Mammoth Real Estate Sales Report November 8, 2015

Market Summary: October 25 – November 8

The Mammoth MLS is reporting 14 real estate closings in Mammoth Lakes for the two week period ranging from a low of $115,000 to a high of $1,203,000. Of the 14 closings, 11 were financeable properties and 10 were financed. Seems there is a trend away from so many cash purchases. Seven of the sales were condos under $310,000. There was one (1) REO/bank owned property closing (the high for the period) and no short sale closings reported.

Housing Inventory

At the period’s end the condominium inventory is down another eight (8) to 138. There were 14 new condo listings in the period BUT nine (9) of them have been on the market in the last year. Some have the same owner. There are a total of 14 condos listed under $200,000 so the low-end of the condo inventory is getting cleaned out as we head towards winter. The inventory of single-family homes is even at 55. But it isn’t the same 55.

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is only up one (1) 51 at period’s end. Of the 51 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 up nine (9) for the period to 83. Most of the increase is in Bishop.

Market Updates and News

This big news of the period is obviously the snow storm that provided enough snow for the Ski Area to open a week early on natural snow. There are a couple more smaller storms in the forecast. But this past weekend the weather was warm. The upper elevations of the Mountain should be able to hold the snow coverage. As would be expected, the opening of the ski runs has created a small bump in real estate activity. A few buyers have been pushed off the fence. For the Mammoth businesses that are currently open a small crowd of anxious skiers is certainly welcome. More businesses will likely open this coming week with the pre-scheduled opening of ski runs. All of this is good news.

Ski Area Opens a Week Early On Natural Snow…More Coming?

The Fall colors have been simply spectacular this year. Some aspens started turning as early as late August and it looked like it would be a disappointing season. Sometimes the leaves just turn and get dumped by rain or snow. Instead, this year’s colors stayed vibrant all way through last week’s snow storm. They resisted several rain storms in September and October. Some turned flaming orange and reds. The local photographers should be showing some of their amazing captures in the coming months. The Fall colors have become a positive tourist attraction during what is normally the slowest time of year for visitors.

Proposition F in San Francisco did not pass this last week. Approximately 55% of voters rejected the ballot measure. This might be construed as an opposite reaction to Mammoth’s Measure Z which passed a month ago. Interesting. Proposition F would have limited the number of nights a person can rent rooms on a Airbnb-type platform to 75 days a year. Airbnb purportedly spent $8 million to get the “No” vote out. In Airbnb’s post election statement that referred to the movement as “San Francisco’s home sharing community,” Obviously there is no “home sharing” movement in Mammoth Lakes. We’ll see what the future holds.

Along a related line, it was announced just a few days ago that Expedia was purchasing Homeaway for almost $4B. Homeaway operates VRBO and a multitude of related sites in numerous international marketplaces. It currently represents over 1 million individually owned properties that are available for vacation-type travelers. This will certainly broaden the reach for owners on their programs. Expedia is known for packaging all sorts of services to the traveler. Offering that to second homeowners could be compelling. Can’t wait to see what type of bonus or incentive packages they offer these owners (that is the trend). It might be something that forces another move by Airbnb. This industry is changing rapidly. I wonder what Mammoth will be voting on next….

With property tax bills delivered and due, I’ve been taking inquiries from those questioning their most recent assessment. Seems many owners have made cursory “review” requests of the Assessor but have been somewhat intimidated by their communication with the Assessor’s office. It is important to know what the likely comparable sales are for the period in question and whether an appeal is valid. Some I have seen certainly are.

But several owners have reported that they were told that “an appeal costs money” and it was implied that it was’t worth it. Well, an appeal costs less than $20 (for residential property) and keenly shifts the “burden of proof” onto the Assessor’s office. A formal appeal simply puts the property owner into the position of strength when negotiating an assessment. And yes, they often come down to a negotiation. Very few appeals even make it to a hearing. For one reason; they are rarely cost effective for the Assessor’s office. Appeals hearings are expensive for the County and they want to avoid them if possible. So when in doubt, appeal. It is a small price to pay for an option to negotiate. But don’t get greedy.

