Market Summary: February 1 – February 15
The Mammoth MLS is reporting 11 closings in Mammoth Lakes for the two week period ranging from a low of $120,000 to a high of $1,325,000 (residential). There were no REO/bank owned property closings and no short sale closings reported. Of the 11 real estate sales, nine (9) were financeable properties and three (3) were financed. So plenty of cash buyers closing transactions in the period.
At the period’s end the condominium inventory is down one (1) to 154. But even though the total condo inventory was slightly down there were 17 new condo listings in the period. And all but one are new-to-the-market–not re-list or re-hash. They are all through the price spectrum. And some of these new sellers have been led to believe there is 25% price appreciation in the market in the past 18 months. Or at least their asking prices would leave me to believe that.
I also notice that many of these new listings are sales that occurred in the 2005-2007 time frame, or the peak of the last market cycle. These are owners who might have been short sale candidates or even foreclosure “victims” at some point in the past. But they still own. And some of the listings indicate they will “bring money to the close.” It would appear many of the owners think it is time to cut their losses… The difference in the total condo inventory and the new listings is a byproduct of some sales and expired listings. This period last year there were 90 condos in the inventory.
Single Family Inventory
The inventory of single-family homes has swung the other way and is down one (1) to 51. There are five (5) homes listed under $500,000 and that includes a small A-frame, a dinky little house on a large lot, a partially burned gambrel, a small 2 bedroom near the Village and an old rental flophouse. There are 16 homes listed between $500K and $1M. The single-family inventory was at 41 a year ago. The market is begging for new home listings.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up nine (9) to 67 at period’s end. Of the 67 properties in “pending,” six (6) are “contingent short sales” and 37 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up eight (8) to 86. Total pending sales in Mammoth was at 41 a year ago. So despite the drought driven decrease in visitors the local real estate sales are solid.
Market Updates and News
President’s Weekend and the following “Ski Week” is the busiest period of Mammoth’s winter outside of Christmas/New Year’s. My memory is crowds and blizzards. This year it is almost summer like and the ski conditions have improved due to the precipitation of last weekend. I say precipitation because much of it was rain, even on the Mountain. But southern Californians love to ski in warm weather, so this holiday period will be an ambivalent ski experience. The good news is the crowds are here and the community will get some economic relief.
The big news of the period was a bizarre brush/forest fire that that struck the Swall Meadows area between Mammoth and Bishop. It is now being called a firestorm. Last Friday the high winds of an oncoming winter storm and apparent downed power lines created a freak fire at the base of the Sherwin Grade. The fire moved up hill and against the prevailing wind and then shifted and moved back down the slope. Rain eventually halted the major progress of the fire.
Almost 40 homes burned to the ground. If it wasn’t for the rain that number could have doubled or tripled. Many of these homes belonged to Mammoth people. The Sheet’s owner/publisher Ted Carleton lost his home. You can read his personal account here. A worthy read.
One of my clients lost their home I sold them in 2005. Luckily there were no fatalities or injuries except for a few minor ones to fire fighters. There are plenty of stories, accounts and photos in cyberspace for those interested. I’ve spoken with and tried to help several of those who lost their homes; ranging from trying to locate adequate long term rentals, trying to establish values of properties at the time of the fire and trying to answer the question “What will this do to real estate values in the immediate neighborhoods.”
And here are some early real estate and life “take-aways” amongst a great deal of uncertainty;
- If your home burns to the ground you will be in shock for at least two weeks. Think about the ramifications.
- Working with a local insurance agent is invaluable. The local agents here have jumped right in and immediately have checks for rentals and other necessities. Also, the next time you renew your homeowners insurance have an “adult” conversation about your policy and what it will cover if something like this happens. The real insurance telltale will be 12 months from now.
- In the digital and “cloud” age it is easy and critical to have dozens of photos of your property and possessions and important documents stored in the cloud for future reference.
