 units were shipped in 2003, the first year it began tracking them. “We do have some problems defining what we mean by outdoor fireplaces,” Johnson says, “but we know shipments have been up for the first three quarters of 2003.” (Final figures were expected out this month.)

Toronto, Ontario-based Vermont Castings, Majestic Products has stepped up its outdoor offerings in response to builder demand. Custom builders were the early adopters in this category, but the company recently downsized its first model—the 42-inch stainless-steel, wood-burning Super Hearth with optional gas logs—to a 36-inch unit geared toward mid-priced homes. This year, the manufacturer also introduced a ventless gas fireplace for outdoor use. “Unfortunately, a wood fireplace with gas logs doesn't give off much heat outside,” says president Dan Downing. “This device is nice for lanais or areas where you do want to generate heat.” Heat N Glo's two-sided, see-through Twilight unit blurs the line between indoor and outdoor fireplaces. Made for the exterior wall of a home and twice as expensive as a living-room fireplace, “it's a nice transition in the trend toward outdoor living,” Rethlake says. “This is its third year on the market, and it has really started to go.”

Production builders, especially those in the Southwest, are getting in on the act, he says, specing packages from simple patio fireplaces to $50,000 outdoor kitchens with pre-engineered grill islands and elaborate fireplace surrounds. “We've tried to simplify things for tract builders by being a one-stop shop,” Rethlake says. “In many cases, our distributor provides turnkey service, rather than making the builder find a stone mason to do the work.” That's good news for builders. If sales continue their trajectory, more buyers than ever will be depending on their fireplaces for ambience or to heat their homes.

Hot Stuff

Brookfield Homes, of Del Mar, Calif., sells homes in San Diego and Riverside Counties ranging from the mid-$300,000s to the $900,000s. All of its detached homes come with standard wood-burning fireplaces in the family room and include paint-grade or stain-grade surrounds, depending on the price of the home. Houses starting at about $700,000 include a second fireplace in the family room. Among the upgrades the builder offers:

Second fireplaces in the living room
and master bedroom
Oak mantels $500
Maple mantels $750
Precast concrete surrounds $400 to $800
Tile, granite, marble, or brick surrounds Varying prices
Gas log kits $350