Market Summary: February 23 – March 8
The Mammoth MLS is reporting 12 closings in Mammoth Lakes for the period ranging from a low of $165,000 to a high of $1,585,000. This is one (1) less closing than the previous two week period. Of the 12 closings, only six (6) were financeable (conventional) properties (for various reasons) and four (4) of the six were in fact financed with conventional loans. Amazingly, two of the closings were single-family lots.
This is not normally the time of year that lots sell, but with almost no snowpack at the town level, maybe not so surprising. During the period there were NO REO/bank owned property closings and NO short sale closing (what a difference a year makes!). The local sales volume is down but consistent. Some really “old dogs” sold during the period, but I’ll get to that.
At the period’s end there are 97 condominiums listed for sale in Mammoth Lakes, that down six (6) from the last period. But the previous period experienced an unusual upward surge. Some of the decline were sales, and some were expired listings. The new snow of last weekend is certainly going to rekindle the winter, and we are experiencing a nudge in future condo showing appointments.
Single Family Inventory
The inventory of single-family homes moved up a couple to 45. There are only 4 homes listed under $549,000. One of the new “spec” homes being built at Graystone at Sierra Star has already gone to contract (and there will be more coming). There is evidence of strong support in the new to-be-built homes in the ~$1.5M range. And some of the recent (the last year) buyers in this range will be sorry for not paying attention to this opportunity compared to what they purchased. And some of the recent buyers in the low-end are paying high prices for seriously compromised properties.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up eight (8) to 48 for the end of the period. Of the 48 properties in “pending,” six (6) are “contingent short sales” (the same six) and 22 are in “back-up” status. Of those 48 under contract, 32 are under $500,000. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up five (5) to 70. So sales have ticked up.
Market Updates and News
It was a “good” news period for Mammoth. Last week’s snow event put five to seven inches of water on the local Sierra range and four feet of heavy snow on the Ski Area. It equated to a couple of feet here in town. The ground has been warm all winter and the sun is now high. The snow won’t last around town but should last awhile on the ski runs. We need more. The occupancy levels and traffic in town has increased noticeably. This weekend the Town reported occupancy in the 70-75% range. And they were here. Mid-week occupancy also jumped. From first-hand experience, the skiing has improved dramatically.
The other good news surrounds the upcoming Mammoth Lakes Town Council election. The election is in early June and what is important is both who is NOT running and the interest level of those who ARE running. There is inevitable and major change coming. Long (long) time council member John Eastman announced months ago that he would not run. On-and-off council member and local attorney Rick Wood has decided not to run. And after only four years, local real estate appraiser/broker Matthew Lehman has decided not to run. I’m sure the level of involvement and chaos of the last four years has simply worn them all down. While many are glad to see them leave, losing continuity and “history” always presents concerns.
The even better news is that there are now eight candidates (“pulled papers”) for the three open spots. The last (non) election there was only one candidate for the one open spot. So now we’ll have a real election and all that comes with it. The eight candidates are from a broad cross-section of town including three women and several business owners. There is no clear “leaning” amongst the group except that they care about the town.
So now we can have some intelligent campaign discussion and debate about Mammoth’s future. And the “old guard” really won’t be around to talk about the past. In fact, many of the uncertainties of the past have been resolved (for better or worse). Whomever gets elected can realize the best “fresh start” that any council has experience in many years.
The Mortgage Bankers Association issued a chart last week that showed a serious plunge in mortgage applications, noting that new applications fell to their lowest level since 1995. At the same time both Wells Fargo and Chase announced major layoffs in their mortgage divisions. Bank Of America has already gutted their divisions. This will be a trend to watch as 2014 progresses. Interest rates remain low and very good. So far, the Dodd-Frand regulations have not killed or greatly compromised the ability to get a home loan.
