Market Summary: March 3 – March 17
The Mammoth MLS is reporting 13 closings (2 more than the last period) in Mammoth Lakes for the period ranging from a low of $82,000 to a high of $1,110,500. The sales data reports only two (2) REO/bank owned property closing and NO short sale closings. Amazing! Five (5) of the closings were OVER the $400K mark and two (2) at or over $1.1M. A slow but steady flow of transactions with an interesting absence of distressed sales.
At the period’s end there are 113 condominiums listed for sale, an decrease of eight (8) from the previous newsletter. The inventory of single-family homes is up two (2) to 41 with three homes listed under $500K. One is a back-on-the-market REO. There are only 18 home listed under $1M. Residential lots listed for sale are up to 36.
The total number of properties in “pending” (under contract) in Mammoth Lakes increased by 14 to 87. Of the 87 properties in “pending,” 14 are “contingent short sales” and 29 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) increased by 13 to 113. So an increase in sales activity, and more agents less confident about the strength of the transactions.
Loan officers are quoting longer processing times due to backlogs and some loans are being held-up due to borrowers needing to file their tax returns. Based on overall market inquiries from buyers, my hunch is there would be more sales if there was more inventory. We’ll see if these buyers are around come August when the inventory is seasonally higher.
Market Updates and News
Ridiculously warm weather is beginning to impact the ski season and subsequently the local economics and maybe even the Mammoth real estate market. I was out showing property this past week in shirt sleeves and one thing for sure is that potential buyers aren’t seeing properties with the typical March snow pack at the property. With the significant volume of the season’s snow coming in December and plenty of warm weather since, most of the in-town snow has melted. The skiing remains very good but more spring-like. The early high-altitude snow is Mammoth’s salvation. Many other North American ski resorts aren’t so lucky.
While short sales don’t appear to be a significant part of the Mammoth real estate market in this reporting, I certainly expect them to be in the future months and years. The banks and servicing entities are trying to adjust to the new regulation’s under California’s “Homeowner Bill of Rights” law (Jan.1, 2013). Under this new legislation (and adequate propping-up of the market), banks will be even more pro-active with short sales. All the major players from Fannie Mae and Freddie Mac to the major banks have recently put new systems and processes in place to further facilitate and expedite short sales. Now the distressed property owners have to play along. I expect a whole new giant wave of short sale opportunities (and craziness).
For the Mammoth market, that could mean a new round of underwater-but-affluent second homeowners who are going to stop making payments and take a stab at a short sale to relieve them of their debt. Those who can’t compromise their credit certainly won’t, but there are plenty who will. Many will be “coached” (not by me) to play the short sale game for as long as possible and maybe until the note holder ultimately forecloses. That could be years, and in the meantime family and friends (and renters) should enjoy their vacation home to the hilt. (I don’t condone all of this but real estate in 2013 is one big Serenity Prayer issue.)
So for underwater Mammoth property owners looking for debt relief there are potential strategies based on personal circumstances. High income and good credit don’t seem to be a problem to qualify for a short sale in this era. The “hardship” qualifications required these days appear to be anything more disastrous than a hangnail. Certainly they can come up with some drama.
The biggest challenge is overcoming the “moral dilemma,” but once resigned that it is “okay” in today’s world, the game is on. Some may actually become reasonable short sellers. HOA common area fees are typically personal obligations and the bank will want the property taxes current at the close of a short sale. So relieving oneself of those liabilities can be sufficiently motivating. Others will stretch the process out until the end and even have a good chance for a large “relocation assistance” (cash-for-keys) check after the foreclosure (probably enough for a nice Hawaiian vacation).
For buyers there will be opportunities; to score a good property at a good price, or to be jerked around for months with nothing but frustration to show. But as I have said before; tying up a short sale is essentially a “free option” so outside of the emotional toll there is very little to lose. If you like playing poker…
Those buyers looking to finance the purchase of a condo hotel unit or otherwise difficult-to-finance condo property in Mammoth have more and more options today and most of them are quite viable. Plan on 30% down and variable rate loans fixed for 3-5-7 years but reasonable qualifying standards (at least relative to today’s environment). Projects with outstanding litigation are still a problem. We even have some financing for residential lots. Contact me for more info.
Meanwhile, the local Wells Fargo loan office reports we are seeing more difficulty with previously approved condo projects. These loan officers have worked hard for many “project approvals” in town over the past few years but now it appears that Fannie Mae is back scrutinizing the “front desk”/rental operations. For those projects with active front desk/hotel-like rental operations it is back to a case-by-case scenario. Chasing “rental income” becomes a bigger scourge in this era, but most buyers like to know they can “protect the backside” of their condo investment.
Two homes at $1,100,000, both in high-end subdivisions, both with great views, both in great shape, and both sold unfurnished. These are really excellent buys for people who can afford them. Just a few years ago these types of homes were selling for twice this price. There is a lingering inventory of luxury homes in better and best neighborhoods but the prices have to come down to this type of “value buy” to attract buyers. The others are just kidding themselves.
The REO sale 70 Aspen Place at $338,000. This small 2 bedroom plus loft / 2 bath home is located on a choice Slopes cul-de-sac lot. The home needs some upgrading but the location certainly warrants it. This was a multiple offer and overbid scenario. This could have sold to 20-30 buyers in the current market. There just isn’t enough supply for the demand in this segment of the market.
The sale of a Grand Sierra Lodge 2/2 for $405,000. Nothing really special about this location but Village 2 bedroom units are popular right now if the price is in this range. Grand Sierra remains a favorite with Village buyers.
The sale of TimberRidge #21 a 2/2 for $410,000. TR remains a bit of a quirky project; buyers either love it or hate it. This unit has INCREDIBLE views with remodeled windows to show it off and a 2-car garage. Big view and private garage = quick sale!
Another good Snowcreek sale on the fairway, a couple of older 1 bedroom condo sales (cheap) and the sale of a small restaurant…
Other Real Estate News
The inclusion of furniture and personal property in many real estate transactions has been commonplace in my nearly three decades of Mammoth brokerage. It often becomes the most contentious part of a transaction, and most times at the end of the escrow when everything else has been settled. Many times I have felt like screaming “I am not a furniture broker!” Recently there was a typical problem; buyer of a million dollar home ranting and raving (I mean days-worth) over some crappy shelves in the garage. This happens so often it almost makes me cry.
Buyers get so upset over the exclusion of furniture pieces that will ultimately end up in the dumpster or the thrift store. There is an old saying in Mammoth real estate that “the biggest problems arise over furniture.”
Lately, I have experienced high-end buyers not wanting ALL the furnishings and then the seller has to come and get it and figure out what to do with it. Mammoth does have two thriving thrift stores; the long-time Cast-Off run by the Women’s Hospital Auxiliary and the new one run by Eastern Sierra Disabled Sports. “One man gathers what another man spills…”
As a postscript to the Mammoth distressed property lunacy; this week’s Mammoth Times had a nice “goodbye” to some Mammoth locals who were moving back to San Diego. Hidden in the rear of the paper was one of the same persons noticed in an upcoming Trustee’s Sale. I wonder if he is smart enough to hang out long enough to negotiate a large cash-for-keys check. Or maybe he can’t wait to move back in with his parents. And I wonder how long he has squatted without making a payment. My bet would be 3 to 4 years. Hopefully, he hasn’t stiffed the HOA…
Thanks for reading!