Market Summary: November 3 – December 1
This newsletter is for the past 4 weeks. The Mammoth MLS is reporting 28 closings in Mammoth Lakes for the period ranging from a low of $100,000 to a high of $1,300,000. The market has been slow but consistent in the past weeks: averaging one (1) closing per day. The sales were spread evenly through the whole price range. During the period there was one (1) REO/bank owned property closing and one (1) short sale closing. Of the 25 closings that have financing available, 13 of them were financed with conventional loans. Fewer transactions are all cash right now. We’ll watch this trend. I expect financing to become more difficult (Dodd-Frank) and cash buyers more discriminating.
At the period’s end there are 90 condominiums listed for sale in Mammoth Lakes. So that is down 13 from the last period. There are now only six (6) condos listed for sale under $200,000 and two are what this broker would consider “significantly overpriced.” Condo inventory is simply low-low-low.
Single Family Inventory
The inventory of single-family homes is up by four (4) to 47 including two new REOs.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up one (1) to 50 for the end of the period. Of the 50 properties in “pending,” nine (9) are “contingent short sales” and 25 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) increased by six (6) to 81. Again, consistent, but relatively low volume.
Market Updates and News
Although the Ski Area’s web site announces more-and-more terrain/lifts open for skiing, it will begin to be “nervous time” here real soon. I was hoping to come back to Mammoth and enjoy quality skiing. The 10-day forecast has one day of snow showers in it. But really cold temperatures forecasted in the next week will allow them to make snow like crazy. This Thanksgiving weekend is one of the slowest that I can remember. But conditions can change quickly here in Mammoth. The increasing success of summer business is looking better all the time.
The Mammoth real estate market is in the doldrums; still affected by the lack of quality inventory, BUT the buyers are losing their sense of urgency too. Southern California real estate is cooling and that will influence Mammoth. Excellent ski conditions can influence the market too. They ebb-and-flow together. And the rush to “get-in-before-Christmas” will dissipate. 2014 may turn into the “the very interesting year.”
The Town’s financial woes may have turned around, unless the accounting is all messed-up. A “pre-audit” was presented at a recent Town Council meeting and the staff announced that the Town has “the most TOT (bed tax) we have ever received, in any year.” Further analysis is in order but the Town does have a new computer system, and it will be able to provide that type of detail. But there appears to be a significant jump in TOT. The Town has been making serious efforts to collect “escaped” taxes. And an increasing number of property owners running nightly rental programs are cooperating too.
Settling the litigation and bankruptcy has saved some of the proposed annual budget expenses. And we have the TBID in place to back-fill the pay-off and spend more on marketing. Now we just need it to snow. There were even talks about replenishing the emergency reserve fund and road maintenance fund. And the Town is hiring more “reserve” police officers; retired but experienced officers who now make Mammoth home or part-time home. This is all very good news.
MMSA CEO Rusty Gregory continues to talk about (new) development. (Is it the only way to “add value” at this point?) But the talk is more about getting the public officials in the mood to increase densities, reduce developer impact fees/exactions, etc. This is the early 90’s all over again; get approvals in recessions and build in booms. But does Mammoth have a boom cycle in it’s future?? Maybe, if they sell to Vail. Rusty’s recent talks are about finally getting around to a real base facility at Eagle.
He has negotiated a lease for the adjacent Camp High Sierra property. The intent is for an expanded children’s and beginner’s area. Maybe this will be the catalyst to finally see it to fruition. But the drought winters of ’12 and ’13 stalled the recent momentum. Or maybe Barry Sternlicht himself wants to put his stamp on the hotel at the Chair 15 parking lot. Maybe a “W” or maybe a Baccarat? Those would be nice!
Rusty is also talking about a new boutique (condo) hotel to complete the original plan of the 80/50 project. The new proponent is Severy Realty Group–Dana Severy ran the Intrawest operations here in Mammoth in the ’90s, so he is no stranger to Mammoth development. He actually got things done. No one can fathom that they would do another fractional project (like 80/50). But full ownership might sell, especially now that the Fireside Condos project doesn’t look like a trash heap. And the underlying land has been acquired inexpensively. But the developers would certainly need to see a clear appreciation trend in the market. We’ll see if that happens organically in 2014. Meanwhile, they may be counting on some new, magical hyperbole. I can’t wait to see what that is!
Moving REO properties to online auctions continues to struggle in the Mammoth marketplace. One recent property had quality bidders on several rounds but no decision was made by the auction house. Now the property is back on the market in a more traditional REO manner and is languishing on the market . Meanwhile, it appears that some short sales may be kicked into the auction process… can’t wait.
Ten of the 28 sales were low-end condos under $300,000. Notable was a 1 bedroom / 1 bath REO condo at Aspen Creek that sold for $153,500. Pretty cheap. A 1/1 at Krystal Villa East sold for $100,000. These would re-enforce a downward trend. But others are moving up; a clean 2/2 at Discovery Four closed for $174,900, a corner 1/1 at Summit closed for $213,000, and an upper floor Westin 1/1 closed for $300,000.
Other upward sales; a 2 +loft/ 2.75 at Winterset closed for $345,000, a very clean Presson townhome on Mono St. closed for $370,000, a clean but ho-hum location 2+loft at Mammoth Creek sold for $405,000.
Two single-family sales at $529,000 and $550,000. Both homes had what I consider serious “incurable defects.” Some single-family buyers have become impatient. A very nice but older (1990) home in The Trails sold for $735,000. It sold very quickly. The Trails has shown solid price support in recent months.
A couple of high-end condos closed; a Timbers for $910,000 and a Stonegate for $920,000.
Two low-end income properties sold at $225,000 and $385,000. Investors continue to chase yield but these can work for owner-occupied (even as second homes) properties.
Other Real Estate News
A recent trip by two Town Council members (with our new Town manager) to Whistler created some interesting discussion (these trips always do). Today’s concern is that Mammoth doesn’t have sufficient occupancy levels (%) and the reason is that we don’t have enough “quality” places for visitors to stay; that the stock is getting too old (so we need to build more luxury properties).
According to Rusty, we “don’t have the kind of transient occupancy options that people want to stay in enough to get to that number, which means we need new development.”… While Rusty is arguing for new development, others could certainly see it as a sound argument to allow transient rentals in residential neighborhoods (and there would be little or no time lag). Hmmm… we’ll see if anybody picks up on this. We all know our visitors want to stay in homes.
The Debt Forgiveness Act is scheduled to expire at the end of this month and it probably will. But recent news out of Senator Feinstein’s office is that California (short selling) homeowners will be able to proceed as if it is still in place. Apparently the Senator asked the IRS some months ago for a “letter” addressing the non-recourse/recourse nature of California mortgages and the IRS agrees that non-recourse debt forgiveness is NOT subject to a 1099.
This still doesn’t help many Mammoth property owners who’s mortgages are recourse. But it is quite interesting. With the Act expiring, it appears the IRS will rule on the status of each individual State… I’m still wondering when the day may come for recourse debt to be excluded also. That may shake loose some of the inventory we desperately need.
Thanks for reading!