Market Summary: October 14 – October 28
The Mammoth MLS is reporting 17 closings in the past two weeks in Mammoth Lakes ranging from a low of $156,000 to a high of $940,000. The sales data reports three (3) REO/bank owned property closings and only one (1) short sale closing. For the period, 12 of the closings were under $275,000.
At the period’s end there are 153 condominiums listed for sale, a decrease of eight (8) over the previous newsletter. The inventory of single-family homes decreased by four (4) to 53. Residential lots listed for sale decreased by one (1) to 39.
The total number of properties in “pending” (under contract) in Mammoth Lakes increased to 94. Of the 94 properties in “pending,” 23 are “contingent short sales” and 19 are in “back-up” status, or actively looking for back-up offers (as I’ve said before, these listing agents aren’t real confident with the strength or commitment of the buyers in the “back-up” transactions). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) increased by ten to 122.
Market Updates and News
Mammoth’s real estate market experienced a small seasonal increase the past two weeks. There is still no (usual) mad rush by buyers to secure their new Mammoth property before the winter season. The lack of quality inventory in some segments of the market can be blamed. The general economy can also be blamed. The election be blamed (at least for now). The “fiscal cliff” and the many uncertainties that surround those issues can be blamed. And the ridiculously low interest rates cannot be blamed.
As far as the inventory goes, the low end of the market is dismal. Quality low-end condo inventory is non-existent. Quality homes under the $500K price point are scarce. There has been a small increase in REO properties from the lull of the summer with some decent bank-owned buys in the Westin and Village. The best buys in the market right now appear to be in Snowcreek Phase 5, especially in the 3 bedroom / 3 bath floorplan. The current batch of 2 bedroom / 2 bath condo hotel sellers seem reluctant to drop below the $400K threshold and the potential buyers feel that is too much unless the property has some outstanding features. Recent purchasers of single-family homes have been making more astute purchases in the $700K range than in the $900K range.
An increasing number of “portfolio” lenders are beginning to offer financing in the condo hotel arena; expect 30-40% down and 7/1 ARMs or the like. As these rates become more competitive (and they will), the potential buyer pool for these properties will increase. But these new buyers will most certainly be looking for ROI (return on investment). And unless these buyers are ready to become “proactive” and competitive in the rental process (utilizing online resources to book their property in less-demand periods), they may not find it worthwhile.
And if hardcore anticipated ROI isn’t the target for potential buyers, most want to know that “some” or significant rental potential can help offset future expenses or protect against economic downsides. But all-in-all having some reasonable financing in the condo hotel segment of the market could bring the values out of their depression state.
Meanwhile, the small faction of single-family homeowners (SFRs) who are using the Town’s financial Restructuring efforts to try to affect change in transient (nightly) rental ordinance in those SFR neighborhoods is growing. But their efforts are becoming increasingly self-serving in appearance. Recent arguments before the Town Council made projections of millions of dollars per year in increased TOT (bed tax). (If it were only that easy.) There was even discussion about the SFR business license (for transient rentals) having some exorbitant $$ figure to offset impacts.
The Town’s effort and energy into illegal SFR rentals and overall TOT crackdown that began some 12 months ago is now beginning to have some rather interesting ramifications. It looks like many SFRs were purchased in the last ten years with rental revenue expectations. It also looks like the illegal rentals were a larger program than many believed…
The MLLA settlement has brought Mammoth to another interesting crossroads. The opposition (to changing the SFR ordinance) remains strong and, quite frankly, is made up of many prominent local citizens. But something tells me this fight isn’t over, and as I said in my recent post on my blogsite; Can anybody make a truly compelling argument for overturning the ordinance?
And as I said in that post, my best guess is that the Town’s financial restructuring will likely result in some sort of future combination of parcel tax and recreation (namely lift ticket) tax. A combination of a $75 per year parcel tax and a 2% recreation tax would cover the new debt service. But others are suggesting a one-time parcel tax of approx. $2,000 to just wipe the debt out now…
The closing of 20 Valley Vista for $156,000. This vacant lot and a few others like it have been on the market for a few years now. The prices have drifted down. The values have declined as the cost of new construction continues to rise (there’s no deflation in construction costs). But existing homes have also moved solidly downward and many homes are selling below or significantly below replacement cost. This summer was a great time to pick up an excellent residential building site–that is if the new owner can afford to build on it.
The sale of a 1 bedroom / 1 bath in Grand Sierra Lodge for $252, 500. This REO property was missing the kitchen appliances and customary furniture package (classic foreclosure “stripping”). This unit had a very nice location in the project on the main access level and overlooking the pool/spa area. The property was originally listed below $200K, so obviously the price was bid-up–somebody really wanted it!
During the period; a good number of low-end mediocre condo sales that are pretty typical of Mammoth over the decades; some good buys, some not-so-good buys, and sometimes low-end second home buyers just aren’t very discriminating, but they should be. And a couple of larger, 80’s built homes in quality neighborhoods with large garages selling in the $175-225 per square foot range. This continues to be a good sweet-spot in the market; these homes need modernizing but normally they were well built, have stood the test of time in this environment, have good floor plans, and are in “resort” locations.
Other Real Estate News
The recent snowfall put a nice layer of frozen coverage on the ski runs so the snowmaking crews can add to it before the opening of the Mountain in a week-and-a-half. It’s still going to be thin. The long range forecast has snow coming just before Thanksgiving. That would be good. Squaw Valley got bragging rights by opening before Mammoth but that opening-early hoopla is a thing of the Dave McCoy-era past.
It really makes no business sense to spend the money to cater to a few local ski bums. The second Thursday of November is early enough for the accountants. The early openings were fun while they lasted but in this day and age we need the Ski Area to be run like a business, or else it will cease to exist. The June Mountain closing should bring that home…
The really huge benefit of the recent snowfall was that it almost entirely eliminated any local forest fire danger. Anybody that had been out in the forested areas as of late can tell you how dry things were and how little water was left in the lakes and creeks… a quiet sigh of relief.
The monstrous new gateway sign is taking shape at the entry to Mammoth on both sides of Hwy. 203 at the new court house location. The physical structures are up and the finish rock work has begun. They should be completed by the time the snow flies next. They will make an impressive entry statement to town especially with fresh snow on-and-around them. The new signs (and their cost) are sure to receive negative comments based on the Town’s current economic woes, but the visitors to our town are sure to be impressed for many years after all of this is forgotten.
Thanks for reading!