Teton Realty Blog

Teton Region Real Estate Market Stats, Articles & News

But… That Lot is Smaller!

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I know I have written about this before, and I’m sure there is an article buried in the archives harping on the same issues here, but I think it’s an important topic.

Whether you are a Seller looking to value your own land, or a Buyer looking to acquire land of your own in the Tetons, understanding what impacts value is extremely important. This comes up time and again, particularly when it comes to the size of a parcel when compared with another. While the size of a parcel can obviously have an impact on value, it may not always be as much as you think. As an example, the difference in value of a 2.5 acre parcel compared with a 3.2 acre parcel (despite a 20%+ difference) will often be negligible. To further elaborate the example, the value of a 1 acre parcel adjacent to a 2.5 acre parcel in the same development may not only be negligible, but in many cases the smaller parcel could carry significantly more value. With that being said, let’s go through my list of value considerations when comparing parcels or lots that are otherwise “like in kind”, such as those in the same development, or in nearby developments.

In particular order, and of most significance to least in terms of my opinion of value, take a look, below.

1: View. While I wouldn’t necessarily always put this attribute on top, it is often of great consideration, particularly in subdivisions comprising 1-5 acre parcels, which is a typical size throughout the county. A parcel with view protection by way of building envelopes, terrain, roadways or otherwise can have significantly more value than one with some type of obstruction, or potential for obstruction. This can become even more important when it comes to Teton views.

2: Location. I’m not necessarily talking about location inside of a particular area, but location compared with another property sale or listing. A parcel adjacent to a main county or state roadway would often be considered of lesser value when compared with one nearby that might have more privacy. Location considerations can also come in the form of nearby features, which leads me to the next point.

3: Features. As indicated above, features and location often correspond with one another. A row of trees, a fire suppression pond, a berm, canal or any number of property features (which don’t necessarily need to be on the properties themselves) can impact value or bring added value.

4: Subdivision Attributes. While the property that one might be investigating may not even be in a subdivision, the chances are likely that one in the market for a building site is going to be looking at properties that are. However, not all subdivisions are created equally. Some offer advantages such as paved roads or favorable covenants and restrictions. In many cases, properties with minimal restrictions or no restrictions at all can bring more value than one with firm design criteria or subdivision restrictions. On the flip side, a development with great quality as a result of a well-organized homeowner’s association with robust design guidelines can also create an advantage compared with another nearby development that does not. These considerations can come in many different shapes and sizes. Another great example is rental restrictions.

5: Environmental or Adjacent Property Considerations. Examples can be wide-ranging, but might include high ground water which could prohibit certain construction types or add cost to construction methods, nearby factors such as farm equipment or older homes, and so on. The list can go on from here, but like many of the other considerations above, can also dovetail with some of these other listed items.

6: Size. Last, but not necessarily always least as I prefaced in the beginning of this article, size. I hope this article has made it easier to understand why acreage and its impact on value can be deceiving. Remember that a larger parcel often carries the same benefits with respect to flexibility and rights that a smaller property may have. If you’ve read many of my other articles, you’ll know that typically when it comes to subdivision parcels, most properties can accommodate a single family home and guest quarters, whether it’s 1 acre or 100 acres. Further, splitting land can challenging and oftentimes impossible. Teton County’s land development code does not provide opportunities for additional dwelling units without specific and rare zoning considerations. While size can definitely have an impact on value, it needs to be significant enough to the point that it may no longer be comparable with another property. These limitations on smaller parcels could include room for livestock, limitations on building a barn, or providing ample space for a detached guest house.

Rental Analysis – How do I understand Rates and Projections?

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There is a lot to unpack here, and it’s important to know that rental markets change extremely quickly in the scheme of things. While COVID played a significant role in the short-term rental industry and our market locally, the long-term rental industry has been evolving at a fast pace as well. I’ve made some market predictions about both industries over the years and despite the outcome one thing is for sure, you don’t necessarily rely on what you hear today, because it’s inevitably (almost) always yesterday’s news.

Valuation
When it comes to valuing real estate, real estate agents (not appraisers and not offering appraisals) and appraisers use similar methods which include different types of valuation. The easiest, and most common is the comparable sale method. We essentially adjust the sales price of comparable properties based on differences between the property we are valuing and the property that has actually sold. Obviously markets change, so we generally don’t look back further than 6 or 12 months. The sales information is normally available mostly as a courtesy of the multiple listing service, a database of sales activity stored by local Realtor associations. Since Idaho is a non-disclosure state, counties often find difficulty valuing property for the purpose of tax assessment, so the public data is often skewed.

