Market Summary: April 26 – May 10
The Mammoth MLS is reporting 10 real estate closings in Mammoth Lakes for the two week period ranging from a low of $150,000 to a high of $645,000. That is up one (1) from the previous period. Of the 10 closings, only seven were technically financeable properties and six of the seven were purchased with new loans. There was one (1) REO/bank owned property closing and one (1) short sale closing reported. It is a good time to make some comparisons to the last two years. One year ago the Mammoth market had 10 closings for the period. Two years ago the period had 18 closings including two REOs and two short sales.
At the period’s end the condominium inventory is down five (5) to 169. But this is misleading. There were 14 “new” condo listings during the period. All but one are truly new-to-the-market. The one old one was on the market all last summer and rented for the winter. It has come back at a substantially lower price. But the misleading part is the dozen plus condo listings that expired during the period. Lots of agents run their listing periods to the last day of a month. These will likely come back to the market soon.
It will be interesting to see if we hit 200 condos on the market this summer. We haven’t seen that in a long time. There were many summers in the 1990’s that the condo inventory would peak in the 350 range. And plenty of new condos have been built since then. One year ago there were 106 condos on the market. Two years ago 112.
Single Family Inventory
The inventory of single-family homes is stagnant at 61. There were a couple of new listings and a couple of properties went to escrow. I’m talking to some owners who intend to list their homes this summer, but nobody seems to be in a hurry…..Mammoth is very quiet. Memorial Day weekend and Mule Days in Bishop will bring a small crowd and then it will be a few weeks until the Motocross crowd shows and after that summer will start. One year ago there were 51 homes on the market. Two years ago there were only 36 homes on the market for the same period.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down another four (4) to 35 at period’s end. Of the 35 properties in “pending,” six (6) are “contingent short sales” and 22 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down seven (7) to 54. One year ago Mammoth had 70 properties (double) in pending status and the total MLS was at 87. Two years ago Mammoth had 71 properties pending and the total market was at 99. Clearly, the transaction volume is down significantly in Mammoth. Nationally, second home and vacation property sales are reported as strong. I can only surmise that the worsening drought is the most compelling factor.
Market Updates and News
Mammoth Mountain Ski Area was scheduled to close today but a foot of fresh snow that fell last Thursday night will extend the season, maybe until Memorial Day weekend. It dumped about eight inches of fairly wet snow in town. The enthusiasm for skiing has waned for all but the hardcore. But we’ll take the water if nothing else. There is more precipitation in the 10-day forecast. The dry winter may turn into a wet summer.
The Town Council deferred making any decision on the relocation of the ice rink but did ask the staff for more information. Moving the rink will obviously become more expensive (and less feasible) as all the necessary details are brought to light. The Council was urged to reopen dialog and negotiations with the School District who is the current landlord. The public comments at last Wednesday’s hearing were quite interesting; the local hockey enthusiasts seemed quite happy with current location, they just want the roof so the season can be extended. One of the reasons the current location works is the proximity to the schools–the hockey players want to teach their kids how to play hockey, and the kids apparently are eager to learn.
Meanwhile, the Homeowners Associations that surround Mammoth Creek Park West are in defensive mode with one even threatening litigation. There are five “impacted” Associations and none of them want the ice rink at this location. The key issues are visual impacts, noise, traffic and overall nuisance factors. This is a repeat of 1998 when the Town considered placing the ice rink on this property…..Some of the more prominent and longstanding administrators around Mammoth have spoken out in favor of retaining the existing location and question why the Council simply doesn’t negotiate a longer and more favorable lease with the School District.
The School District has expressed a willingness to sit down and discuss it. The “purported” obstacle to a longer term lease is the District may need the land for a future day care center, but the land wouldn’t be available until 2027 anyway under the current terms. One citizen pointed out that there are tens of thousands of empty square footage at the Sierra Center Mall that likely will never be filled and could be used for a large day care facility. The County social service offices are already the major tenant in the building, so it seems like a perfect fit.