But is this a front running sign of where the real estate market is going?? The remaining loan officers and direct lenders are getting more aggressive about marketing to brokers like myself (I get their emails all day long). And if the market does accelerate, will their be enough officers to handle the volume of transactions?(many have simply left the business). Despite some recent success on relatively short closings with loans involved, I’m now seeing that trend going the other way. The days of 60-day escrows may return.
I read a comment the other day that “Real estate across the nations is hyper-local; from block-to-block, house-to-house, individual-to-individual.” I can frankly say that in my 28 years in the Mammoth real estate business I have never seen this statement as true as it is today. The local market is up, down and sideways. I can’t explain why some properties don’t sell and why some do. “Buyer beware” has never been so accurate.
One of the most curious market trends of the past few weeks has been condo hotel units coming to the market that have very strong, verifiable rental revenue streams. Yes, the reservation management folks do take a big bite of those gross numbers, but some of these units are producing substantial revenue streams. And yet, the owners are looking to liquidate (and some don’t have equity). What do they know??
The sale of Snowcreek #306 at $365,000. This is an end-unit 2 bedrooms + loft / 2 baths in Phase 2. This phase of Snowcreek was renovated a few years back and is in very good condition. The grounds are beautiful. The end units of this floor plan are desirable because of the extra windows. But this is not indicative of rising prices based on sales in the past couple of years…
The sale of Mammoth View Villas #49. This 2 bedrooms + loft / 2 baths closed for $275,000. This is a sale going the other way. Somebody paid high for proximity to the Village. These are the “creakiest” buildings in Mammoth (like an old wooden boat) and over the years most potential buyers have scoffed at the “French barn-like” curb appeal.
The home at 1671 Forest Trail sold for $470,000. Finally… I showed this property to soo many potential buyers over the past couple of years. It had a nice view out the back and the lot is flat and sunny and in a nice neighborhood between the Village and Canyon Lodge. But besides that most people couldn’t get past the fact that you walk in the front door into the kitchen, or that the washer and dryer were in the living room, etc. This 3 bedrooms + loft / 3 baths home sold for $205 per square foot.
The sale of 441 Forest trail for $360,000. This 3 bedrooms + loft / 3 baths A-frame is only 1400 square feet. But 1965 A-frames have serious limitations. Sold for $257 per share foot, that is more like the value of a conventionally built home of that age or newer. What the buyer also probably didn’t realize is the compromise of this location; this section of Lower Forest Trail is north facing and dark, and in a real winter remains icy. And people drive way too fast on this 35 mph limit stretch… Buyer was represented by an out-of-the-area agent.
The sale of 172 Snowcrest at $487,500 is another head- scratcher. This is a lower-end neighborhood and this is a 3500+ square foot 1964 museum piece; right down to the harvest gold formica, plaid carpeting and spiral staircase. But the buyers got a bargain at $136 per square foot.
The high sale of the period is 51 Ridgeway at $1,585,000. This is a high-end spec home from builder John Hooper. In fact, it is just starting construction and this offering and sale is actually the sale of the lot and a signed construction contract. But for that price the buyer will receive a brand new 3200 square foot, 4 bedrooms / 4.5 baths modern craftsman home with panoramic views in a premier neighborhood. And the buyer will get to select the finishes. Makes all the sense in the world to me!!… “block-to-block, house-to-house.”
Other Real Estate News
Some Mammoth second homeowners go to great lengths to maximize the value of their properties AND have an adventurous life. They are always looking for new opportunities. And the “house swapping” concept is not new. But a newer website and concept named SwapNights is gaining traction. They are focused on international accommodation owners AND operators looking for non-simultaneous exchanges of resort and vacation oriented properties. They include Bed & Breakfast operations. They are even promoting the idea of discounted rentals amongst their owners/members.
The business model is not looking for any type of percentage but rather “membership” fees. The initial two-month trial is only $2. Full membership is $66 per year. The operation is based in Australia so they may have greater ability to attract an international membership. As aging boomers have more free time on their hands this concept may catch on. And here is another tool that may make it blossom.
Thanks for reading!