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Is it a good time to buy?

May 15, 2019 By Tayson Rockefeller Leave a Comment

Any good economist, salesperson, or real estate agent will always tell you up front; “I don’t have a crystal ball.” I don’t view this as a disclosure to cover one’s rear, but more a statement to get you thinking about both sides of an equation. With that, I don’t have a crystal ball, but I am going to do my best to make a recommendation.

Home prices continue to rise, the real estate market is booming, but these cycles don’t last forever. Even in times of recession, history shows us that markets recover, and thrive. I have to remind people that those who purchased a home in 2007 would very likely be in good shape today. We witnessed one of the deepest recessions in American history, yet here we are, 10 years later. If you would have purchased a home in 2007, your interest rate likely would have been somewhere between 6 and 7%. This seems high, but based on the past 50 years, it’s not bad. Sure, there are other equations. Those with an 18% interest rate in the early 80s could have refinanced over time. They also may have experienced a higher rate of appreciation.

Regardless, for the first time in history, rates have been below 5% for nearly 10 years, and this probably won’t last forever. The rate of inflation will likely increase as the strong economy continues, which will result in increasing interest rates to create balance for that rising inflation.

With that, I’m going to run a quick hypothetical. Let’s say you are buying a home and obtaining a loan for $400,000. The interest rates for a 30 year loan today are favorable, in the low 4% range. I’ll use 4.25%. The total cost of the loan, if you didn’t make any additional payments, would be about $708,000 over 30 years. Now, let’s say home values come down. You are able to buy the same home for $350,000 in a few years’ time, but interest rates are 6%. The total cost of the loan is $755,000 in this scenario.

To be fair, the above scenario isn’t totally realistic. Most people don’t own a home for the entire duration of their mortgage. I believe the median tenure living in a home is somewhere around 10 years. If we run the same scenario, and add up the payments over those 10 years, your balance owed at the end of 2030 with the first scenario would be around $300,000 and $280,000 in the second scenario. If you were to take into account the payments you would have made (as opposed to renting) between buying a house now, and if, and when the prices reduce in the future, you would likely be in the same boat. Things would also begin to swing in your favor the longer you own the home.

We don’t know if prices will decrease. We also don’t know if interest rates will rise. For all we know, home prices could come down along with interest rates, or home prices could increase along with interest rates. If trends continue, the latter is more likely to happen. If I run the same scenario with an increased purchase price and a higher interest rate, things get ugly.

We all have our own budget, limits on what we should spend, or even circumstances where it is not the right financial move to invest in a home. Do your best to weigh the pros AND cons. Educate yourself with respect to current interest rates, home prices and values. If it all adds up, then yes, it is my opinion that it is the right time to buy.

Map Your Listings!

April 19, 2019 By Tayson Rockefeller Leave a Comment

For this week’s article I wanted to talk a little bit about marketing. Specifically, listing mapping, how it works, and how it can drastically affect your listing.

I am constantly in some sort of web development phase. I monitor our own website and it’s performance, look at competitor sites, as well as listing sites like Zillow. As a refresher, your listing, and how it appears on these sites is directly linked to how your Realtor enters the data into their local MLS.

Accurately entering this data is important not only for mapping purposes, but property features. For example, if your property has a Teton view, you need to make sure that your agent checks the box under the view category that the property has a Teton view. If the data isn’t entered correctly your listing isn’t going to show up for those using specific search filters. It’s amazing how many agents don’t enter this data correctly, especially once you get into the Idaho Falls market… Sorry guys, it’s true.

Back to mapping and its importance. Just like customers using filters to look for properties, many customers (if not most) used some sort of map feature to search for real estate. Like inconsistencies with property features, it’s amazing how many real estate agents don’t properly map their (your) listings. Almost every MLS tries to map listings automatically, and there is a second step available to verify the location of each listing entry. Because we are in a rural area, many listings are either not mapped by this system at all, or mapped improperly. All of the websites that display your listing receive their data from each MLS in simple data feeds. These feeds include property features, acreage, square feet and so forth. The mapping data, however, is provided in latitude and longitude coordinates. If a listing is properly mapped, these coordinates are sent to the secondary website like Zillow. If they aren’t, a variety of things can happen, none of which are good for your listing.

