Market Summary: October 20 – November 3
The Mammoth MLS is reporting 14 closings in Mammoth Lakes for the period ranging from a low of $171,300 to a high of $508,000. Ten (10) of the 14 closings were were condos selling for less than $285,000. Like the period before, the low-end condo closings were the significant part of the activity. During the period there was one (1) REO/bank owned property closing and one (1) short sale closing. For comparison sake, one year ago this newsletter reported 17 closings from $156,000 to $940,000 with three REO sales and one short sale. Twelve of the closings were under $275,000.
At the period’s end there are 103 condominiums listed for sale in Mammoth Lakes. So that is down by five (5) from the last period. There are 11 condos listed for sale under $200,000 and two are short sales. A telling comparison; one year ago there were 153 condos listed for sale (and that was a decrease of eight for that week).
Single Family Inventory
The inventory of single-family homes is down two (2) to 43. A year ago there were 53 homes on that market and that was a decrease of four.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down again by two (2) to 49 for the end of the period. Of the 49 properties in “pending,” seven (7) 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) increased by four (4) to 75. Again, for comparison, last year there was 94 properties “pending” in Mammoth (nearly double). The total MLS had 122 pending transactions. Interesting… the volume of sales is clearly down compared to this time last year.
Market Updates and News
The snow of last weekend was a surprise but very Mammoth-like; a couple of inches was forecasted and nearly a foot fell on the Ski Area. Now this isn’t enough to get the lifts turning but in the area around the Main Lodge where the initial snowmaking efforts begin, it is a godsend. With colder temperatures this week, they have been blowing snow day and night. The Ski Area will open this Thursday (Nov. 7) on natural and man-made snow. It won’t be great, a couple of “ribbons”… but away we go, pray for snow.
Cutting to the chase on real estate; I had more (lengthy) conversations with local appraisers the past couple of weeks. This has become almost entertaining. We were talking about specific deals but the discussion moved to the bigger picture. Nobody has a grasp on a clear market trend. While inventory is down, closing sale prices are trending up, and down. Even sales in the Westin Monache are up and down depending on floor plan (see below). The appraisers sounded somewhat schizophrenic.
The inventory shortage clearly has some buyers motivated to pay higher prices (and slower transaction volume will always motivate hungry agents to approve of such). With winter coming fast many shopping buyers are just backing-off and gaining patience. They’ll wait, and become more educated about the market… For someone who has sold real estate full-time in Mammoth for nearly 30 years, I would say the current “action” is pretty slow; just not that many people out looking at property. Some agents seem complacent. And some are looking for Kool-Aid… I’m heading to the tropics to go fishing.
The Dodd-Frank regulations become reality in a couple of months. I discuss some of it in my latest Mammoth Foreclosures blog post. There are some things the industry can anticipate and there will be the inevitable “surprises.” This is for sure; the total cost of real estate transactions will rise. The cost for loans will rise both in hard dollars and energy expended (more paperwork). Financed transactions (especially in Mammoth) are likely to become 60-day escrows as a matter of due-course (shades of the 80’s and 90’s).
The lending industry is anticipating a myriad of problems and increased difficulties in getting loans closed. Lending will become much tighter?? Most are saying “get your financed deals done before the end of the year.” Fence sitting sellers who have been hoping for a little more appreciation may regret delaying when they get dragged into a protracted future escrow bogged-down by new and mis-understood obstacles. Cash buyers will become kings again. And we’ll just have to wait-and-see what other calamities D-F has in store for us. I have three escrows right now with financing and the delays are appearing already.
Just when we were led to believe we wouldn’t be hearing much from MMSA CEO Rusty Gregory, he appeared last week in public meetings trying to impress upon the Town Council that the Town’s zoning code revisions need to be approved, and soon. He is quoted in the Mammoth Times, “The cycle is turning back in Mammoth’s favor, if you wait too much longer, the opportunity could once again pass Mammoth by.”… Hmmmm. Now here’s a subject I am quite familiar with. Yes, developers “want certainty” but when they come forward with a new project they really don’t care what the “code” or the “specific plan” says or what the schedule of “exactions” is. They intend to re-negotiate the whole enchilada to their own benefit.
