Market Summary: November 8 – November 22
The Mammoth MLS is reporting 20 real estate closings in Mammoth Lakes for the two week period ranging from a low of $120,000 to a high of $1,395,000. Of the 20 closings, 19 were financeable properties and 12 were financed. Staying true to the Mammoth market (especially this time of year), 13 of the sales were condos under $450,000. There were no REO/bank owned property closings and no short sale closings reported.
At the period’s end the condominium inventory is down another three (3) to 135. There were 15 new condo listings in the period; some are really new to the market and some are repeat offenders. There are now only 12 condos listed under $200,000 so the low-end of the condo inventory continues to be sold as we head towards winter. The early ski conditions have compelled some to need their “Mammoth crashpad.”
The Mammoth condo inventory was at 133 this time last year and that seemed high by my reporting. The “balloon” of condo inventory that we experienced at Labor Day (211 was the peak) is long gone. The best buys of the summer have been bought. Once again there are concentrations of inventory in certain projects including 1849, Aspen Creek and The Westin Monache. Mostly just coincidence. There are a total of 27 units listed in all of Snowcreek but that isn’t excessive. Interestingly, there are only five (5) units listed in all of the Village (Lincoln House, White Mountain Lodge and Grand Sierra Lodge).
Single Family Inventory
The inventory of single-family homes is up four (4) to 59. The change is really just the inclusion of new (and listed) offerings at Gray Bear Phase II. If these other homes aren’t sold by the end of the month, they will likely sit unsold through the winter. And many have tough competition against the Gray Bear properties. The only advantage is that they can used right away. More snow could push some buyers in that direction. This time last year there were 57 homes on the market (and some are the same).
The total number of properties in “pending” (under contract) in Mammoth Lakes is down six (6) to 45 at period’s end. Of the 45 properties in “pending,” two (2) are “contingent short sales” and 28 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down six (6) for the period to 77. This time last year it was 53 in Mammoth and 71 total.
Market Updates and News
After Mammoth Mountain’s early opening the ski runs received another shot of snow during the period and the conditions are very nice for early season. The most popular main runs off of Chairs 1, 2 and 3 are nearly obstacle free. Runs off of Chairs 12, 5 and 10 are in good shape too. They worked to get Chairs 13 and 14 open this weekend. The face runs need more snow but they have already groomed the face of 3 and Cornice. The last storm scoured the top but the crews recently pushed a snow path into Scotty’s for good access to the adequate coverage in those bowls. So the Thanksgiving crowd won’t be able to complain. I hope they ski a little and get excited about buying some real estate.
This past week I rode Chair 2 with a couple of young snowboarders (they were ignoring me) and one of them said “they sure dress differently on the Mountain here in Mammoth than they do in Big Bear.” (Does that mean no gangster-wear?) I also rode Chair 1 with one of the Lift Operations managers and he said a bunch of Mammoth’s crew went down to Big Bear this last week to give some seminars. It will be interesting to see the influences the two ski areas have on each other. I doubt I’m going to change what I wear……
Cold AND Snowy Forecasted For Thanksgiving Weekend!!
The Thanksgiving week is forecasted for cold and some developing storms. The snow that is up there certainly won’t melt. Another couple of feet would be nice. But this is not El Nino yet. That is forecasted for January and beyond. But this is a good start. Mammoth did enjoy nice warm weather this weekend. That is going to change.
The Mammoth Town Council has already started tweaking the Quality of Life Ordinance with refinements. Last week they changed the “signage” requirements for condominiums. We could see this coming. If for nothing else the HOAs don’t want the clutter/signage pollution. And the condos already have management contacts displayed.
But they are also attacking illegal lofts and redlining them from rentable space. This is similar to what happened in the 1980’s when the local fire department shut down these types of lofts. Basically, a loft has to have two points of ingress/egress; stairs and a window in case of fire. There were some condo floorplans built in Mammoth in the 1960s and 70s that didn’t include the window. These were subsequently shut down and deemed “storage lofts.” But some aggressive owners have re-established them as sleeping areas. And some owners are disagreeing with the prohibition. (See my discussion below about Airbnb and safety.) Good luck arguing with the fire department.
