Market Summary: January 26 – February 9
The Mammoth MLS is reporting 12 closings in Mammoth Lakes for the period ranging from a low of $190,000 to a high of $959,000. This is three (3) more closings than the previous two week period. Of the 12 closings, nine (9) were financeable (conventional) properties and six of the nine were in fact financed with conventional loans. The cash buyers are clearly becoming fewer in number. During the period there were two (2) REO/bank owned property closing (both upper-end homes) and NO short sale closings. The market is not dead despite the snow conditions and low inventory. The town has been very quiet the past few weekends. But that may change.
At the period’s end there are 90 condominiums listed for sale in Mammoth Lakes, and that is an increase of six (6) from the last period. There are some brand new listings (never seen in the recent past) on the market. There are also new escrows/sales.
Single Family Inventory
The inventory of single-family homes is up six (6) to 45. Again, some brand new listings coming to the market and some re-hash/ re-lists. A couple of new sub-$600K decent home listings, but the prices are high in my mind (and on a per-square-foot basis). But some Mammoth real estate agents are beating the “prices are going up” drums pretty loudly.
Residential Lot Inventory
The vacant lot market hasn’t changed, and there are still a couple of attractive residential building sites in the ~$200K range.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up DOWN seven (7) to 41 for the end of the period. Of the 41 properties in “pending,” six (6) are “contingent short sales” (same as it has been; obviously they are just stalled in the short sale process) and 13 are in “back-up” status. There was a significant move down in “back-up” properties, so a good number of properties in escrow are about to close (I know, I have a couple). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down four (4) to 65.
Market Updates and News
The best news for everybody is that it is snowing in Mammoth. Well, at least on the upper elevations. At town level, this weekend storm has been mostly rain and wind. The satellite shows our old friend the “pineapple express” is in play. But this seems like a fairly mild version compared to those in the past. The wet snow is perfect for the Ski Area; it will cover up most of the remaining rocks that were still showing on the face runs this past week.
Based on phone calls and emails I receive, there are lots of antsy MVP holders who are dying to get some real skiing in. This and the rain in So Cal should also help make the upcoming President’s weekend and Ski Week moderately successful. I can imagine the reservation company phones are ringing. Several “pineapple express” patterns between now and the end of April could certainly resolve the State’s severe drought. At least the stagnant high-pressure pattern that has been with us the past 13 months has broken down.
Regardless of this current storm and the potential to recoup a bit of the ski season, many local residents are rightfully concerned about the drought’s effect on the community. But Mammoth Lakes has been through this before. The Ski Area must be commended for the snowmaking and snow management the past couple of months. Twenty-plus years ago when Mammoth suffered through a similar drought, the Ski Area had just started dabbling in snowmaking and it was almost ineffective. Today it is highly effective. I would expect to see it expand even further. It keeps enough skiers and snowboarders on the Mountain to “keep the lights on.”
But all-in-all, this (lack of) winter will have far reaching financial repercussions both for the Town due to lower bed tax revenues and for the balance of businesses in town due to poor cash flow. But as I have reminded many in the past few weeks, Mammoth’s local residents, especially the ones that have been here for decades, are a very resilient bunch. It is always interesting to see how people react. I’m often amazed that some people stay in business. And a small town amplifies what you know. I look around and see folks that have been through drought, and earthquake scares, and bankruptcy, and divorce, and serious medical problems, and on-and-on. And their doors are still open…
For the local real estate market, inventory is rising slightly and transaction volume is decreasing. The lack of snow and visitors might be a neutral effect; buyers aren’t actively looking (and euphoric after a great day of skiing) in the market, and some owners are obviously seeing a window to sell while their property sits vacant or unused. The recent stock market gyrations send a confusing message too. Mammoth’s real estate purchases are often funded out of stock portfolios.
There is no doubt the strength of the stock market in 2013 provided momentum for Mammoth real estate. A stronger stock market could keep generating more sales. Conversely, a falling market might create more conversion to real estate. And the lack of a “safe” return on cash doesn’t hurt our market either. And some continue to buy for the combination of usage AND a hedge on the fear of anticipated inflation. And low interest rates continue to be attractive. The macro effects on the local market continue. And droughts don’t last forever.
