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Heat Systems and what you need to know for Teton Valley’s climate

September 20, 2016 By Tayson Rockefeller Leave a Comment

10-various-central-heatWhenever I am showing property or listing homes for sale, (particularly this time of year) this tends to be a “hot” topic. How is the home heated? How efficient is the system? Is it comfortable and reliable? All good questions, but 1 system can’t check all the boxes in most cases.

Efficiency:

Since there are different types of heating systems that can be used with different fuel sources, let’s focus on fuel types first. Since we do not have Natural Gas infrastructure in Teton Valley, we will focus on the most common types, Propane and Electricity. As I type this, propane is at an absurdly low price per gallon, roughly $1 per gallon. Electricity is measured in kilowatt hours, and is roughly 7 cents per kilowatt. It’s important to know that propane can fluctuate, and can even be volatile at times. Electricity will rise over time, but has historically been very predictable. Further, our region (mainly Idaho) operates mostly on hydroelectric power. In fact, Idaho produces roughly 60% of it’s power needs by means of hydroelectricity, more than any other state in the west at this time.

Electricity:
7 cents/kilowatt (Fall River Electric Estimate, 2016)
BTU’s produced by 1 kilowatt = 3,413

Propane:
$??/gallon
BTU’s produced by 1 gallon of Propane = 91,500

Let’s do the math:

Using the above information, we can determine 1 gallon of propane = about 27 kilowatts. That said, at the current 7 cents per kilowatt, 1 gallon of propane would need to be $1.89 per gallon to be comparable. Since most forms of electric heat are 100% efficient (or more) and propane is usually 90% efficient (or less) let’s reduce that $1.89 an additional 10% to $1.70/gallon. Moral of the story? If propane is is less than $1.70 per gallon, your dollar is probably travelling a little further. If propane is over $1.70 per gallon, your electric forms of heat make more sense.

Types of heat, comfort, pros & cons:

This is a big one, what is the most comfortable form of heating (or cooling)?

In-Floor
In-floor heat systems can be propane fired or electrically heated, so you can choose whatever makes the most sense on the efficiency front. It creates a nice warm floor, great for cold feet during Teton Valley’s winters. The downsides? In-floor systems are known for taking a full day to warm up, and don’t regulate temperatures easily. Also, without an alternative source, these systems don’t provide a cooling solution.

Wall Heaters
These little electric heaters have a self contained fan and an electric coil. They are cheap to install, and usually have a thermostat for each room, so rooms that are not being used can be turned down, or turned off completely. These systems have been concern for fire hazard, and tend to be noisy, especially when they are not regularly cleaned and maintained.

Baseboard Heaters
Similar to the wall heaters, though these units radiate heat rather than force, or blow heat over electric coils. They rely on convection to circulate the heat throughout a room, which is why you oftentimes see them below a window. Heat rises, cold air (through the least insulated area in a room – ie a window) falls, and thus convection is created.

Forced-Air (traditional furnace)
This form of heat is a centrally located blower (called an air handler) with coils heated electrically or with propane. The air blows over the hot coils, heats the air, and circulates the warm air throughout the rooms. The ducts attached to the air handler can have dampers that shut off the ducts to certain rooms, creating a zoned system. However, without zoning capabilities, forced air systems tend to send too much heat to certain rooms, and not enough to others. On the bright side, the do heat up, or cool down very quickly.

The above about sums it up for the types of systems we typically see in this area, though I did not mention geothermal, heat pumps, or mini-splits. These systems transfer heat, rather than creating it. They work in conjunction with a refrigerant, a condenser, and a compressor. Without going into detail, these systems can work by transferring heat from the outside in, or from the inside out, depending on the season and system demands. With today’s technology, heat pumps can have a hard time creating heat efficiently in the areas extreme cold. However, some mini-splits (an outdoor compressor and an indoor fan) are now operating efficiently down to approximately -15 degrees F. In addition to having a heating an cooling solution in one package, these systems can be very efficient, sometimes as much as 200% (estimated) efficient in ideal conditions. That means propane would need to be 85 cents (or less) per gallon to meet these efficiency standards.

