Market Summary: January 4 – January 18
The Mammoth MLS is reporting nine (9) closings in Mammoth Lakes for the two week period ranging from a low of $140,000 to a high of $570,000. That is up two (2) from the period before. It is January in another drought winter. But the numbers will show there is surprisingly strong interest in the market despite the season and conditions. I drilled into my agents for many years that the sales volume of real estate in Mammoth “is a function of people in town.” When the crowds were here it was time to pay attention. That has changed as more and more serious buyers are glued to the internet watching the new inventory. So I’ll be watching the crowd versus sales correlation in the coming weeks.
There were no REO/bank owned property closing and no short sale closings reported. These distressed sales are still around but are clearly becoming less significant, for now. Of the nine (9) real estate sales, seven (7) were financeable properties and only two (2) were financed (quite the opposite of last period), so no real trend in cash purchase versus financed purchases. With 10-year bond rates dipping in the past weeks and expected to go lower, we’ll see if more buyers choose to seek the very attractive financing rates. And if the lower mortgage rates impact values upward. And how many of the recent cash buyers turn around and place financing on their properties.
At the period’s end the condominium inventory was up eight (8) to 139. And this increase doesn’t include many listings that expired at year’s end and have not come back as new listings. There appears to be a new listing concentration in Juniper Springs Lodge and Snowcreek. Probably just coincidence. Or maybe because there is basically no snow at Eagle Base. Snowcreek units have been good sellers with hints of appreciation in recent months. It also appears that several Snowcreek owners (by virtue of the MLS conditions) have decided it is an opportune time to move-up in the Mammoth market. But the inventory increases are somewhat unusual for this time of year.
Single Family Inventory
The inventory of single-family homes is up seven (7) to 60. And again, these are not all re-listed properties. Some are essentially brand new to the inventory in this market cycle. The $1M to $1.5M segment of the market remains very active. There is no “deal paralysis” in this segment of the market; sellers are willing to sell and buyers are willing to buy. Because of the activity we may see more and more owners come off the selling fence. Many should, this segment of the market doesn’t often see this level of interest and activity. It is a great time to sell a somewhat compromised or dated property in this price range. Who knows how long this will last??
The total number of properties in “pending” (under contract) in Mammoth Lakes is up 10 to 56 at period’s end. Of the 56 properties in “pending,” six (6) 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) is up nine (9) to 75. Again, solid sales activity for the post holiday period. Especially considering the diminished visitation rate due to the poor ski conditions. And the “post holiday de-compression” we normally experience.
Market Updates and News
The Martin Luther King Weekend crowd is relatively light. The reservation front desks I spoke to said they were booked about 60%. The Town said it was slightly higher but I’m less trusting of government statistics. Despite the tremendous effort by the snowmakers on Mammoth Mountain, the quality of skiing has deteriorated. The “115 open trails” as advertised is misleading. The snowmakers have made massive piles of snow in the last week in order to get the half-pipe made and open for an upcoming national event. That snow is now desperately needed on the runs surrounding the Main Lodge. And there is nothing but warm temperatures in the 10-day forecast. Sadly, it might be time to get the mountain bike back out.
Overall, a relatively quiet period in Mammoth. The last of the holiday visitors filtered out of town. The January ski crowd now follows the good snow so they aren’t in Mammoth… The local government agencies are awakening from their holiday slumber so real agendas will appear again soon… A front page headline story in this week’s Mammoth Times was about a lost cell phone… The Town’s new police chief learned that cowboy boots aren’t the optimal footwear on icy days… Town Public Works crews were performing normal crack filling maintenance on Minaret Road with hot tar–in January… And the internet slowdown I reported on in Mammoth during the holidays was a 1700% increase in bandwidth demand from a year ago. Suddenlink has already promised to upgrade certain hardware components to meet that level of demand.
In my recent Blog column Mammoth Foreclosures 2015 I expressed the difficulties of dealing with some of the new servicing companies in the REO realm. The worst by far is Ocwen Financial. I guess I’m not alone. This past week the LA Times reported that California is threatening to suspend Ocwen’s mortgage license. Part of the complaint is that Ocwen failed to turn over requested documents. That would be par for the course; being slow to respond or simply non-reponsive. Not a great trait for a mortgage servicing and asset management company. A large bulk of Ocwen’s business is in California. In November of last year Wells Fargo cancelled a deal that would have put Ocwen in charge of $38B in mortgage servicing. Ocwen’s stock is down 84% in the 12 months.
Along the same lines, Fannie Mae outsourced their REO asset management in the last 18 months but announced this last week that it was all being brought back under the Fannie Mae roof. Their outsourcer had been doing a good job, but somebody in the federal government probably discovered Fannie Mae was paying big bucks for the outsourcing while they had plenty of idle staff… The REO business is discovering the old phrase, “If it ain’t broke, don’t fix it.” …But of course Wall St thought they should be getting a bigger slice of the pie.
Deer Valley Resort recently announced plans to build a new gondola from Park City’s Old Town district to the core of the ski mountain. This new gondola would certainly alleviate a great deal of surface traffic and congestion. They also plan to build five or six new chairlifts to give access to 800+ new acres of ski terrain. Meanwhile, plans are moving forward to link the Park City and Canyons ski resorts with nearly $50M in lifts and improvements (when they say improvements they don’t mean build condos with the intent to sell them for a profit–they mean lifts and gondolas and associated buildings and improved ski runs). Looks like the Park City resorts see the need to stay competitive with the new Whistler/Blackomb peak-to-peak gondola experience.
Unfortunately, Mammoth Mountain continues to use the “financial crisis of 2008” and the current drought as excuses not to borrow free money to move on anything beyond capital maintenance projects. (Why all of these wealthy people buying second homes in Mammoth can’t influence this I have no idea.) But the upcoming EIS phase of the Main Lodge land exchange will be the opportunity for Mammoth’s local residents, ski and snow board enthusiasts, and Mammoth property owners to have their say.
Mammoth’s gondola system needs to be completed in full–not just some hodgepodge additions. This fits into the Transportation and Air Quality analysis of the EIS. The people entering the Ski Area at the Village, Eagle and Canyon Lodge portals need better and quicker access to the core of the Mountain. That has always been the plan except for the unwillingness of our equity fund masters to provide the resources. They clearly aren’t holding back in places like Whistler and Park City. The completion of the gondola system needs to a contingency of the land exchange… Stay tuned.
Not much in the noteworthy category. Three sales in Snowcreek and great units at good prices. A lovely 3 bedroom / 3 bath townhome in Phase 5 that backs up to the Forest Service open space sold for $570,000. Beautiful setting and one of the last phases within the Phase so lots of modern fit-and-finish. A real nice end unit 2 + loft in Phase 4 sold for $405,000. Good price for a unit with a remodeled/modern kitchen.
Other than those, stable prices with closings at Solstice, Westin Monache, Sunrise, Sierra Manors, Woodlands and a vacant lot on Davison.
Some impressive properties went to escrow during the period, so we’ll be talking about those in the future.
Other Real Estate News
The radical price drops in oil should only help Mammoth but the eastern Sierra does have significant property ownership from oil industry types, especially ones from Bakersfield who are heavy summer users (Bakersfield or Mammoth in the summer? you choose…). Hopefully, they weren’t too leveraged.
Meanwhile, with Google, Yahoo, Facebook and others moving into the Playa Vista neighborhood of Los Angeles the likely end result is more younger and affluent potential skiers and snowboarders in our prime market. Of course, they are so close to LAX they might just choose to go to Park City instead.
Thanks for reading!