Market Summary: May 26 – June 16
I consider it great to go on vacation and get away from work and regular life for a couple of weeks. But it might be even better to come home to Mammoth, especially as summer kicks off.
This report is for the past three weeks as opposed to most reports covering the previous two weeks. The Mammoth MLS is reporting 27 closings in Mammoth Lakes for the period ranging from a low of $84,000 to a high of $1,500,000. The sales data reports two (2) REO/bank owned property closings and seven (7) short sale closings. The short sale closings ranged from 2 to 6 months for bank approvals.
At the period’s end there are 103 condominiums listed for sale in Mammoth Lakes. That is seven (7) LESS than three weeks go. New condo listings are coming to the inventory but there is no net gain. That is very un-typical for this market for this time of year.
Single Family Inventory
The inventory of single-family homes increased slightly to 50. There are now eight (8) single-family homes listed under $500,000 including three “A” frame homes and one small cabin.
Residential Lot Inventory
Residential lots listed for sale are down dramatically to 35. There are two multiple-lot buyers perusing the market; one a local spec builder with brand new home offerings soon to come to the market and another wealthy investor piling high-end lots into a long-term hold portfolio.
The total number of properties in “pending” (under contract) in Mammoth Lakes increased by six (6) to 69. Of the 69 properties in “pending,” 15 are “contingent short sales” and 33 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) increased to 100. This is relatively strong activity for this time of year in this marketplace. If there was more (quality) inventory the sales activity might be higher. The market has been chugging along at a consistent pace for the past few months.
Market Updates and News
The “very interesting summer” mode began while I was out on the water (and it isn’t even summer yet). Mammoth Mtn. CEO Rusty Gregory continues to surprise the community; this time with another near-confessional-type announcement during the public comments phase of a recent town council meeting (June 5). Gregory announced that he will no longer be the CEO/”running the company” in the very near future. The ambiguity of his statements has everybody guessing.
He intends to clarify those plans this next week at a company-wide meeting. The most recent media interviews report that the company will be “completely reorganized” with a new management team. But now it appears he will stay on as CEO, or not. More confusion and mis-direction. The public seems to care less and less. Mist-trust is a nice thing to cultivate. As long as the new management team keeps the lifts running.
Meanwhile, Gregory’s “big idea” of the proposed tourism-based business improvement district (TBID) is coming under greater attack (for awhile it seemed like it would be rubber stamped). In a nutshell, this is a proposed tax on recreation and retail and restaurant/bar activities that will be paid mostly by visitors. Some small businesses who won’t collect the tax will just be dinged a flat fee. The money will go to (more) tourism marketing and airline subsidy. If it passes, we will all pay a small increment more for everything.
It all sounds too much like another attempt at a redevelopment agency (another lawsuit the Town lost). In all of the discussion nobody seems to be stating that this proposed taxation is really just backfilling the monies lost in the Hot Creek/Airport settlement. The Town (an MMSA) has spent millions on marketing (and marketing directors) in the past 25 years. Does anybody really think spending more will solve anything? I can tell you first hand, marketing is a tricky game these days.
The Mammoth foreclosure pipeline will become almost completely empty this summer. Our REO assignments are down to less than a handful. Personally, I will enjoy the respite, and the regular-old real estate business keeps me busy enough. But the real question is “what’s next?” There are still plenty of underwater properties and distressed owners in Mammoth. There are plenty that haven’t made mortgage payments in years and/or are in some protracted loan modification discussions with their lender(s). Despite what some local Realtors are saying, values aren’t screaming up, so the market is not going to solve this situation.
There were media reports this past week that banks were increasing the number of actions against defaulted owners. Will owners attempt to negotiate deed-in-lieu of foreclosures? Or will they squat and/or gain maximum economic benefit from the properties while the banks continue to pretend that their balance sheets are sound? What will be the next government intervention? (I’m really surprised we haven’t seen a proposed elimination of the debt forgiveness tax/1099 situation, but then again the government needs the tax revenue. Something along those lines could spur a large volume of short sales.) We’ll just have to wait and see. It’s a crazy situation, but they have successfully put a bottom into the real estate market here in Mammoth. But many owners remain in a state of limbo.
And will interest rates continue to nudge upward like they have the past couple of weeks?? And what affect will that have on this market? We see plenty of cash buyers. Some of those buyers ultimately re-finance. Some buy with cash because they don’t make money on their money in the bank. And the rates are still ridiculously low. But some observers believe higher rates will cause values to slip. More wait and see. Or maybe no effect at all in this limited supply resort market.
And since I’ve been back I now see fiber optic lines being laid in town around the schools and library. This is exciting!
The sale of Nordica Condos #19 for $84,000. This REO Studio + loft / 1 bath condo originally had almost a dozen offers including several cash offers. But one-by-one many of the buyers moved on. Ultimately, the asset manager decided to go with the buyers who represented they were going to use this as their primary residence as opposed to an investor (and it turned out they were investors anyway).
If the REO market comes back there may be another new set of rules, but in this last round sometimes persistence and luck were the keys to getting the transaction.
Three 1 bedroom / 1 bath units in The Summit Phase II closed during the period; $144,750, $145,000 and $150,000. Due to potential litigation at the project the deals were all cash (no financing available). Interesting how tight the price range is.
Another oversized Studio at the Westin closes for $180,000. Another “big view” 3 + loft at MeadowRidge closes for $600,000. Three more home closings in the ~$600K range (this has been a popular segment of the market). A junky little “A” frame sold for $250,000. A home closes at $1.5M and it isn’t in a premier subdivision.
A highly upgraded 2 bedroom / 2 bath at Juniper Springs Lodge closed for $420,000. A perfectly located and slopeside 2 bedroom / 2 bath at The Bridges closed for $450,000. A nicely upgraded 2 bedroom / 2 bath at Sierra Megeve (right at Canyon Lodge) closed at $330,000. (Talk about no clear pricing direction in the market.)
Other Real Estate News
While the condo inventory is extremely low in Mammoth, there are some visible trends going on in the condo arena… Many of Mammoth’s condo projects are hustling to get major capital improvement projects completed before the big summer crowds hit (4th of July). More than one have their asphalt parking areas/lots completely removed and new water lines being installed. Others are working to complete siding replacement, roofing or painting projects. Quite frankly, Mammoth’s condo projects in the aggregate have never looked better. The snow removal savings of the past two drought winters have helped.
Meanwhile, fewer condo buyers appear to be balking at the (perceived) high common area fees. Maybe the lower selling prices are considered “a trade-off,” or maybe buyers are just more educated about the true cost (dollars and effort) of real estate ownership in this environment, whether it be a condo or a single-family home.
I’ve seen many major interior remodel projects started and soon the fireplace remodeling (because of the new ordinance) will become commonplace. Some of the remodeling is driven by owners changing their rental scenarios; some are coming off rental all together for more personal enjoyment and are some moving more intensely into self-renting mode and trying to attract the best clientele and rental revenue.
Those becoming the more pro-active nightly landlords are utilizing vacation rental consultants and remodeling and upgrading their units with that goal in mind. At the same time they are working to devise a better online/website presence.
More and more on-site (the old mom-and-pop) rental programs are falling by the wayside. The cost of competing with the major entities, or the owners themselves, has become too high (including overspending on marketing).
Some of the older and smaller projects with nice units are becoming almost devoid of nightly rentals except during specific holidays, making them quiet and peaceful for their owners. This is becoming a valuable new intangible amenity.
Thanks for reading!