Mammoth Real Estate Sales Report July 28, 2013

Market Summary: July 14 – July 28

The Mammoth MLS is reporting 18 closings in Mammoth Lakes for the period ranging from a low of $128,000 to a high of $2,771,000. Unbelievably, the sales data reports NO REO/bank owned property closings and NO short sale closings for the period. My educated guess is that hasn’t happened during any two week period for almost the past six years. Closings remain steady despite the lack of quality inventory.

Condominium Inventory

At the period’s end there are 118 condominiums listed for sale in Mammoth Lakes, that is up four (4) from the last period. Again, the condo market needs more inventory. Local agents could probably sell a dozen good units in the ~$180K price range and the ~$300K price range. I guess I’ll just have to go fishing.

Single Family Inventory

The inventory of single-family homes decreased by two (2) to 53. There are still eight (8) single-family homes listed under $500,000 including four “A” frame or gambrel-style homes. There now appears to be a stand-off between buyers and sellers in this segment of the market. The buyers are lacking motivation at these overzealous prices. The local agents who promoted these higher prices will now have to work for price reductions.

Meanwhile, Mammoth property owners report being bombarded with an increasing amount of mail solicitations from local agents; “Its a great time to list”… but only if the price is right… or close… or you find a sucker.

Residential Lot Inventory

Residential lot inventory has settled in at 38 right now. There have been increased sales and activity the past few months, and some new lots to the inventory including some that have been on the market in recent years and did not sell. The first of the “spec” lots was scraped this week and a foundation will be formed-up soon. Seeing active spec building begin in Mammoth is an interesting sign…

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes decreased by four (4) to 64. Of the 64 properties in “pending,” 10 are “contingent short sales” and 16 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) decreased by one (1) to 93. New sales are down a bit, not because of lack of demand, but because of supply, or the lack of quality supply.

Market Updates and News

The Dog Days of summer have turned into the Strange Days of summer here in Mammoth. Rather than the typical beautiful blue sky filled days, we’ve had a weird mix of smoke from a nearby forest fire, clouds, rain and floods, lightning and thunder, and eery red sunsets… Mammoth Lakes braces for Bluesapalooza this next week and weekend.

Last year’s week was the most tourist packed week I can recall in 32 years. Bigger than the busiest Christmas/New Year’s. We’ll see what this week brings. Probably some frustrated real estate buyers with it all. But there will be plenty of beer to drink. The Palooza event site has expanded by 30% to add more craft brewers (80) and attendees.

The Mammoth Lakes Town Council passed the TBID this last week and the tax will go into affect on Sept. 1. After all of the noise, it will be interesting to see if anybody even notices or cares. I had to go to Reno last week to pick-up a sick computer and the bed tax there is 16% plus a $12 “resort fee.” Did it make me think twice?? So now the Council has put in place a tax on lift tickets and restaurant and retail to supplant (and then some) the monies owed for the Hot Creek settlement… The town staff has been whittled down to bare bones. But now some hiring will begin. I guess we’ll have to wait a couple of years to see how all of this works out. Memories are short.

The real estate questions of the day; “Are prices going up?”  I get that everywhere I go. The accurate answer is YES and NO. One observation; the young agents and the “cheerleaders” are selling property in this town. The young agents are convinced the market will go to the moon again. The cheerleaders don’t have any contrarian thoughts. But so be it. Caveat emptor… Once again I can point to conflicting sales, some are up and some are down.

There is no clear trend in the Mammoth market. But again, the buyers in the sub-$600K homes are resisting the new pricing of most offerings. They just think ~ $500K should purchase them more home, and in a better location. Lower and mid-range condo buyers appear to be taking the same attitude; for $180K they want a second shower, or a “resort” location.

Meanwhile, there are reports that some So Cal markets are beginning to cool off, that inventory is building, etc. If that happens it will affect the psychology of the local market. The macro data is also starting to show that many of the loan modifications completed in the last five years are re-defaulting. That comes as no surprise to me. I can assure you that is happening in Mammoth. Even with some rise in values, the number of properties that are underwater (over encumbered) is still enormous. Those owners can’t upsize or downsize. But they can squat…

In Mammoth, we continue to do see existing owners moving up. I’ve been a part of some of these transactions. And of course each seller wants maximum price and each buyer wants a screaming deal. Of course, it doesn’t always happen that way. The players should be looking for the best end-result, not the “saving” money. And some of these move-up participants are “buying” there way out of their existing property… certainly, A Tale of Two Cities.

Apparently the first of the construction defect lawsuits/litigation against Intrawest has been settled. This has taken several years. The local HOA will apparently receive a large settlement. From my knowledge, the success of this complaint is founded on, 1.) the damages are real, 2.) the quality of the forensics and the building of the “case,” and 3.) being first in line against the developer’s insurance carrier. Now the HOA can move to make the necessary improvements to the property. We’ll see how the other HOA fair.

Noteworthy Sales

The sale of a beat-up 1 bedroom + loft / 1.5 bath condo at Sierra Park Villas for $128,000. This was originally listed at $109,000, so it was bid-up. Now, we looked at this unit pretty close. It needed a complete remodel. There was no way to do this inexpensively. All the windows were single-pane. It needs a second shower, especially if the new owner wants rentals (or personal enjoyment). I said $50K minimum. But it is one of those things that once you get started, one thing leads to another. I wouldn’t have paid the $109K. Somebody got excited…

The sale of Snowcreek #1003 for $492,500. I showed this 3 bedroom / 3 bath townhome in Snowcreek 5 so many times!! This was one of the last units built in SC5 (hence the #1003). The construction quality was at a peak, especially the finish work. The 3/3 is a nice floorplan with lost of windows. This unit had decks on both front and back. And it was nicely furnished. This unit was on the market for over a year and last summer it was competing against other 3/3 units including some that backed-up the Forest Service open space. Now there are NO 3/3 units available in SC5.

A $2.8M residential sale and NOT in The Buffs, Juniper Ridge or Greyhawk…

Two Snowflower units sold (they are all the same floorplan); one for $328K and one for $330K. Pretty good indication of value.

One of the full ownership homes in Tallus sold for $2.3M. Now if I had that kind of money for a second home would I buy into a fractional project as a whole owner?? Or do you spend that kind of money for a residential rental you can also use? Or was this a corporate purchase? Or was this just the old developer game of buy it from yourself to create a comparable sale? Hmmm…

Other Real Estate News

Altis lots “officially” came to the market this week. These are on the ski run above the Bridges condos and next to Greyhawk. Looking for a true ski-in ski-out location? Priced from $650K to $1.8M. There are only a handful. Hurry, they won’t last!!

An increasingly common question, “Will we see any new condo hotel units built in the near future?” The answer is maybe. Values in the Village and at the Westin Monache are a bright spot in the market. This may be a simple case of mean reversion. Most of these properties were developed and sold (and resold) at the peak of the market. The following REOs and short sales decimated values. Now values are rising. And according to the “front desks” the rental revenues streams are increasing too (and look fairly impressive).

And there are more financing alternatives (although we may never see conforming loans again). And many of the large Village peripheral parcels have been purchased out of receivership by institutions at very low cost. So with some appreciation, increasing revenues , more overall demand, and lower land costs… we may see a Ritz someday after all.

Meanwhile, local contractors report that they are producing bid proposals for the mixed-use project on Viewpoint Road.This project includes condo hotel units. This property owner/developer has already torn down several buildings/properties and established (and drilled) the geothermal resources underneath the property. Construction, and tapping into the local geothermal, would be a big boost locally.

Thanks for reading!

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