Depending on the area, rental data may be collected by a multiple listing service. However, in our area, it is not. The reason for this is based on several factors, but in my opinion it is primarily because Idaho does not require licensure for property managers. For this reason, property managers in the Teton Valley area are generally not members of listing services or Realtor associations, so they do not record the data. Even in Wyoming where property management does require a real estate license, much of the data goes unrecorded. So, how is the data tracked? Depending on whether we are talking about short-term or long-term rentals, there is some data that might be available, but often, you need to take it with a grain of salt.

Short-Term Rental Analysis
Much like the Zillow “Zestimate”, there are “data mining” companies and tools available that can help generate valuations even without multiple listing service data. Because Idaho is a non-disclosure state, Zillow does not have access to sales data. They do, however, have access to listing price data. Presumably when a property sells (even though Zillow may not have access to the actual sales price), they can make some assumptions based on market conditions, how long the property was on market before it sold and other metrics to estimate (or zestimate…) the sales price to help generate the “Zestimate”. There are similar tools available in the short-term rental industry available such as AirDNA and other data providers that are able to collect data. While I’m not an expert on AirDNA, my assumption is that they collect data from their own subscribers that report information, as well as data they receive from some of the marketplace giants like Airbnb and VRBO. I also assume that this data may be skewed based on what they receive. If it’s just a blocked calendar, one probably should not assume that it is necessarily a paying guest since it could certainly be a homeowner blocking their own calendar for personal use. Even though this data may in some instances be conservative, this is my best guess as to why we often find AirDNA provides data that may be unattainable in the real world (here in Teton Valley).

Long-Term rental analysis
This one is even more challenging. Not only are property managers not typically a member of the multiple listing service, but they rarely collaborate. This, coupled with the seasonality of long-term rentals (and short-term rentals, for that matter), can create some volatile expectations for both investors and tenants. Many years ago before the market hardly began to improve after the fallout in 2008, I distinctly recall many conversations with those trying to prepare studies and gathering data in order to do so. Similar to my life today, I was completely underwater trying to provide this data as a courtesy, often off the top of my head. While I’m generally pretty good at doing so, and can spit out fairly accurate information, it’s unlikely that any of the data was extremely scientific when it came to absorption, rates, and so on. While short-term rentals at least have some available information that might point to market conditions such as National software providers like Airbnb or VRBO, the local rental market does not. As a result, long-term tenants often find themselves jumping from property manager to manager and newspaper ad to marketplace listing to get a grasp on inventory, or lack thereof. I will give a shout out and link below a great effort set forth by the Community Resource Center of Teton Valley. They (painstakingly I’m sure) canvas the most well-known sources for long-term rental listings throughout the community and compile them into one list. It’s not perfect, and not up to date to the minute, but it’s pretty darn good.

The bottom line? When it comes to understanding rental markets in Teton Valley, trust your local professionals. While Realtors have a pretty good handle on most things around here (really, the local industry is lucky to have such a hardworking, professional and honest group) not all of them are heavily involved with property management. The best advice that I can give is to trust local property management companies. Similar to our group of real estate professionals in the area, all of the property managers in Teton Valley are extremely well versed and honest. Since I’m listing shout-outs (and yes, I do have an interest at stake here), Kerstyn at Teton Valley Property Management is amongst the very best.

Community Resource Center of Teton Valley

Teton Valley Property Management

Shared Wells, Are They Legal In Idaho?

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I’m going to call this a “read at your own risk” article based on limited knowledge of the subject, but I also feel the need to provide the data as it is so much different than what we have historically understood. The topic? Shared Wells.

Historically, multiple property owners have (or maybe thought they had) the ability to share one well with multiple homes. There is/was always a limit as to the number of homes which the Department of Environmental Quality would be involved for water monitoring. A separate entity that controls water in the State of Idaho, The Idaho Department of Water Resources (IDWR) position on shared wells was that most of the water would be returned to the aquifer, and a shared well between multiple homes was really no different than each home having an individual well as long as the usage did not exceed the state’s limitation for water usage for domestic water for each parcel without water rights, 13,000 gallons per day including up to 1/2 acre of landscaping.

