Market Summary: November 11 – November 25
The Mammoth MLS is reporting 13 closings in the past two weeks in Mammoth Lakes ranging from a low of $175,000 to a high of $776,000. That is one (1) additional closing from the previous period. The sales data reports only one (1) REO/bank owned property closings and only one (1) short sale closing (a pre-holiday buying trend??). Four of the closings were in Snowcreek Phase 5.
At the period’s end there are 145 condominiums listed for sale, a push from the previous newsletter. The inventory of single-family homes decreased by one (1) to 46. Residential lots listed for sale decreased by one (1) to 34. There are now only six (6) residential lots listed under $200,000.
The total number of properties in “pending” (under contract) in Mammoth Lakes decreased to 83. Of the 83 properties in “pending,” 23 are “contingent short sales” and 14 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) decreased by two to 115.
Market Updates and News
Thanksgiving Weekend was by-and-large an “owner’s weekend” here in Mammoth. Despite the Mountain’s efforts to open plenty of substantial runs, it is clear that visitors don’t want to shell out dollars for marginal skiing. But for second home owners with ski passes there was great weather and very good early season skiing; a great way to start for most. And the crowd size was appropriate for what was open. The town, outside of the Village, was dead. But the bookings for Christmas to New Year’s are solid, that is just a “given” here in Mammoth.
The Town’s Bankruptcy petition was officially dismissed in Bankruptcy Court during the last period. We’ll never know how that might have gone. The Town spent a heap of money settling on a big settlement but with a longer payout period. If we have serious inflation over the next 20 years, it may end up looking genius. Meanwhile, the Town still has to come up with a final plan to pay the first installment (and pray for snow).
MMSA Rusty Gregory’s grand BID (Business Improvement District) plan doesn’t seem to be gathering much steam (at least not in my circles). I would say even if it appeared to be a brilliant plan that most of the town businesses are somewhat shy about committing to extra expenditures right now; a slower general economy, a painful drought winter, and already added state and federal taxes have them nervous enough. That will be a hard sell.
The REO component of the real estate market is changing again. The number of Notice of Defaults in Mono County jumped in the late summer and some of those are already slated for Trustee’s Sale. An increasing number of Trustee’s Sales are actually being completed (compared to late spring and summer). Many others are being canceled and immediately re-issued (with corrected paperwork?). A few new short sale laws went into effect on Nov. 1 and while most new legislation has been in favor of the consumer/property owner, there is a new one that does not allow a short sale contract to be valid if it is dated within 14 days of a Trustee’s Sale on the property.
So no more 11th hour short sale deals. Seller’s need to prepare… One of the seldom spoken about “Fiscal Cliff” issues is the expiration of the Debt Forgiveness Act of 2007. This Act is what allowed short selling owners of their primary residence to escape being 1099’d for the mortgage shortfall. That tax liability would be a killer for many short sellers. We’ll have to wait and see what DC does. Purchasing an REO or short sale takes buyer patience, everything just moves slowly. But there are still rewards.
I’ve been receiving an increasing number of inquiries off of my office website as to what constitutes a “crashpad.” Obviously, they are not long-time readers. (BTW, my real estate columns have now been running in Mammoth for the past 22 years.) The term crashpad really came about with a segment of the buyer pool that was simply looking for utility in a property. They weren’t looking for luxury, or a special view, or “rental numbers,” etc. They wanted a bed, shower/bathroom, a modest kitchen, etc. and they wanted it to be affordable. And immediately accessible. And preferably within walking distance of their favorite bar.
Crashpads also serve as large private lockers for their owner’s recreational equipment. See, these owners don’t sit around, they are constantly out in the “big playground.” Most of the properties still have their original formica counter tops. I used the term many years ago and the term stuck. And over the years there has been an increasing number buyers looking for crash pads. The MVP certainly helped drive that, and still does. The longer I live in Mammoth, the more sense it makes for even me…
More closings at Snowcreek 5, with four of the 13 sales this period in that project(s). All four sales are nice (but different) units and reflect a slight softening in prices. The good inventory that sat out there on the meadow all summer is dwindling.
Sale of a modern four-plex (with garages) as a short sale at $470,000. This is a modern real estate anomaly. How does a pure investment/income producing property qualify as a short sale?? Up until recently, just proposing this in any university real estate class would have garnered a “FAIL,” but here we are. This is a slight deviation in bedroom/bath configuration from most of the similarly constructed but makes for a perfectly good comparable. This would have sold new in 1990 for right around $300,000. These buildings from this era ARE starting to need significant capital maintenance.
Two similar (same project) smaller 2+loft / 2 bath townhomes near the Village sold right at $230,000. These could easily be considered crashpads because you’re not buying for luxury or quality construction. But the proximity to the Village have the values up.
Other Real Estate News
Mortgage lenders are soon to be wrangling with new regulations as a result of Dodd-Frank. Nobody is even talking about this part of the “Fiscal Cliff” but the ramifications for real estate portend to be negative. There is simply too much else going on worthy of discussion. The thrust is that fewer-and-fewer borrowers will qualify for the “good loans.”
Lending standards are going to tighten on Fannie Mae and Freddie Mac loans (all the while the FHA is going to come looking for a bailout). Turning the screws on qualifying for Fannie and Freddie loans will affect Mammoth financing.
But interestingly I’m starting to hear the terms “owner financing” and “wrap” being tossed about. I can foresee offers of owner financing in the Mammoth market if interest rates on CD type investments remain low; plenty of Mammoth legacy-type properties are owned free and clear.
There was an interesting little blip of new listings following the election. They don’t show in the inventory numbers because they were absorbed by other listings expiring. Some of these are really nice/special properties (albeit priced high). Mammoth is a small market and when I see these little surges of activity after certain events it always gets my curiosity up. I’m watching this one.
Thanks for reading!