One very positive micro trend in the local market; John Hooper is back successfully building “spec” homes. Hooper has undoubtedly built more single-family homes in Mammoth than any other general contractor. His “signature” homes are quite recognizable from each era; the late 80’s, 90’s and early 2000’s. He built most of the fourplexes that are in “the Ghetto” in the 90’s. He retired in the mid-2000’s but has now returned. He has always had a good sense of the local market. This go-round he is focused on the ~ $1.5M range homes.
He just put his third property to contract. And now he is ready to start on the six new lots on the Sierra Star golf course that he carved out of the Solstice II property. That is a very attractive location, and a short walk to the current clubhouse. Hooper’s timing appears right; DataQuick recently announced that 2013 California home sales with prices above $1M rose to their highest level since 2006 and sales above $2M showed the strongest gains.
The Town’s new fireplace ordnance impacts thousands of Mammoth properties, visit my blogsite for my most recent post on the subject.
The REO sale of 139 Ridgecrest Drive for $640,500 has many of the twisted characteristics of the present REO market. This 3 bedroom / 3 bath, family room, 2-car garage home was first sent to the new auction process by the bank. Serious bidders were willing to go to $700,000. But for some screw-ball reason the auction company couldn’t respond. After several auction “attempts” and pissing-off qualified buyers, the property reverted to an asset manager who formally listed the property in the conventional manner.
But the property developed a “black-eye” because of the previous shenanigans. Eventually, a buyer appeared. Through all of this, the out-of-area (and obviously less costly) property management company failed to properly winterize the property and during the cold snap of early December the plumbing suffered damage. Several thousand dollars later the plumbing was inspect-able for the buyer. Classic penny-wise and dollar-foolishness.
The REO sale of 300 Twin Lakes Lane for $959,000, this is a 4 bedroom / 4 baths, 3-car garage, 2700 square feet home. Here is a modern built Hooper home (one of his last) built in the old “pit” between Canyon Lodge and the Village. This home was built in 2005 on the cusp of the transition from the popular log detail design to Craftsman design.
A 2 bedroom / 2 bath, 1-car garage in Snowcreek 5 closed for $445,000. This was one of the last units built in this phase so it had all of the modern touches. Nice decks and a little view out the back. Very good unit altogether but one thing I’ve really come to notice in this phase and these buildings is the length of the driveway; some barely have the length of a car and other have room for two or more. That’s an important consideration in winter.
A 2/2 at Juniper Springs Lodge and a 2/2 at White Mountain Lodge closed at almost the same price, interesting because the WML is much larger (about 200 square feet) and more modern, but the JSL is ski-in and ski-out.
One of the worst 2 bedroom + loft condos in all of Mammoth (and had been on the market for years) sold for $272,000… An in-demand 1 bedroom + loft / 2 bath at Sunshine Village sold immediately for $200,000 cash. Those floor plans have risen in value in the past 12 months… A very clean 3 bedroom / 2 bath at Sierra Manors sold for $295,000… A nice 3 bedroom / 2 bath, 1-car garage at Chateau Blanc sold for $350,000.
Other Real Estate News
Two trends the real estate industry is watching closely are the volume of cash buyers and the volume of “flipping.” Both are considered critical to long-term recovery and stability of the housing market. With increasingly better statistics coming out of all real estate industries, these trends are easier to track. The volume of cash purchases has been very high. In December of 2013, 42.1% of all residential purchases in the U.S. were made with cash (RealtyTrac). That is up from 18% in Dec. 2012. For all of 2013 the number was 29.2%.
The industry doesn’t believe these large percentages are a healthy indicator; there is too much influence in the market by institutional buyers AND too much influence by the wealthy top percent. Basically, What happens when these buyers leave the market? I will continue to monitor the Mammoth market for cash versus financed transactions. So far, Mammoth appears to be opposite of the national trend with more buyers utilizing financing.
The second trend is “flipping.” The industry now considers it a flip when the property is sold within six month after selling. Flips accounted for 4.6% of all residential sales in 2013, up from 2012 and up from 2.6 in 2011. The double-edged sword of flipping is low inventory; it makes properties hard to find but when the flip comes to the market there are buyers ready. A rising price trend in the general real estate market is the flipper’s best friend, but each market is different.
Here in Mammoth, flipping has been almost non-existent in the last few years. Most buyers have simply been happy to find a desirable property and hunker in. And like many things in Mammoth, the cost of renovation often erodes the flipper’s profit projections and potential.
So for now, the recovery of the Mammoth real estate market doesn’t appear to be influenced by either cash buyers or flipping.
Thanks for reading!