According to CoreLogic, cash sales accounted for 31% of sales nationally in July of 2015 which is down from nearly 35% in July of 2014. This is now the lowest level in nine years. (Nine years ago was 2006, or the peak of the last cycle.) We have seen a similar trend here in Mammoth. In July of 2015 cash sales nationally represented 56% of bank owned (REO) property purchases.
Speaking of REOs, we may see a small trend in banks accepting deed-in-lieu of foreclosures. Many underwater Mammoth owners have tried in the past few years with little success. But that could change. And the word is that some of the loan modifications of the 2009-11 timeframe are now back in default.
I recently sold a condo to a retired geology professor from Penn State who has studied the Mammoth region extensively. He has told me some interesting things I have never heard before. The other day I was helping him move a chair and he told me that there is metamorphic rock at the base of Bloody Mountain that contains fossils and those fossils date back 400 millions years!!
Two condo sales, one at Horizons Four and one at Chateau Sierra, are proof that older condos that are significantly remodeled can achieve very high selling prices. Even more important; both purchases were financed so the appraisers likely went along with the values. This continues to be good news for condo owners who are dumping large amounts of money into older condos; at least they have a good chance of getting it out if they have to. But true “flipping” is still a dicey proposition in the Mammoth market. There are many variables. But these recent sales prove the old adage that some buyers in Mammoth “have more money than time.”
The ~$600k home inventory has been seriously depleted in the past three months. Many of the homes that buyers rejected during the spring and summer have now recently closed escrow. But two sales in the period have indicated a new trend. These two residential sales occurred in the old Sierra Vista Estates neighborhood. This is often referred to as the area “behind the Post Office.” These lots were subdivided in the late 1950’s and early 60’s. They are significantly smaller lots relative to town. The vision then was to accommodate small A-frame and other “kit” homes (many are still there). Like much of Mammoth, owners today want to max-out their lots.
Today there is serious crowding in these neighborhoods. And a real variety of old and new, big and small. There are also unsightly power lines. But the area has not supported values equal to other popular (and larger lots) neighborhoods in the past. These two recent sales of older and remodeled homes at this new level is a reach. If these values hold, a lot of long-time local residents may become sellers.
The high sale of the period was down on Shadow St. in Old Mammoth. This is a super nice home on a creekside location. But this is an area of narrow streets and up until recently they were dirt. This neighborhood was subdivided in the 1920’s. When I moved to town some 34 years ago I had a friend who lived in a cabin right there. They didn’t plow the roads down there back then. He had to snowshoe down from Old Mammoth Road. They called the area “Moleville” back then. I hope these new owners like being buried in snow, and mosquitos.
Other Real Estate News
I can’t leave the Airbnb story alone. There are so many compelling facets from a business standpoint. And they will affect Mammoth’s way of doing business seemingly forever. They are disrupting the entire hotel, lodging and resort business world. Just a few days ago they raised another $100 million dollars of funding. Raising money appears to be getting tougher for them. But they do expect to be profitable in 2016.
Meanwhile, one of the biggest concerns (and especially being pointed out by the hotel industry) is the (lack of) safety regulation and standards in these Airbnb rentals. The illegal lofts in Mammoth are just an example. There is good reason they are “storage lofts.”
There is a recent news story circulating about an Airbnb renter sitting down on a rope swing suspended from a tree. The tree limb broke and fell on the man. The impact eventually killed the man…. And “unlike hotels…Airbnb rentals aren’t required to be inspected or even maintain things like cleanliness.”
Further, “Airbnb has no control over the conduct of the hosts and disclaims liability.” The liability is offloaded to the hosts. Regardless, Airbnb is taking this seriously. They are now counseling their hosts on liability concerns and “hostility standards”…..
Other related tidbits; Wall St. announce this past week that Marriott is buying Starwood Hotels. This will be conglomeration of major hotel brands. Among other things, Marriott will eventually own the Westin brand. And we’ll see what happens to the Starwood Preferred Guest Program.
And the business news has been full of Starwood Capital’s acquisitions of major blocks of apartment properties throughout the country. Mammoth Mountain’s owner may end up being the largest owner of apartments in the country. Of course, they also getting some very attractive loan guarantees from the federal government. It would be nice if they brought some of that love to Mammoth….
Thanks for reading!