The primary result for most advertising websites if coordinates are not available is to not display them on maps at all. This is the case with Zillow. The listing is still available in the “list” view, which is why you’ll see your listing come up, and many agents don’t realize the mistake they have made. The other result, which is the case on websites like mine, is that these listings are still displayed on the map, but in the wrong location. This can be a minor issue since my website tries to generate it’s own coordinates based on the address, but it can also be a major issue for listings that don’t have an address or haven’t been mapped by Google, many land listings fall under this category. These listings can show up and very odd places, Africa for example. Arguably this is better than not having it display at all, but still a pretty big issue. As we approach the sale season, it might be good to review your listing with your agent, and verify that it is being mapped properly, and that is translating properly to sites like Zillow.

Septic Systems in Idaho

March 19, 2019 By Tayson Rockefeller Leave a Comment

I’ve written a few articles in the past about septic systems. There’s some basic information in these articles, but I’ll review that again here in an effort to have a complete write-up on the topic. As a disclosure, I am trying to provide a guideline for my future customers and readers. However, it’s important to always follow up with the current regulations and restrictions in place at the local Public Health Department.

What is a Septic System?

It would be unrealistic for all areas to have access to infrastructure that would pump sewage and wastewater to a treatment facility. While municipal sewer connections are available throughout area, they are mostly restricted to areas within, or near city limits. Because an alternative method of disposal is needed, septic systems are the go-to method in the area. Essentially, these systems are self-contained wastewater treatment systems. Conventional systems consist of a septic tank followed by a drain field. Both liquids and solids flow into the tank where solids decomposed and liquids are discharged into a series of perforated pipes buried in a field (called a leach field) which slowly releases the effluent back into the soil.

It’s important to know that septic system requirements are not dictated locally. They are done so at the State level, with guidance from the DEQ. In order to install a septic system, or even to obtain a building permit, you must first obtain a permit from your local Health Department. In order to do that, the Health Department must understand the soil composition and water table for the proposed location of your septic system. This information is gathered by performing a site analysis.

Site Analysis

A site analysis is performed by having a 10-foot deep hole dug in the approximate location of the proposed septic system. It is preferred that this hole is dug during the Spring when the water tables are at their highest point. Once the hole is in place, a Health Department official can make note of the soil composition and the depth of the water table. A general guideline for the allowance of a “Basic Subsurface Disposal System” is as follows:

A standard septic system can usually be installed if the separation from bottom of the leach field to the top water level is:

Sand: more than 6 feet of separation

Silt: more than 4 feet of separation

Clay: more than 3 feet of separation

It’s also important to note that the health department would prefer to perform these analyses during times of high water. However, if you are obtaining a permit in the fall months when the water table is low, it is possible that they can review nearby information and cross reference other site analysis that have been performed in the immediate area to approve a septic permit during these times. It is possible that the department could require the installation of a simple groundwater monitoring device such as a piezometer tube, or a tube with perforations that measures the level of the water during high-water months to determine the type of system required. Presumably, the department could issue play temporary permit to begin construction to determine the type of system required at a later date.

Standard Septic Systems

As you might have guessed, a basic septic system is usually the most cost-effective form of wastewater disposal. The vast majority of septic systems installed are this type. Throughout most of the region, the water table separation is ample enough to not require any sort of alternative system. There are a few circumstances and areas where the water table is high enough that an alternative system is required. These areas include low-lying areas near wetlands, areas along creeks and riverbanks, and so forth.

