Market Summary: July 28 – August 11
The Mammoth MLS is reporting 19 closings in Mammoth Lakes for the period ranging from a low of $119,000 to a high of $1,070,000. That is one(1) more closing than last period. The Mammoth real estate market is at a consistent chugging along. There were NO REO/bank owned property closings and two (2) short sale closings for the period. One of the short sale closings was a listing that had lingered on the Mammoth MLS for almost a year and had a low price and looked good in the photos. This property teased the hardcore Internet watchers for many months. The property was in-and-out of the Trustee’s Sale notices. The eventual selling price won’t make any of the neighbors happy. And even though it looked good in the photos, it is going to require some serious work.
At the period’s end there are 119 condominiums listed for sale in Mammoth Lakes, that is up only one (1) from the last period. And again, the condo market needs more inventory. But now there is a lack of quality inventory in several segments of the market that buyers typically find rather plentiful; the ~$180K price range with two sleeping area, 70’s built, good rental condo… the ~$300K price range three sleeping area townhome… and now the more modern Snowcreek Phase V 2 and 3 bedroom townhomes. There are lots of frustrated buyers out there.
August has historically been a great time to shop for condos here in Mammoth. There is normally peaking inventory and the fall/pre-winter rush hasn’t begun, etc. There are some good condo properties in the inventory, and there are plenty with serious flaws. Local agents are soliciting sellers and listings like mad. Sooner or later some of the sellers will figure out that it is a good time to sell (reason will overcome greed). What will become fascinating is how the buyers will react when the winter “sense of urgency” hits. And that begins right around the corner from now. The traditional triggers are football on TV, the kids go back to school, and the ski and snowboard magazine show-up in the mail.
Single Family Inventory
The inventory of single-family homes decreased is even at 53. The sub-$600,000 homes are sitting. The buyers are simply saying “no.” I don’t think the pre-winter rush will cause these buyers to get off the fence. Some owners/wanna-be sellers are now booting tenants and completing new paint and carpet. Others are nudging their asking prices down. Others are considering placing new tenants in the property (and possibly waiting).
Clearly, this segment of the market has bounced off the ceiling. BUT, the above $700K residential market is holding strong. Some of the 500+ day on-the-market homes have been selling. And anything new and clean and modern is looked at heavily.
Residential Lot Inventory
Single-family home lots continue to see selling action but high construction costs have got to be putting some sort of lid on what people will pay.
The total number of properties in “pending” (under contract) in Mammoth Lakes stayed even at 64. Of the 64 properties in “pending,” only 7 are “contingent short sales” and 34 are in “back-up” status. That’s a huge increase in “back-up” status. Clearly, local agents are using the back-up status in the MLS to generate new Internet based leads. Unfortunately, it causes great confusion (and disappointment) for buyers looking online. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) increased by four (4) to 97. Sales are ramping up slightly, but that is to be expected this time of year in this market.
Market Updates and News
The horrible smokey conditions that have plagued Mammoth in the past two weeks are abating, thankfully. An article in this week’s Mammoth Times explains the interesting confluence of factors that have made it so nasty; the fuels, the topography, and the weather. This fire, some 40 miles south west of Mammoth, is located in a steep forested area that burned in 1939 and was reseeded with Ponderosa pines. That dense re-growth is now what is burning (and after two drought winters it has to be pretty dry).
The high pressure weather pattern has also moved the smoke up and down the adjacent canyons during the day and been responsible for depositing the heavy smoke in the Mammoth area. This fire has burned almost 20,000 acres but hasn’t really been a threat to structures or people, except for those of us breathing the smoke, and it has been really bad at times. I have no doubt the smoke has impacted tourism. One volunteer at Bluesapalooza told me that there were many “no-shows” for pre-bought tickets and the only reasonable explanation was the smoke. The high school cross country teams are here practicing and that can’t be healthy. Many visitors likely headed north and out of the smoke.