And others have pointed out that the ice rink and multipurpose facility was originally planned to be located in North Village as part of “development agreement” negotiations with the condo hotel developers. The indoor facility was conceived to be a perfect place for (off season) high altitude hockey training and useable for conferences and conventions in the shoulder seasons to keep the Village bed base full. So much for that. The short-sighted leaders of Mammoth buckled in the early 2000’s under the pressure from the developers and left tens of millions of dollars on the table…
I had a conversation with ML Asst. Fire Chief Thom Heller this past week and he confirmed that have inspected over 1,000 of the new fireplace retrofits, and that is in less than two years time. He also confirmed that the real problems are concentrated in specific condo projects and their original chimney system design. He also stated that any of the fireplace inserts where the owners/occupants were burning manufactured compressed logs over a long period of time have shown to be a problem. Apparently the compressed logs burn much hotter than regular firewood.
Just as I mentioned some obvious “flip” properties in my last report, Realty Trac’s 2014 year-end report states that 5.4% of all single family home sales were “flips.” The average gross profit was right around $65,000 which represented a 37% gross return. So these typical flips are low-end properties and with a gross return of approx. $65,000 that might mean a net profit of $15-25,000 on a good day. So the high six-figure flips we see being attempted here in Mammoth are a little out of the ordinary…..We did see a new condo listing this week that smells of “flip.” The sellers purchased it just 16 months ago for $297,000. It has been nicely remodeled with quality paint throughout, new countertops and appliances, updated bathrooms, modern vinyl flooring, flat panel TVs and chic decor, etc. List price is $389,000. We’ll see what it sells for. I think their gross and net profit will be very consistent with Realty Trac’s 2014 average. It may not be a deliberate flip. Based on location, my guess they are move-up sellers.
And for a laugh you can read one my latest columns on the latest rage in real estate; “testimonials.”
Not much to pick through. A flat lot within walking distance of Eagle Express finally closed for $150,000. This property had been on the market for most of last year. But why the cheap price? Probably because it is in the bend of the fairly busy Majestic Pines Drive and people are afraid of the “headlight effect.” But good design can probably overcome that problem. And streets usually open up nice view and sun corridors. It will be interesting to see what they build there.
A 4 bedroom / 3 bath REO townhome closed at Chateau Sans Nom for $329,000. This unit needed some love but really wasn’t in that bad of condition and had some nice (and expensive) upgrades built in. Somebody made a nice purchase.
A bluffs townhome at MeadowRidge closed for $645,000. The interior is upgraded and okay (the new owners will probably do a major remodel) but the view is panoramic and awesome. So more evidence that buyers will pay a ~$300,000 premium for a special view.
Other Real Estate News
The wars continue between Zillow and Realtor.com. and all of the other internet based real estate information sources. Zillow is doing everything to become an amazingly comprehensive resource. But they will need to survive the recent reports that viewership is declining. They will also need to become profitable. They’ve been chasing me hard the past few weeks to advertise; there is available “space” for Mammoth Lakes and they can’t fill it.
A recent article from Inman pointed to the 6 key shortcomings with online real estate information;
- The information can be flat-out inaccurate. All parties are advised to verify information with at least four sources before considering it reliable. This can be especially true when dealing with our beloved Mono County. The information is getting better but has a notorious past. Any County based information more than six years old is to be questioned.
- The data doesn’t always tell you what is “happening right now.” Basically, most online data is the past and market are always changing. Which is why a bi-weekly newsletter makes so much sense.
- Real estate data can be misleading. I can tell you first hand, the industry is famous for it. One of the worst is “median” anything. Median in Mammoth and Mono County doesn’t mean anything; it is a very small area with properties valued from very low to very high.
- The data can distract from other factors that are more important. Mammoth is famous for this one. An attractive lower price can stick a buyer with a lemon and they won’t know it until it is too late. Or a higher priced property could be a steal because of it’s intangibles.
- Real estate data can be overwhelming. So true. The second home seeking engineers often analyze properties so much they never buy anything…..And so many Mammoth purchases are founded on simple emotion.
- Data doesn’t matter very much to some buyers. Again, so true. In Mammoth, all it takes is that special view or setting and they will gladly overpay. Or some buyers chose certain properties to be near their favorite bar.
Happy Mother’s Day to all the mothers out here!
Thanks for reading!