Alternative Septic Systems

In the event it is determined during your site analysis that a standard septic system is not suitable do to the soil composition, height of the water table, or both, a variety of alternative systems can be used, so long as they are approved by the state. There are both proprietary, and non-proprietary systems that are approved.

Proprietary Septic Systems

A proprietary septic system is basically a name brand system. At the time of this writing, it is my understanding that there are two proprietary septic systems that are approved with the State. These companies include Presby Environmental and Infiltrator Water Technologies. Both of these companies utilize proprietary materials and methods to enhance the capabilities of a standard system. In years past, other proprietary companies have been approved in the State for septic systems. Some of these required specific maintenance and or maintenance agreements. It is important to be wary of these systems. In the event they no longer service your area, it may be difficult to keep your system in compliance. It is my understanding that Presby nor Infiltrator Water Technologies’ ATL require a specific maintenance plan. It is also my understanding that both of these systems can be used as long as the water level separation (discussed in the site analysis section) is at least 12 inches. Another notable benefit is that neither of these systems require an electrical connection or the use of expensive pumps.

Other Alternative Septic Systems

There are other methods of wastewater disposal that can be used when needed. The state of Idaho has a technical guidance manual that is updated quarterly which includes all of the approved types of septic systems for wastewater disposal. There are more than two dozen types of approved methods, but below are a few of the more common types Alternative Septic Systems.

Gravelless or Chamber Systems: a conventional septic system usually has gravel embedded around the perforated pipes to promote drainage. Gravelless Systems can you use plastic Chambers or pipe wrapped with media that can help distribute liquid into the soil. These systems can also be used in conjunction with Raised Mound systems in areas with high groundwater.
Raised Mound Systems: Mound Systems are commonly referenced in our area when needed due to high water levels, and can be used to increase the distance between the drain field and the water level by building up the soil over the leach field and pumping the wastewater up, and into the raised area.
Drip Distribution Systems: Drip Distribution Systems pump the liquids into the drain field in timed intervals as required by the soil type.
Aerobic Treatment Units: ATUs introduce aeration into treatment tanks which increases natural bacterial activity helping decompose waste.

Other systems include tanks with sand filtration, tanks that promote evaporation as opposed to liquids being reabsorbed into the soil, and tanks that contain plants and other natural elements that help treat the wastewater.

Separation requirements

As a final consideration when looking at your site plan, project, or even the purchase of land, it’s important to know that bodies of water can have an impact on the allowance of a septic system within a certain distance.

Septic Drain Field separation requirements (standard drainfield)

Permanent or intermittent surface water (ie creek, river, etc) = 100 to 300 feet depending on soil type
Temporary surface water (ie. irrigation canal) = 50-75 feet depending on soil type

Septic Tank separation requirements

Permanent or intermittent surface water (ie creek, river, etc) = 50 feet.
Temporary surface water (ie. irrigation canal) = 25 feet depending on soil type

There are also other separation requirements such as separation from your well, and separation from your property line.

Resources:

State Resources and Manuals

Eastern Idaho Public Health Online Septic Program Resources

State of Idaho Individual/Subsurface Sewage Disposal Rules manual

State of Idaho DEQ Technical Guidance Manual
Useful TGM Notes:

Section 3: Standard Subsurface Disposal System Design
Section 4: Alternative Systems. This section is quite long, and describes each system in full. You could compile a list of approved systems from the table of contents. Each type of system is listed under the heading 4.#.
Section 4.1.3: There is a table of compatible alternative systems in this section that I find very useful.
Section 5.14: Proprietary Wastewater Treatment Products. Presby is contained in this list, but the Infiltrator ATL is not yet listed. I’ve attached the letter of approval for the ATL and another new proprietary system (Eljen GSF). Also attached are manuals for Presby and Infiltrator ATL.

Separation Requirements

Proprietary Systems

Presby Environmental’s Enviro-Septic System

Infiltrator Water Technologies’ Infiltrator ATL System

Eljen Corporation’s GSF System

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