Flood zones
Recently we were taken to task by a listing agent over our requirement for a property to have Flood Insurance In Nampa in order to get the mortgage. It was not disclosed on the Real Estate Listing or on the Real Estate Forms. But when we pull a flood zone certificate for Nampa, it came up as a flood zone.
The Treasure Valley is full of flood zones, in areas where you might night even think they would exist. Most of us consider the Boise River to be a flood zone, and that is the only area. But you would be surprised, Five Mile Creek, Ten Mile Creek in Meridian and Boise are Flood Zones, and Indian Creek, which stretches from Kuna/Mora to Nampa to Caldwell is also a flood zone, along with lots of smaller creeks in Star, Middleton, Eagle and for the most part South West Idaho.
So how do you protect your homeowner/Seller/Buyer….be educated.
Federal Emergency Management Administration or FEMA make is pretty darn simple to determine if you are in a flood zone, they have an EXCELLENT, interactive map on their web site that shows specific FEMA Flood Zones, you can find that link here: FEMA Flood Zone Map Link
There are many different type of flood zones, each one is listed below and each one will have a different insurance premium, from a couple of hundred of dollars per year, to a boatload of dollars per year:
Zone C, Zone X: Areas determined to be outside 500-year floodplain determined to be outside the
1% and 0.2% annual chance floodplains.
Zone B, ZoneX500: Areas of 500-year flood; areas of 100-year flood with average depths of less than 1
foot or with drainage areas less than 1 square mile; and areas protected by levees
from 100-year flood. An area inundated by 0.2% annual chance flooding.
Zone A: An area inundated by 1% annual chance flooding, for which no BFEs have been determined.
Zone AE: An area inundated by 1% annual chance flooding, for which BFEs have been determined.
Zone AH: An area inundated by 1% annual chance flooding (usually an area of ponding),
for which BFEs have been determined; flood depths range from 1 to 3 feet.
Zone AO: An area inundated by 1% annual chance flooding (usually sheet flow on sloping
terrain), for which average depths have been determined; flood depths range from 1 to 3 feet.
Zone AR: .An area inundated by flooding, for which BFEs or average depths have been determined. This is an area that was previously,
and will again, be protected from the 1% annual chance flood by a Federal flood protection system whose
restoration is Federally funded and underway
Zone A1-A30: An area inundated by 1% annual chance flooding, for which BFEs have been determined. .
There are a bunch more, but you get the picture, Zone X is the best, no insurance may be required. And I say No insurance MAY, but tell that to people on the Boise Rive in the spring, who were categorized NOT to be in a flood zone, buttheir backyards had beach front this year.
Below are 3 maps of small sections of Nampa, Meridian, and Boise, where flood insurance is required, just as an example of some of the areas requiring Flood Insurance, Areas are colored.
Nampa, Idaho
Meridian, ID
Boise, Idaho
So the moral of my story is, listing agent is mad at us, because of course, it is us that determined the listing was in a flood zone. Our buyers are looking for a new home, because the Flood Insurance was going to be $448 per year.
Now if you are not sure, even by the maps, 1st Choice can pull actually FEMA flood certification for all of Idaho, they run $15.00
On to mortgage rates
Have we seen the bottom for mortgage rates this year, quite possibility, but don’t we always say that, and BAM, mortgage rates drop gain?
This week, we say mortgage rates come off their 2017 lows, mainly due to the Federal Reserve and their announcement on Wednesday, which indicated that the Fed will not unwind their Bailout, which has caused the Federal Reserve holding to go into the 10’s of Trillions of Dollars.
So, over the last 9 years, the Federal Reserve has been buying Bonds, both regular bonds and Mortgage Back Security Bonds. Time to go back to school on Supply and Demand:
The more people that buy bonds, the price goes up but the yield goes down, yield is the rate, basically. So the Federal Reserve was buying BILLIONS of bonds each month, thus keeping the yield down, and thus keeping rates down.
Well on Wednesday, the Fed indicated that they are not going to buy any more bonds, AND they are also going to start selling more bonds. It is anticipated that the Federal Reserve, over the next 12 months will purchase $124B less mortgage bonds, or about 7.6% less. With more bonds available, and less people buying, the price will go down, and thus the yield will go up, meaning that mortgage rates will go up.
One of the talking heads indicated that he expects the 10 year bond, which following mortgage rates closely, will go from 2.22% to 3.00% in a 12 month period. That would correlate to a .75% increase in mortgage rates.
BUT….
We have wild cards in there, and in order of importance:
-North Korea, investors will flock to bonds, thus buying more, if there is more missile test, a nuclear test, or hate to say it, WAR.
-Natural Disasters, if more hurricanes or earthquakes hit the US, the economy may slip into a recession.
-Congress does NOT pass tax reform, stocks will sell off, bonds will be purchased.
Worse….All three…recession.
We have been in a lock mode for a while now, and unless the “rocket man” really ratchets up, we will continue to be in a lock mode.