Reliability:

Reliability can be a concern, particularly for those from areas prone to winter outages due to ice storms. That isn’t too common here, though the power will go out periodically – usually not for long. However, if it does, a small backup generator isn’t likely able to keep up with your home’s essentials such as the refrigerator, freezer, emergency lights, wifi (kidding) as well as an all electric heat system. However, a propane fired in-floor system, forced air, or wall mounted unit uses very little electricity. In most cases a reasonable generator won’t have any issue keeping up.

sources: National Hydro Power Association, hydro.org

 

The Teton Valley Market: Where it’s been, Where it’s going

September 3, 2016 By Tayson Rockefeller Leave a Comment

The Teton Valley Market: Where it’s been, Where it’s going: September 2016

Graph

I’m not going to say that nobody saw the downturn coming in 2008. We were all going crazy. Most of us that thought it might happen? We were ignoring it. We were too busy. It did though, and like our grandparents before us, many of us think about it today. To me, it was yesterday. Sure, recovery is still a commonly used term, even though (by all appearances) our market is recovered. Sort of.

I’ve read a few recent articles. One was a few months back by a group in Jackson and Jonathan Schechter, “Our mess will fuel suburban growth”. Jonathan was referring to his expectation for Teton Valley’s continual growth as the housing market, and frankly the available land on the other side of the hill tightens it’s grip. This article, and a few like it sparked several rhetorical articles and comments from those all too concerned with our sudden growth spurt. This group was concerned with the amount of growth we saw leading up to the recession, and the possible ramifications of too much growth all at once.

Personally, I don’t think things are growing too fast. We’re not seeing a large amount of construction, virtually no development, just market recovery and prices continuing to rise. By all appearances, home prices are on par with years leading up to the recession, if not close to pre-recession levels. However, this is not taking into account inflation or construction costs. Believe it or not, the recession began nearly a decade ago. Times were different. Construction costs were less expensive than they are now, and the housing situation in Jackson is worse than ever before.

The relief comes in land prices. Pre-recession, some developers made out like Bandits. They got in while things were hot, and got out before they were not. Some lost their hide. Lest we forget many locals who’s lives will never be the same after risk, and no reward. Bankruptcy, short sales, foreclosures, it was a mess. I mentioned relief. Though these terrible things happened to good people, and bad people, it is all behind us. We now have a huge inventory of available, developed land ready to be put to good use in the coming years, and possibly, decades. No, it’s not going to be a thousand years like some predicted throughout the recession. I remember 3 acre parcels selling at $200 to 300,000 – it’s where the big money was. Now that those same lots are under $100,000, it makes inflated building prices manageable, and the whole situation more affordable. With the huge inventory, supply and demand is not as much a factor (unless you get into supply and demand of niche locations) and Teton Virew lots a-plenty.

Where’s it going?

With the above said related to current building costs, it is my prediction that I can make an educated guess on where the market is, in relation to where it’s going in the near term. I believe that residential is nearly fully recovered, though we can expect annual growth with regards to real estate and it’s investment properties related to inflation and growing populations. Land, unless in areas of high demand where those with disposable income can comfortably spend more such as resort areas or River front properties will continue to grow, though only slowly until supply is diminished and there is renewed demand. I believe an indicator where we will need to recognize a market approaching dangerous levels will be an explosive jump in land prices. Am I saying we should prepare for another major housing collapse at that time? Not necessarily, but remember Real Estate is cyclical, and even more so in resort areas. Cycles, or slight market adjustments over time are actually healthy in some ways.

Where it’s been:

Since I tried to depict scenarios for both the short and long term foreseeable future, here’s a bit of information as to where the market has been. I selected two quality subdivisions, and found a home that sold pre-recession, during the recession, and recently. The first, Brookside Hollow – a popular, quality development in Victor, ID an area in Teton Valley reliant on recreation markets including our own, and Jackson Hole. The second, Comore Loma – a quality, scenic development along the foothills overlooking Ammon, ID (Idaho Falls) an area with low unemployment reliant on local commerce, business, regional hospitals, and the INL technology site.