We witnessed this with Intrawest. They were masters and made fools of us. The Town Council buckled on nearly $100 million in legitimate developer impact fees (quoted from one of Intrawest’s attorneys). Without the cave-in, Mammoth would have some additional amenities and dollars (in the bank); including a much needed parking structure at the Village. If Mr. Gregory, as CEO of MMSA, hadn’t buckled (actually just disappeared) too, the community would be in much better shape today. I hope someone learned the lesson… but I can dream.
Ironically, because the Village lacks true synergy and the Ski Area is the landlord of the Village bed base, they are now stuck owning/subsidizing most of the restaurants in the Village (you wouldn’t want your high-dollar guests looking at vacant restaurant space, would you?)… And of course Mr. Gregory wants to promote new development in the Village periphery now that his corporate masters own most of the surrounding property (at cents on the dollar). And do future developers want to compete with potential development at the Main Lodge?
But the bigger question is; even with low land acquisition costs can a developer make a profit with new condo hotel units?? Intrawest didn’t like the high cost of construction in Mammoth. And while there have been a few high-priced sales recently, the condo hotel units in the Village haven’t escalated much off the bottom. And the rental revenue is plateau-ing because Mammoth lacks high occupancies (like all mountain resort communities). The best news for this segment is increasing finance options.
Only one (1) residential sale during the period, and that was an REO “duplex” in the Slopes area (between the Village and Canyon Lodge). This property is in a pure residential area but is a grandfathered (legal non-conforming) duplex. Nice location. This combined 5 bedroom / 3 bath, 2-car garage duplex is going to need a whole bunch of work. The garage is large but uninsulated. The large deck above looked like too much maintenance for me, especially in a bigger winter. This closed for $443,000.
Recent sales at the Westin Monache are interesting. Studio units may be the best performing (increasing) segment of the Mammoth market. A top floor but basic unit overlooking the entry closed for $215,000. We just had an REO Studio on the 6th floor with southern views come to the market for $209,000 and it sold immediately. These units bottomed-out in the past years at ~$150K. Meanwhile, 1 bedroom units aren’t showing the same performance. And we haven’t had any 2 bedrooms to even know; the only unit that sold in the last year (and has been back on the market) has a rather undesirable location.
The rest are ho-hum condo sales, but upward prices at Val D’Isere, Mammoth Ski & Racquet, Seasons Four, and Mammoth Creek. And downward prices at Forest Creek, Sierra Park Villas and Chamonix. There is no rhyme or reason in this market.
Other Real Estate News
The November issue of SKI magazine is quite refreshing. It is worth a place on the coffee table for the season. NOT pages and pages of $1K skis and boots, or tales of skiing steeps in far away places. The major theme is The HEART of Skiing; basically the essence of skiing and some good tid-bits thrown in. And healthy plugs for Mammoth and June.
First, is a very nice article on Dave McCoy as he heads into his 98th year. (He does state near the end of the article that he’s frustrated by what he calls the “corporate structure” on the Mountain…) But there are some great insights into why Mammoth Mountain is so special. Next is an article on the “celebrated families” of skiing including many classic photos. Next is an article about unique family adventures, adventures that most of us never experienced unless our father’s were “really cool.”
Two other things that jumped out at me; kids 12-and-under ski free at June Mtn. ALL winter. Now there is a family deal!! …And 71% of all skiers and snowboarders now wear helmets on the slopes. Ten year ago it was less than 30% (I think it was far less than that.) I know my helmet has saved me a few times in the past 10 years. If you are not part of the majority these days, you should be.
My next newsletter won’t be until Sunday of Thanksgiving, time to go fishing…
Thanks for reading!