Market Summary: June 7 – June 21
The Mammoth MLS is reporting 12 real estate closings in Mammoth Lakes for the two week period ranging from a low of $97,500 to a high of $1,125,000. That is up three (3) from the previous period, but two of the closing were adjacent lots that sold together. Of the 12 closings, 10 were technically financeable properties and six of the 10 were financed with new loans. There were no REO/bank owned property closing and no short sale closings reported.
At the period’s end the condominium inventory is up three to 192. There were 16 new condo listings in the period so there are actual new listings some that are expiring and coming back to the market. The number of condo listings under $200,000 remains stable at 25. Although we continue to see financed condo purchases, those loans maybe to tougher to get in the second half of the year. And properties with active “front desk” operations may become even more difficult to finance. As the summer condo inventory builds and asking prices soften a bit, the latter half of summer is the best time for condo shopping. The pre-winter push always comes even after drought winters.
Single Family Inventory
The inventory of single-family homes is up two (2) to 66. There is a trickle of new inventory but potential sellers don’t seem to be in a hurry. The solid interest in ~$1-2M homes still remains. We’ll see how long it lasts.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up three (3) to 43 at period’s end. Of the 43 properties in “pending,” three (3) are “contingent short sales” and 27 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 11 for the period at 70.
Market Updates and News
Summer has finally arrived in Mammoth. The weather has been sunny and warm the past week and a crowd has already appeared. We are now in the midst of Motocross week with the amateurs and oldtimers competing this weekend and the pros invading this next week. This is the traditional kick-off of summer. Then comes the Fourth of July crowd. But there already appears to be a non-motocross crowd in town. And the local merchants will certainly welcome all of the business. And the first wisps of forest fire related smoke have moved through town in the last few days.
The Ski Area recently gave a presentation to the Chamber of Commerce. The skier-days numbers for 2015 are pretty dismal but that was expected. Two years ago the number was 850,000. This year was 800,000. The peak was 2005-06 at 1.6 million. That was the second of back-to-back big snow years and a very strong economy. Nationally, the peak of skiers visits was 60 million and last year was 53.6 million. But the snow wasn’t that great in other popular areas like the Rockies and Utah. Basically, skiers and snowboarders are drawn to good snow conditions.
Meanwhile, the Ski Area is still complaining about servicing so much debt (on their underwater property) but “MMSA continues to turn a profit.” The debt is almost 10 years old which is an eternity in the commercial world…..They are looking at other summer revenue centers, mainly potential zip lines from the top of the mountain or the top of Chair 3. And their “highest priority” is the improvements at the base of Eagle, but they have been saying that for 15 years.
The Town Council continues to toil over the affordable housing mitigations fees. Somehow everyone thinks the housing fees are what is holding back major real estate development in Mammoth. By reducing or eliminating them we “can incentivize development.” But reality is the fees will be waived for any serious developer. The cost of development is simply too high. The cost of building six to 10 story buildings in Mammoth is exorbitant. And the buyer demand isn’t high enough even though we’ve made a little progress (with the condo hotel properties) in the past 18 months.
To make sense of development there has to be demand and profit. Today’s hottest segment of the Mammoth real estate market are the new homes John Hooper is building on the Sierra Star golf course. Hooper has been bulding homes in Mammoth for 40 years. He is building in the demand “sweet spot” of the Mammoth market; quality residential properties in the $1-1.5M range. He is also utilizing his vast experience in managing costs; acquiring land at good prices, keeping design and building costs under control while producing a quality product, and employing a skilled but motivated labor force. He is also taking advantage of the cheap cost of money. And his marketing expenses are low. He is also moving quick. All of this allows for some profit. Building a Westin Monache type property is far more complicated.