Comore Loma, Ammon ID

April, 2005: $181,000
February, 2008: $208,500
February, 2014: $185,573
January, 2016: $210,000

Brookside Hollow, Victor ID

January, 2006: $396,000
July, 2012: $198,000
December, 2015: $350,000

Looking at the information above, it becomes obvious that recreation markets obviously see a larger depression in housing crunches and times of economic distress. If I gave you the numbers of the sales prices and the years sold for the home in Ammon, you probably wouldn’t be able to match them up. The market, though they saw a depression, was far less volatile. The Victor market (remember these homes are somewhat comparable) is much more lucrative, however.

The moral of the (my) story for the analysis above is that both markets appear to be sustainable in time, if you can live with the ramifications of a housing collapse in a recreational area.

Loan Tips – How to Prepare

August 13, 2016 By Tayson Rockefeller Leave a Comment

approved-or-rejected***Tayson is not a lender. confirm the below “good practices” with your lender.
As our local market becomes more and more competitive with multiple offers and properties moving quickly, it’s becoming ever-important to be prepared to provide a pre-qualification letter along with your offer, and to be prepared to close on time. We’re seeing a number of sellers continue to market their home for sale for backup offers during the contract process with the buyer. If the seller receives a backup offer they usually can’t terminate your contract (unless the contract specifically states they can) without the buyer failing to meet a deadline, or failing to close on time. In most cases the important deadlines are timely earnest money delivery, and proof of funds or loan approval subject to appraisal and underwriting on or before the dates specified in the contract. Work with your realtor to ensure all timelines are met, and work with your lender to ensure you close on time. Some tips, below;

 

How to Prepare:

The best practice if you are thinking of buying in the near future would be to begin preparing well in advance, though this isn’t always possible. Follow these steps to the best of your ability.

  • Save your pay stubs. If you foresee a new loan in your future, become extra diligent about keeping record of large purchases *<—avoid if possible* , keeping pay stubs, bonus check stubs, and keeping track of any expenses or income that is out of the ordinary.
  • Start collecting your tax returns for the last 2 years. If it’s 2016, you will need your complete 2014 and 2015 returns. Organize them, separate your w-2’s and any 1099’s. If you need to collect these items from your employer or accountant it could take valuable time during a contract – sometimes too much time.
  • Get in the habit of “digitizing” all of your records, or stop in to an office center periodically to scan, label and organize all of the documentation needed. In addition, keep the originals in a safe place that is easy to access until after closing.
  • If you are depositing money gifted from someone that is not immediate family (or traceable funds), in some cases it cannot be used unless the cash has been in your account longer than the lender will look back in your records. Always consult with your lender, but this tip could be helpful, and you would need to obviously deposit the funds well in advance.
  • In keeping with the above, if you do plan on using gifted funds, speak with your lender early on in the process about properly going about this. It is extremely important to follow the proper procedures and collect documentation that your lender requires such as proof of where the funds came from, or a gift letter. Also, remember to keep documentation of deposits. If you are selling a car to come up with a down payment, remember that you will need proof of ownership, bill of sale, etc. Consult with your lender if you are selling an item to increase cash for closing.
  • If you are selling a home to relocate, obtain a complete record from the title company or real estate professional that helped you. Your lender WILL need this.
  • Think about speaking with a lender early on – very early on in the process. In some events home buyers find they have an outstanding balance they were unaware of, or a fraud issue that is affecting their credit. This can take months to clear up, and it’s best to find out about this prior to finding your dream home that needs to close in 1 month.
  • Try not to close any investments accounts, or open new accounts based on credit, including obtaining new credit cards.
  • When saving $$ for your down payment, remember also to save for closing costs, which can be several thousand dollars. Don’t let this come as a surprise after writing your offer.
  • Continue life as normal. PAY ALL BILLS on time, including credit cards, auto payments, etc.
  • CONSULT WITH YOUR LENDER on all items! If you are considering a job change, a large purchase, anything, consult with your lender. Remember that your real estate agent and/or the seller are not lenders.

