Market Summary: September 22 – October 6
The Mammoth MLS is reporting 25 closings in Mammoth Lakes for the period ranging from a low of $49,000 to a high of $1,800,000. That is six (6) more closings than last period. This is more like the activity that would be expected for this time of year; a good mix of condos and homes through the whole spectrum including three (3) homes at $1.6M or more. During the period there was one (1) REO/bank owned property closing and only one (1) short sale closing for the period.
The distressed property market remains a BIG unknown; there are some new foreclosures peeking through, some deed-in-lieu’s happening, more protracted loan modification negotiations, continued squatting, and plenty of other games. And online auctions will be more common for the disposition of bank owned properties. Buyers who found the REO sales process frustrating in the past will find the auction process to be full torture.
At the period’s end there are 104 condominiums listed for sale in Mammoth Lakes, that is down another seven (7) from the last period. The least expensive condo for sale in Mammoth is now $150,000. There are only 10 condos listed for sale under $200,000. And three of those have been on the market 750 days or longer (can you say “un-motivated sellers”). There are only two (2) condos under $250,000 that have both 2 sleeping areas and 2 baths/showers.
Single Family Inventory
The inventory of single-family homes is down one (1) to 49. And there is more re-hash. There are homes listed under $500,000 but they are all in sub-standard /neighborhoods subdivisions. There are nine (9) homes listed between $500K and $600K, and they are all compromised. And some have been on the market a long time. There were residential sales during the period in the ~$500K price range, and all were compromised, some seriously. But buyers bought them. There are still some attractive properties in the upper-end of the residential market, but not many.
The total number of properties in “pending” (under contract) in Mammoth Lakes is at 53 for the end of the period. That is down down 19. Closings were good during the period, but clearly new sales did not keep up. Again, very uncharacteristic sales activity for this time of year. But the lack of good inventory in the market is the likely cause–there are plenty of buyers looking and watching, and waiting. Of the 53 properties in “pending,” eight (8) are “contingent short sales” and 18 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) decreased by 17 to 74. The local agents had better saved some of their commission checks for rainy days.
Market Updates and News
The Fall colors are making a spotty appearance this year; some areas are turning quite nicely and others not at all. And some of the early turners are dropping their leaves already. Can’t have it perfect every year… Mammoth expects some precipitation this week, maybe enough to freeze the ground at the Ski Resort so snow making can begin in earnest… This is Mammoth’s most quiet season and the local residents love it. We hate to see summer go but the anticipation of winter brings a certain excitement (can’t wait to shovel snow)…
Last week’s government shut down forced Eastern Sierra campers and Yosemite visitors into Mammoth proper and most were pleasantly surprised at the accommodations and the quality of local hiking and site seeing. Maybe even more marketing is the right solution. I showed condos to buyers the past few days and was surprised myself that some were booked.
The Town is now in hiring mode now. They couldn’t go much lower. An “interim” Town Manager has been hired with the charge of finding a new Town manager. And most believe he is a shoe-in for the job, if he wants it, and he appears interested. He brings plenty of experience and a good track record, and a small town, resort, rural temperament. All “good” as they say. The Town also hired a new police officer. He’s a veteran cop and in his early 50’s, and again, appears to have the right temperament. And he is bilingual. The Town appears to be headed back in the right direction with these experienced people.
Meanwhile, Mono County has finally hired a new Tax Assessor, Bob Musil. Bob worked in the Assessor’s office for many years as an appraiser. Again. more of the right temperament. This will be the fourth Assessor I have experienced as a member of the Tax Appeal Board, and each very different. We’ll see how he feels about adjusting assessments that are too high!
The Town’s new fireplace ordinance is a real pain for buyers, sellers, and agents. But some people are shifting gears. Many new owners are considering pellet stoves for their new retrofit. In the past, pellet stoves were pretty taboo in units planned for nightly rental. But that is changing. I have recently been in some nicely upgraded (older) condos with pellet stoves that are aggressively renting.
In speaking with some of the reservation managers, it is certainly a new trend and they are reacting; they are teaching their maids how to clean the stoves, teaching the maintenance people how to maintain the stoves, and warning the renters “don’t touch, don’t put anything into it, just use the thermostat for up and down.” As everybody becomes more familiar with these appliances, it is likely to be a significant trend.