Recently, however, an amended Snake River Basin moratorium for issuance of new water rights has created some challenges when it comes to shared well systems. A byproduct was (I assume inadvertently) prohibiting new water rights for shared wells. Since one parcel would be sharing a well with other unrelated parcels, legally, that apparently requires an additional water right with minimum CFS (Cubic Feet per Second) or diversion rate requirement to provide sufficient water to the additional homes. Since new water rights are not being issued, technically, in order to legally have a shared well, these owners would need to find an additional groundwater right that meets the CFS requirements or find a way to mitigate water from other areas, essentially by drying up other acreage.

Historically, many communities and municipalities have been able to share wells, but that would require municipal or domestic water rights. Since water rights are so valuable in Idaho, new developments with shared well systems that are not a part of an existing system or municipal system may become challenging, and that unfortunately trickles down to small systems including one to three homes sharing wells for the purpose of efficiency.

Stay tuned on this topic and (of course) do your own research on this contentious matter.

My data and source for this article was my interpretation of a conversation with an employee at the Idaho Department of Water Resources on September 20th, 2023.

Wetland: What Does It Mean and How Can It Impact My Property?

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***Article Update: Kent Werlin is the Senior Wetland Scientist with Biota Research and Consulting in Jackson, Wyoming. Kent was kind enough to edit my article and provide updated, more accurate information. My disclaimer stands (do your own research), and see the updated article below:

Wetlands are often confused with floodplains and flood zones. Flood zones are not always wetlands, and wetlands are not necessarily located in floodplains, though there are circumstances where either could be true. Flood zones can occur in areas next to large bodies of water or runoff areas and are often considered higher risk when it comes to flooding. However, any property can flood, not necessarily only properties in a floodplain.

Wetlands are regulated by the U.S. Army Corps of Engineers and Environmental Protection Agency under the Clean Water Act. To be considered a “wetland”, an area must meet all of the following  criteria:

1) Wetland Hydrology: To have wetland hydrology, an area must be at least saturated in the upper 12 inches of the soil profile for a period of 14 days during the growing season in 5 out of every 10 years. Active monitoring of hydrology via the use of shallow groundwater monitoring wells and/or wetland hydrology indicators are utilized by wetland professionals to determine the presence of wetland hydrology. These indicators include the presence of surface water, saturation, geomorphic position, oxidized rhizospheres (root channels), a dominance of wetland vegetation, and others.

2) Wetland (Hydrophytic) Vegetation: roughly a quarter of the plant species in the United States grow in wetland areas. To be a wetland, an area must be dominated by facultative or wetter plant species based on the National Wetland Plant List, which designates plant species as upland, facultative upland, facultative, facultative wetland, or obligate wetland. These are described below:

  • Upland – plant species that occur in non-wetland areas 99% of the time and do not indicate wetland conditions (e.g. sheep fescue, sagebrush, western wheatgrass)
  • Facultative Upland – plant species that occur in upland environments 75% of the time and in wetlands 25% of the time (e.g., orchardgrass)
  • Facultative – plant species that occur in wetland environments 50% of the time and in upland environments 50% of the time (e.g. Kentucky bluegrass, common timothy, and meadow foxtail)
  • Facultative Wetland – plant species that occur wetland environments 75% of the time and in upland environments 25% of the time (e.g. Baltic Rush, reed canarygrass)
  • Obligate Wetland – plant species that occur in wetlands 99% of the time. These species are generally indicative of wet areas. (e.g. beaked sedge, Booth’s willow, hardstem bullrush)

3) Wetland Soils: Wetland soils are often referred to as hydric soils. These soils can generally be analyzed by digging a 20-inch deep hole and looking for hydric soil indicators that indicate a high water table and/or periodic saturation within the upper horizons of the soil profile. These indicators include an abundance of organic soil matter, oxidized iron (rust colored) or manganese (purple) concentrations, and others.

Can you build in Wetland?

Wetland areas do require special permits and approvals. But first, they must be identified as wetland, usually by way of what is referred to as a wetland or aquatic resource delineation performed by a properly trained wetland consultant (such as the co-author of this article, Kent Werlin, the Senior Wetland Scientist with Biota Research and Consulting) and following the wetland delineation protocol approved by the Army Corps. Wetlands in Teton County are subject to both federal and local (county) regulations which differ in their requirements.

If a property in Teton County, Idaho shows indications of wetland presence based on the nationwide National Wetland Inventory (NWI) mapping (can be viewed via the Teton County GIS Mapserver), the county will generally require a delineation before approving subdivision or issuing grading or development permits for the subject property. Under current county regulations (Teton County Land Development Code 2022), the county requires either a 50′ or 100′ development setback on wetlands, depending on the level of analysis conducted. If a site-specific wetland delineation is conducted, the county will place a 50’ development setback on all wetlands delineated by a wetland professional and approved by the Army Corps. If there is no site-specific wetland delineation conducted, then the county falls back on the NWI mapping and requires a 100’ setback on NWI mapped wetlands.