More ridiculousness; mortgage underwriters are demanding properties have conforming smoke and carbon monoxide detectors before approving the loan. All part of the new lending and appraisal guidelines, This has become a major hang-up on recent transactions. The appraiser has to return to the property and take additional photos of each detector. Prudent agents are simply going to have to get them installed at the time of a listing and avoid the future hassles.

I was on a recent “return” visit by an appraiser and he said to me “We’re so busy checking for things like smoke detectors and carbon monoxide detectors and all sorts of other stuff that we really don’t have time to consider the real value of the property.” That’s comforting.

Noteworthy Sales

The REO closing of 109 Starwood was the high sale of the period. But this ends a long and bizarre saga for this property (or we’ll see). It has been in-and-out of foreclosure proceedings since the late 2000’s. Anybody who spends any time in Mammoth probably recognizes this as big, exotic log cabin on Minaret Road across from the Bell Parcel. And most notably the logs were never fully treated so even though the structure has been there for years the logs still looked raw.

This was a owner/builder property; the log structure was set by the manufacturer and the owner was going to finish the project himself. The owner had some eclectic tastes to say the least. At one point the lender forced the owner to close-out the construction financing by getting a certificate of occupancy. But the home was never really finished. And once, and finally, foreclosure was eminent, the owner stripped out many of the interior improvements. In the end, there was supposedly someone living in the house (and expecting a Cash-For-Keys settlement from the lender).

But the whole time (years) the owner was seen doing various projects around the property, coming and going. Maybe now the project can be completed and the blight can be removed from the high-end neighborhood. I wish the new owner good luck.

​….The rest were pretty unexciting sales.

Other Real Estate News

On the foreclosure/REO/short sale front, a press release from CoreLogic just a few days ago announced that “Distressed Sales Share Lowest Since September 2007.” And one state (Maryland) represented 20% of all distressed sales in August 2015. So this cycle has run it’s course for now.

In Mammoth there are still some trickling through. Short sales have become rare. There are still a handful of REO properties out there; we currently have one on the market and one in pre-marketing phase. I’m aware of a couple more in process and there are a few new Trustee’s Sale notices in the local paper. But for now they are no longer influencing market values. And there are no “deals.”

One interesting tidbit; looks like one servicing company is now going to charge agents $300 to submit an offer on a bank owned property(REO). The charge will be made via credit card before the agent is even allowed to access the online portal to upload the offer. The simple reasoning for this charge is to eliminate low-ball or frivolous offers from agents. Apparently it has become out-of-hand and asset managers are tired of looking at all of the ridiculous offers. On the other hand, it may create an opportunity if a property sits long enough…

I have recently been asked to do some analysis on income and commercial properties here in Mammoth. I used to do plenty of this but I prefer to stick to residential and condominium properties. The people involved are much nicer. But after looking at the market closely I have a few take-aways; residential income properties are very healthy in Mammoth. For those who like rent multipliers, the multipliers are up. Conversely, those who like “cap rates” the rates are down and comparable to some amazingly low cap rates currently seen in Southern California. But they aren’t anywhere near where they were in 2005/06. The rents haven’t changed much in the last 10 years but the selling prices are in the ~60% range.

Meanwhile, commercial properties are hurting. Restaurant space could be the worst. Regular winter visitors will notice a few establishments that are simply gone. Retail space isn’t much better. I’m sure some haven’t paid rent in many many months. Office space may be even worse. The whole upper floor of the Mammoth Mall (Charthouse) is now being proposed as a residential condominium conversion. Other landlords are getting creative or finally making serious discounts. I’m sure glad I made my moves. Interesting times….

Pray for more snow!

Thanks for reading!

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