Market Summary: September 13 – September 27
The Mammoth MLS is reporting 16 real estate closings in Mammoth Lakes for the two week period ranging from a low of $150,000 to a high of $725,000. Of the 16 closings, 15 were financeable properties and 10 were in fact financed, one with owner financing. Surprisingly, there were no residential sales over $1M. There were no REO/bank owned property closings and no short sale closings reported. Of the 16 closings, eight (8) were condos selling under $415,000. This newsletter reported 19 closings for the same period last year.
At the period’s end the condominium inventory is down another 16 to 172. There were only four (4) new condo listings in the period. So the Mammoth condo inventory is down 15% in the past month. The best condo properties are selling. But I really think many potential buyers are sitting on the fence to see if it snows. When it does snow the best buys are likely to be gone and there could be a rush to the market. The rush will likely include the buyers who think they can close before the holidays. I’m hoping it happens (at least the snow part). This time last year there were 133 condos on the Mammoth market.
Single Family Inventory
The inventory of single-family homes is down one (1) to 70. The good homes in the ~$600,000 price range are getting cleaned out but there are still some lingering ones that might be attractive when it snows. There is very little to choose from below that price range and even less that could be considered worthwhile. There were 60 homes on the market this time last year.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down one (1) to 54 at period’s end. Again, this time of year it is normally increasing. Of the 54 properties in “pending,” three (3) are “contingent short sales” and 36 are in “back-up” status. The total number of pending in the aggregate Mammoth MLS (which includes outlying areas) is up three (3) for the period to 71.
Market Updates and News
The last two weeks have been wonderfully warm and clear. Mammoth has thankfully been spared most of the residual smoke from the Rough Fire the last two weeks. Bishop and the Owens Valley haven’t been as lucky. Some people who were sensitive to the smoke simply had to leave the area. Last weekend was absent any special events and the town was dead quiet. This weekend was the Kamikazee Games at Mammoth Mountain and that brought a decent crowd. The Fall colors are hit and miss; some have changed and some haven’t.
Measure Z…..Maybe “No” Can Win?
The Measure Z referendum is less than 10 days away and the local residents for and against have emphatically worked their positions. A well executed public forum was held by the Mammoth Lakes Board of Realtors last week and it ran on the local television station for several days. Everyone behaved themselves. The Chamber of Commerce will conduct another forum this Tuesday. And the Vote No organization is having free Brats and Brews at Mammoth Brewing on Wednesday. Their slogan is “Z has Zero Solutions.”
Quite frankly, I don’t think any real “new information” has been brought forward since my Real Estate Q & A column that ran Labor Day weekend in The Sheet and was previously posted on my blog. But there has been good discussion and the public is beginning to understand what this is all about. The division between the “old guard” of Mammoth and the younger business people in Mammoth that I mentioned in my last newsletter only appears to be more profound. The “free brews and brats” event at Mammoth Brewing is pretty evident of that; younger owners and a younger clientele. But they may be too late to rally enough registered voters to make a difference.
The younger generation certainly understands the dynamics of the sharing economy and the impacts of web based services like VRBO and Airbnb. The old guard is desperately holding onto their castles and moats and hoping the zoning laws (and the Town) will protect them. Maybe they should talk to the owners of once valuable taxi medallions in New York City. Demand and convenience will likely infiltrate their neighborhoods regardless of the Measure Z outcome or Town ordinances or even enforceable CC&Rs. The question will ultimately be do they want it properly regulated or not?