The installation of a pellet stove reduces the overall cost of meeting the new ordinance’s requirements because the heat is blown into the room instead of settling in the rear of the fire box. The venting requirements are also far less. This is where a lot of the new expense is. The pellet stoves themselves can be thermostatically controlled and self ignite. The renter can arrive to a warm unit with a fire burning and can control the heat with the thermostat. Depending on the length of stay, the renter may have to load another bag of pellets into the hopper, which is quite easy.
The past problems have derived from renters trying to put other items into the stove; wood, paper, etc. It just doesn’t work. But quality renters will likely come to really like the idea and it may become a “requested” item… Another solution more and more owners are considering is to remove the entire fireplace and line the new enclosure with drywall and stone/tile and go to a free standing wood stove. These appliances typically produce more heat because the firebox and flue are exposed to the room. However, this modification doesn’t allow for the giant flat panel TV to be mounted on the fireplace above the mantel.
National pending home sales were recently reported as down for the month of August. I suspect September will follow the trend. But sales were very strong in spring and early summer. It was a fairly active period for Mammoth considering that can be a slower time of year for us. Sales would be stronger now if we had more quality inventory. Many sellers simply believe prices will be higher next year. Most buyers are skeptical. But some buyers are going “all-in” and completing sales that show an upward trend. Other properties are being reduced to attract buyers. So the up/down trend continues in the local market. Only time will tell if some of the recent buyers will be remorseful, or if the future buyers will be.
With three homes (actually four) selling at $1.6M or more, those are worth discussion. The first (at $1,625,000) was a “spec” home built by John Hooper on the bluff by Eagle Base and was put to contract many months ago. Probably a very good buy at this point; likely would bring more in today’s market. The second (at $1,600,000) is a smaller but lovely Craftsman style home in Old Mammoth on the creek and a large lot. Not for everybody but a great piece of real estate. This had been listed for some time, but price reductions finally found the buyer.
The third (at $1,800,000) is a very large and modern home at the top of Davison and a short walk to Canyon Lodge. This has to be a corporate-type home or multiple families, etc.. Proximity and size had to be attraction. The fourth I won’t count; a full home at Tallus (the fractional project) sold for $2,500,000. This is the second transaction of this nature and it was an inside deal. Some sort of owner/developer move; raising cash or trying to set an appraisal value or…?? Who knows?
Like I said previously, the four residential sales between $450K and $530K were all pretty compromised in one way or another. These really shows the almost-desperation in this part of the market. Only time will tell if these make sense at these prices. And someone paid almost $900K for a home in The Trails…
Two 3/3 townhomes at Snowcreek 5 closed in the low $500K range. These 1-car garage end units have lots of light. These are some of the best “values” in Mammoth; the project is beautiful, nice views and sun, reasonable HOA fees, good propane rates, and the units are typically in good shape.
A buyer paid $410K for an old fourplex in Sierra Valley. Some “investors” have lost their minds??
And 12 condos representing the whole spectrum closed between $120K and $335K. Just good ‘old Mammoth condo activity, the kind you would expect for this time of year as we stare winter in the face.
Other Real Estate News
RealtyTrac is the preeminent foreclosure tracking service in the nation (and they are based in SoCal). They released some really alarming data this past week, including this; 61% of the bank owned-homes in Los Angeles are still occupied by their previous owners… No wonder there is so little supply. And this is a trend all across the country. Some areas are better and some are worse. RealtyTrac is referring to this as “foreclosure stuffing” or holding the inventory off the market to let the prices rise (and good luck to all those foreign buyers).
Well, we all know this has been going on, but interesting for RealtyTrac to come right out with bonafide statistics (somebody didn’t get paid-off?). Didn’t I start calling this “the controlled burn” a few years ago??
Meanwhile, many other distressed property owners are in lengthy loan modification negotiations with their banks and those will go nowhere except further into default. The banks have done a great job setting the bottom and getting us to come off the bottom. Where this goes is anybody’s guess. But the next round of REOs will be handled via online auction. This will be fun…
Thanks for reading!