Just like with your Realtor, most lenders can help you with any property as long as they can work in your state. However, like your Realtor, it can pay off to work with a lender that understands the nuances of our local Teton market such as long appraisal times, or any specific loan requirements related to the location of the property, proximity to wetland, etc. I have been in several circumstances where an out-of-state lender will contact me after reviewing a settlement statement and say “Tayson! There is no reference to the transfer tax!” Yes, yes – that is because we do not have a transfer tax… In addition, most buyers will find that unless working with a “big box” brokerage, they probably won’t have to pay their real estate firm any fees related to the services, even if they do not buy a home. However, interest rates and closing costs can vary from lender to lender. It’s a good idea to shop for a lender that is not only a local market expert, but one that has good rates and reasonable close costs.

Why do listing agents always seem to attend showings here?

July 28, 2016 By Tayson Rockefeller Leave a Comment

Crazy RealtorNotice how I worded the question above, and not “Should listing agents attend showings”. The reason is that I often hear this question from prospective buyer customers, or, customers working with another broker while I am attending a showing for one of my listings. If you only have had experience with real estate in the Jackson & Teton region (including Alpine & Star Valley) you are probably used to the fact that there will very likely be 2 agents at a home showing. The listing agent, and the agent working with the buyer. It’s a way of life out here, whether it’s a 100,000 dollar home or a 1 million dollar home.

If you are not from the area, you may have had a different experience. In the Snake River area (Idaho Falls etc.) all of the agents pay a monthly or annual fee to have “infrared key access” in the form of a card, or even a smart phone application. There might even be instructions on the listing that provides contact information to the occupant in which case the agent can call the occupant directly, whether it’s a tenant or the home owner. In areas like Malibu, it is expected that listing brokers attend showings only for higher dollar listings, but not all showings.
This can go both ways I suppose, what about buyer’s agents not attending showings, for instance – ahem – buyer’s working with an agent in another state (maybe a state just East of Idaho?) that can’t attend a showing for a home their customer wants to see on the Idaho side? Would it be acceptable to just send them over and let the list agent take care of it?
OK, so maybe the last example is clearly not the right thing to do, but there are very different ways of doing business throughout the united states, and Canada for that matter. Here, some feel that we are held to a higher standard as we are members of the same MLS as the high end Jackson listings. So… to attend, or not to attend, the pros and cons weighed below;
To attend! (pros):
From a seller representative standpoint, there are some definite pros here IF the agent is timely, knowledgeable, and helpful with important facts about the house without being overwhelming. Also,it may be that the Seller hired the list agent specifically from a trust standpoint – someone to look after the home, lock all doors, keep an eye on personal belongings, and so on. After all, a buyer’s agent on a home tour of 8 homes might have a hard time keeping track of everything.
To not attend… (cons):
Some buyers (specifically from areas where they are not used to 2 creepy real estate agents following them around) feel that it’s strange to have the listing agent present at every showing. Admittedly, it can get a bit overwhelming. “OK all, our next home we will be meeting John with ABC realty” (long introductions etc.). John goes about explaining everything I explained in the car – or here’s a good one; My customers walk in HATE the place, would prefer to walk back out but John sucks us into a long description of the home, the sellers, the neighbors, the area, where he was raised, his favorite local restaurant, 15 reasons to move to Teton Valley… you get the idea.
Summary
In the opinion of most her locally, the pros outweigh the cons, attend all showings. At the end of the day, however, it is up to the listing agent, and the seller. This is a discussion that needs to be had with the seller and the list agent. My advise? First, ask the seller what they prefer. Maybe the seller remembers the time when they were once buyers and John from ABC Realty gave them nightmares for the next 6 months. Or, maybe during their last home sale they discovered personal belongings went missing after a showing. The suggestion I make to my clients? If you would like me to attend showings, that is what I shall do. In the event I cannot (there is only one of me) allow me to put  a combination lock box on the door. This has allowed for last minute showings that have produced contracts.
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