I’m sure the coming months will provide new insights. We’ll see about real estate values. Most of the homes will be rebuilt. One couple who had no mortgage told me they will not rebuild. We wish all of these people the best in the coming months. They have plenty of support.
The U.S. Grand Prix that was scheduled on Mammoth Mountain last weekend was canceled due to rainy weather and high winds. The Ski Area had put tremendous effort into making snow to create the half pipe and super jumps. The event was scheduled to be broadcast live on national TV. Very unfortunate. A giant marketing opportunity lost.
Looks like the nightly rentals in single-family neighborhoods debate will take a notch up in the coming months. A faction of local neighbors have filed a ballot initiative that if passed would force the Town Council to seek voter approval before changing the law. This is a clear effort to head-off any action by the Council in overturning the existing ordinance. Although there has been no vote by the Council, there appears to be a majority on the Council in favor of overturning the ordinance.
This new ballot initiative would likely pass. So this whole debate may end up being decided by the ballot. But many of the affected homeowners won’t be part of the vote. Meanwhile, the visible level of these illegal rentals has never been higher. I am in these neighborhoods all of the time and I see it clearly.
In case you missed it, here is my real estate column that appeared in this week’s edition of The Sheet. Ted was glad to have it because he was a little short of time this last week. I really wanted to call this column “Mammoth Pork.” The Main Lodge land exchange was a rider on the big Washington DC pork filled Bill of last December. I’m hoping we can get a little pork for the Mammoth community out of the deal. I’ve already had some very favorable emails about the column, including one from a 20+ year employee in MMSA administration.
After my comments in the last newsletter about fractional units and the 80/50 project, there was new listing in 80/50; a 1/3rd interest in a 1/8th interest fractional. I hope management can figure out who is going to use it and when…
The weirdest sale of the period (and maybe for the year) is the sale of the premier 3 bedroom / 3 bath unit at Grand Sierra Lodge. It closed for $1,225,000. It closed a year ago for $1,049,000. In the interim it was extensively remodeled including major soundproofing, all new drywall, and beautiful modern kitchen and baths. The listing broker was telling potential buyers that the owner put $400,000 into the remodel. It could be. Just getting the demolition and new materials into this location is a major ordeal. It certainly wasn’t a “for profit” flip.Too bad HGTV wasn’t part of the saga.
Another John Hooper built home in Greystone closed for $1,325,000. Hooper has moved across the street and has 12 more lots to build on along the 8th hole of the Sierra Star golf course. The market is absorbing them as fast as he can build them.
Two larger homes in the Mammoth Slopes closed for $860,000 and $1,017,000. A 3 bedroom / 3 bath unit in White Mountain Lodge closed for $825,000. I hope they like to people watch. The balance were just average condo sales.
Other Real Estate News
During last week’s fire event a large portion of Verizon’s fiber optic line was destroyed. Mammoth was without Verizon wireless service and DSL for several days. The original word was that it would be months before it would be restored. But the new Digital 395 fiber optic line saved the day in more ways than one. Not only did it provide clear communication service for law enforcement and fire resources during the event but it also allowed Verizon to tap into the new buried line and restore service to Mammoth Lakes. Without the new Digital 395 line this fire would have put Mammoth back to 1993 communication levels for quite awhile.
Barry Sternlicht and Starwood Capital (Mammoth Mountain’s majority owner) sold the Baccarat Hotel in New York City last week for an industry shocking $230,000,000 or $2M per room. And the hotel isn’t even open yet. A Chinese insurance company was the buyer… This follows a record breaking year in the hospitality industry with hotels having their highest-ever average daily rate of $115 per night and revenue per available room of $74 per night…
Revenue figures like this should be an indicator for increasing values in Mammoth’s condo hotel stock. But there is a reason we have condo hotels instead of true hotels; mountain resorts have low annual occupancy rates. The simple reason the hospitality industry is doing well is because they have stayed away from areas with low occupancy rates, like Mammoth.
Lots of real estate open house this weekend as the gorgeous warm weather was perfect for visitors to get out and about.
Thanks for reading!