Southern California Edison will soon bury a string of high profile utility lines on the upper end of Main Street. This is a major coup pulled off by the Town and the local neighbors. SCE has always said that burying these lines was cost prohibitive. But things have changed. Maybe the maintenance of these exposed lines in this environment has become a new reality? Or maybe the “alleged” cause of the Swall Meadows fire being downed power lines? Regardless, this will clean up a massive set of power lines in the heart of Mammoth. And maybe this is just the beginning of burying other major power lines still above ground in our community. Let’s hope so….and speaking of that part of town, the old and abandoned White Stag and Ullr lodges at the corner of Main and Minaret are now small piles of rubble and should be completely gone in the next two weeks. Now, if we can get a few more of the old junkers demolished….
But with summer tourism kicking into gear, maybe the real estate sales activity will follow….
Two of the sales during the period were Bigwood condos, both 1 bedroom + loft / 2 baths with 1-car garage spaces. Both were clean units and both sold in the ~$235,000 range. This is a ~$50,000 increase for similar units in the past 18 to 24 months. This is so far beyond the price performance of the balance of the condo market (or any other part of the market). It is almost unexplainable. These are units of good utility and the garage space is a bonus, but these have not historically been considered the “prime” units of the older (~1970) condos. The location is not considered “convenient” because there is no direct shuttle service and you have to get in your car to go anywhere. The HOA is special assessing for new roofs, new siding and new plumbing. Special assessments have killed values at other condo projects. We’ll see if this trend continues.
The sale of two adjacent lots each for $97,500. These lots were originally listed for $149,000 each. While the location is relatively close to the Village and some good sun exposure can be utilized, the only advantage here is to build a really large home. The neighborhood is rather mediocre and the one lot backs to a busy street. For building a nice home there are far better lots to be bought in the $200,000 range.
The high sale of the period was in fact a John Hooper built home in Graystone. This was one of the smaller floor plans and closed at $1,125,000. These can be legally rented on a nightly basis and this one is super close to the Sierra Star clubhouse.
A small duplex in Old Mammoth sold for $370,000. These older duplex properties continue to be hot sellers. They don’t make great “investment” sense but with garages and plenty of flexibility they sure are popular. They were dogs for decades, but not anymore.
Other Real Estate News
During the period I had great trip back east and got to tour Washington DC, Virginia and Maryland. There are some great bike paths in the area and the bikeshare program in DC is a blast. One day we traveled to Ocean City, Maryland by traversing the Chesapeake Bay and out to the eastern shore of the Atlantic Ocean. Ocean City is a popular resort area and vacation spot for many residents of the DC and Baltimore area. It is about a four hour drive and the road is somewhat similar to driving from LA to Mammoth.
Ocean City is a narrow stretch of land only a few hundred yards wide and several miles long. It has a beautiful beach. The boardwalk is about three miles long and is a classic Atlantic coast type boardwalk with all sorts of old-time amusement rides and games and odd-ball shops and plenty of ice cream stands. I’m told it gets intensely packed in the busy periods of summer. It is top-notch people watching. The marina base in Ocean City plays host to the biggest saltwater fishing tournament in the world (sorry Cabo San Lucas).
The new and recent development in Ocean City is impressive. And the “mix” is classic resort; true hotels, condos, condo hotels, fractional properties, timeshare, etc. Some of the newest structures are up to 20 stories. If Mammoth was totally built-out including the Village, Lodestar, Snowcreek, the Main Lodge, etc. I’m guessing it would rival the size of Ocean City for development, bed base and visitor numbers.
On the trip back we stopped for gas and I walked over to an adjacent open produce stand. I got talking to the vendor while I purchased some Georgia peaches from him. He was a second generation farmer in the area. He asked if we had been to Ocean City and I told him yes and it was pretty impressive. He said he spent plenty of fun times there as a youth but today it is “way overbuilt” and “isn’t what it used to be.” He said he wouldn’t walk on the boardwalk at night anymore because it is “too dangerous.” He was clearly disenchanted with all of the development at the resort community and the impact that it had….
For the past 3+ decades I’ve never thought twice about walking around Mammoth at night (the stars make it especially great). I hope I never have to consider it “too dangerous.”
Thanks for reading!