I sat through a 2-hour short sale webinar the other day to learn about the latest-and-greatest in the short sale world. The two things that stand-out the most; there really is no need for an owner/seller to have “hardship” any more. The banks now simply consider being “underwater” as sufficient hardship. Not being able to sell without putting money in to the transaction or utilizing a short sale is now considered adequate “hardship.” Secondly, the lenders are now allowing agents to “pad” the financials so that sellers can receive relocation assistance, HOA fees in arrears can be paid, etc.
The lenders only care about the “net” figures anymore. My, how things have changed. Clearly, we are proceeding into an even more friendly short sale environment. Meanwhile, the California legislature has expanded the anti-deficiency laws under Senate Bill 426. Lenders will be prohibited from pursuing deficiencies from many foreclosures, etc. including no-cash-out refinances. A federal bill to eliminate the 1099 for forgiven debt has to be on the horizon…
Recent home sales in Mammoth have probably substantiated the reason for some “spec” building. There has been a convergence of lower lot values, the Town’s extension of waiving the DIF (Developer Impact Fees), hungry sub-contractors, etc. Higher-end home buyers have also exhibited the willingness to pay “a little extra” for a new or near-new quality home-without a lot of hassle. Long-time local builder John Hooper is jumping into the game, his latest offering is right at Eagle Express.
But he also recently purchased the Solstice II property which was originally slated to be the second phase of the Solstice condo project located on the Sierra Star golf course. Now, Hooper has managed to fill, grade and compact the property and at least six new single-family homesites are staked out. And he did receive a zoning change from the Town. This will be a wonderful setting; right on the golf course, very close to the clubhouse, and actually walking distance to the Wood site (events) and even the Village.
I had a recent inquiry about a potential lot listing. I went and checked it out and discovered a piece of property that I NEVER would have let a buyer purchase. I still may end up with the listing but I will have to find somebody else to represent the buyer. I curiously went back to see who represented this buyer in late 2001. And of course the agent no longer lives in town, and he was one of the who “sold anything to anybody.” Just another reminder to buyers who choose to work with agents who have poor cognitive skills.
And a recent news article out of France was covering the economic disaster occurring in their fourth largest industry–the hotel and restaurant industry. Restaurant traffic was reported to be down 13% with a 10% loss in jobs. Ironically, during a rare dinner out for me here in Mammoth I experienced a dining room half full of French tourists and the other half were English
Three more vacant residential lot sales during the period, all in quality Snowcreek neighborhoods and all in the $300K+ range. Two of these were continued purchases from a private “investor.”
Other than that it is really hard to find too much noteworthy. The aforementioned long-tenured homes on the market sold for $263 and $287 per a square foot. These were older but quality homes in good neighborhoods. But they had been on the MLS for years. They basically came down to the right pricing. The newer home (2005) that closed sold for $374 per square foot… about right. All told, five (5) homes over $575,000 sold during the period.
A 2 bedroom + loft / 3 bath in Snowcreek V closed for $440K, there’s a sale that shows an upward trend. A 2 bedroom / 2 bath in the same project closed for $240,000, there’s a price that shows a downward trend.
Other Real Estate News
A recent Blomberg article on million dollar home sales could have been written about the micro-market of Mammoth Lakes. Quoted from the article is Wharton professor Susan Wachter, “The $1-million-and up end of the market usually trails cycles of the broader market because real estate purchase by wealthier buyers “tend to be discretionary spending” that can wait until economic conditions are right… those homeowners usually can hang onto properties during tough times…these usually are people who can weather any storm.”
The article also states, “The upper tier of real estate that’s now rising the fastest also fell the hardest during the financial meltdown.”
“Homes priced more than $1 million lost about 46% of their value during the housing crash…” and quoted from DataQuick’s senior analyst Andrew LePage, “The rich are feeling better about their prospects and starting to rediscover real estate as a place to park their money… the stock market has created a tremendous amount of wealth, and that’s being put into homes.”
…and from Paul’s observations around town, the Help Wanted ads in The Sheet “Part-time Housekeeper, $11/hr. to start, references required. Please drop off a resume at…” Wow, Mammoth is getting quite uppity, even part-time housekeepers need to keep their resumes fresh and updated. I wonder how many real estate agents even have one?
Thanks for reading!