And speaking of regulation, the Mammoth Town Council did pass the new Quality of Life Ordinance and it becomes law on October 16. The two local newspapers basically failed to cover the story, even in the midst of the Measure Z debate. So anybody and everybody who is doing transient (nightly) rentals has a whole new set of regulations to follow. How the Town intends to roll this out by the holidays is yet to be seen. And how it will be enforced is yet another unknown. Let’s just hope there is plenty of snow for the holidays. The rest can get sorted out in time…
The Town Council recently approved a minor lease at the Old Mammoth Road Park ‘N Ride lot for a Tesla Supercharger Station. The parking lot is highly underutilized and the location across from the Charthouse will allow Tesla owners to hook up for a charge and stroll around to the adjacent shops and restaurants. The Mammoth charging station will certainly compliment the Tesla stations that already exist on the south end of Hwy. 395. Points north of Mammoth are rapidly becoming “Tesla Country” with their massive battery factory under construction outside of Reno. This is a perfect way to get the random highway travelers to pull into Mammoth and take a look around.
On the real estate front, Mammoth is seeing an interesting number of “move-up” sellers/buyers in the market. Many recent transactions have involved contingencies reflecting sellers who are moving to larger or more luxurious properties……And two local condo projects with recent lending problems are now open to conventional financing. The Summit has finally resolved the longstanding remodel litigation and is now lendable. And Horizons Four no longer has an onsite “front desk” operation and will no longer be redlined by Fannie Mae.
The Digital 395 folks made a presentation the local Realtors this past week and report that progress continues on bringing higher and more dependable Internet speeds to Mammoth and to bring dependable service to many outlying and remote areas of Mono County. Apparently the recent Bluesapalooza weekend was good test for the maximum demand scenario that accompanies big winter weekends here in Mammoth. Meanwhile, they report that minimum speeds of 50 Mbps will be a reality in Mammoth soon.
Two low-end homes sold during the period once again proving buyers are willing to pay ridiculous prices for entry level homes regardless of their deficiencies. The one on Canyon Blvd. sold for $425,000 and been on the market 409 days….this time around. It has been on-and-off the market for years and has had a variety of tenants. A couple of flights of stairs up to the front door. Needs a complete redo. And the one on Larkspur Lane here in Mammoth came to the market and sold quickly. But it has been on the market numerous times in the past and the market has resisted. It too will need plenty of $$$.
Realistically, when you consider the acquisition cost and the remodel cost, for another $1,000 per month you can buy a good lot and build a 2,000 square foot home. And you would end up with modern and efficient home with a garage and excellent resale potential. Instead, these new owners just put good money after bad.
An older home with garage on Lee Road closed for $620,000. The only redeeming quality of the home is the zoning which allows for transient/nightly rentals. If that is not the goal, than somebody chose poorly.
A Fairway Ranch lot sold for $300,000…cheap. Still some good lot values around for those who want to build in the future.
The rest are condo sales with values up at Chamonix, Sierra Megeve, La Vista Blanc, and Helios. The once coveted Snowcreek Phase 4 townhomes are flat with a very nice unit going out at $725,000.
Other Real Estate News
A very recent Fortune Magazine article (online) announced a merger between two large residential real estate investment funds. The funds are owned by two well known real estate investors; Barry Sternlicht (Starwood Capital, owner of Mammoth Mountain) and Tom Barrack. They are merging the funds because “neither has the “scale” to make them profitable.”
Just a few years ago this was one of the hottest trends on Wall St.; snapping up huge amounts of foreclosed homes and converting them to long-term rentals. It was obvious to many in the real estate business that these people had never managed rental homes spread out all over the place, and the problems that would come with it. This was unlike a large apartment project with all of the units in concentration and central management.
So now these funds, Sternlicht’s Starwood Waypoint Residential Trust and Barrack’s Colony American Homes are merging at a value that is approx. 50% of what they paid for the ~18,000 homes. The Fortune article points out that the current cash flow return for the funds is a meager 3% and may decline as rents may be at a peak and apartment construction is booming.
The article suggests that it will be tough for Wall St. investors to get their money out of this residential real estate. A similar fund owned by Blackstone is proposing an IPO to dump theirs onto new stockholders. The article concludes with, “As anyone who has bought a fixer-upper knows, getting in is a lot easier than getting out.”
There are a few of those in the Mammoth inventory too…..
Thanks for reading!