At the federal level, the Army Corps requires a permit application for the placement of fill material (e.g., rock, gravel, concrete, soil, etc.) in jurisdictional wetlands. The Army Corps has a suite of streamlined Nationwide Permits for activities that impact up to 0.5 acres of wetland. If wetland impacts exceed 0.1 acres, then the Army Corps requires a Compensatory Wetland Mitigation Plan that involves the creation of new wetlands or enhancement of existing wetlands to compensate for development-related wetland losses.

A recent supreme court case (EPA v Sackett) decision has put the jurisdictional status of some wetlands at the federal level in question. The Army Corps is in the process of modifying their technical guidance for determining jurisdictional status based on the outcome of this court case and should be issuing guidance in the coming months. While it may be possible to impact wetland areas with the proper permits, it is important to remember the reason that these regulations exist….to protect wildlife, habitat, and waterways, often considered a key cornerstone of Teton Valley’s natural beauty.

END UPDATED ARTICLE – Special thanks to Kent Werlin, biotaresearch.com

Disclaimer: As always, I need to start out this article with a disclaimer. I know enough about many of these topics to be dangerous – which is dangerous. Always seek the advice of appropriate professionals as this information is subject to change as well as my own interpretation. I don’t often go back and update old articles, so I’ll leave this here.

Wetland should not be confused with floodplain. Flood zones are not always wetland, and wetlands are not necessarily in floodplains. Flood zones normally occur in areas next to bodies of water or runoff areas and are often considered higher risk when it comes to flooding. However, any property can flood, not necessarily only properties in a floodplain or a wetland.

How to Identify Wetland

Wetland can occur even in areas not directly adjacent to a body of water and is usually determined by three primary factors:

1) Hydrology: Hydrology indicators can include the presence of surface water or wet soils as determined by evidence or review by a wetland professional utilizing different tools or testing to understand the presence of water.

2) Vegetation: Roughly a quarter of the plant vegetation species in the United States grow in wetland areas. Plant species can be classified in a number of different ways as identified below in order of wet to dry:

  • Obligate Wetland (usually very indicative of wetland areas) ie Sedges (which have triangular, sharp stems) and Willow
  • Facultative Wetland (usually occur in wetlands, but occasionally found in non-wetlands) ie Horsetail, Baltic Rush
  • Facultative (equally likely to occur in wetlands or non-wetlands) Meadow Foxtail, Timothy, Brome, Bluegrass
  • Facultative Upland (usually occur in non-wetlands, but occasionally found in wetlands) ie Potentilla
  • Obligate Upland (almost always occur only in non-wetlands) ie Sheep Fescue

3) Soils: Wetland soils are often referred to as hydric soils. These soils can be analyzed by digging a hole (usually 12-18 in deep) and looking at indications of saturated soils that usually show indications of oxygen depletion. This can be evidenced (essentially) by rust in the soils and the coming and going of water, creating oxidation. Oxidation can be due to iron and is usually identified by orange flecks in the soil or manganese which will reveal itself with a purple color.

Can you build in Wetland?

Wetland areas do require special permits and approvals. But first, they must be identified as wetland, usually by way of what is referred to as a Wetland Delineation performed by a properly trained wetland Consultant.

If a particular property shows indications of wetland, Teton County, Idaho will generally require a Wetland Delineation. They have requirements of 50′ or 100′ setbacks, depending on the delineation findings. If the project looks like it will encroach within 50′ of wetlands as indicated by the Delineation, the county may require a Jurisdictional Determination (JD) from the Army Corps of Engineers. If there are any questions on a project, despite setbacks, the Teton County Planning Staff may still send the information to the Corps for review. A JD is the process of Determining whether areas indicated as wetland are regulated by the U.S. Army Corps of Engineers under section 404 of the Clean Water Act and/or Section 10 of the Rivers and Harbors Act.

If a property is determined to be wetland, with the proper permits it may be possible to impact up to 0.1 acre of wetland for driveway, septic, and a home site. If wetland is mitigated to another area, these improvement areas can be increased to 0.5 acres.

Wetland areas can make tremendous home sites, but it is important to remember the reason that these regulations exist in order to protect wildlife, habitat and waterways, often considered a key cornerstone of Teton Valley’s natural beauty.

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