Market Summary: November 22 – December 6
The Mammoth MLS is reporting 11 real estate closings in Mammoth Lakes for the two week period ranging from a low of $95,000 to a high of $1,700,000. That is down 9 sales from the previous period. Of the 11 closings, 10 were financeable properties and six were financed. The sales were a classic mix of what the market has been in 2015; six (6) of the 11 sales were condos selling under $350,000 and two homes selling for $1M plus (both cash sales). 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 11 to 124. The condo inventory is down 41% since Labor Day. There were six new condo listings in the period including two at Aspen Creek. There seems to be a quiet rush to the exits at Aspen Creek. Most of the Mammoth condo market remains healthy. My Real Estate Q & A that focused on the current condo trends appeared in the Thanksgiving weekend issue of The Sheet. Condo remodeling is the hot trend and with that trend buyers need to understand the real estate concept of “curable and incurable defects.” It always amazes me how so many agents and the customers don’t grasp the concept.
Single Family Inventory
The inventory of single-family homes is up seven (7) to 52. Unsold homes this time of the year often come off the market; some are rented to seasonal renters and some are simply on- hold until spring.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up 10 to 55 at period’s end. Of the 55 properties in “pending,” one (1) is a “contingent short sale” and 36 are in “back-up” status. Six (6) of the “pending” properties are homes under construction in Gray Bear. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up six (6) for the period to 83.
Market Updates and News
The Mammoth real estate market has ebbed and flowed the past two months. The early (and good) snow has helped get many buyers off the fence. The sales numbers would indicate that the past holiday weekend (and hence people in town) generated new sales. The market usually goes into some form of holiday hibernation about this time. But there are still plenty of buyers poking around.
The Thanksgiving period brought some snow and very cold temperatures. And a sizable crowd. The snow freshened the Ski Area but more snow is needed. One report said we were at 79% of normal for this time of year. The Ski Area reported they had 30,000 skiers for the Thanksgiving weekend. I can attest there were plenty of skiers on the Mountain the days before Thanksgiving too. But the nightmare was that all of those skiers were accessing the Mountain from the Main Lodge and Chair 2 (Stump Alley Express). And it created a massive traffic jam at the Main Lodge. Some people waited an hour plus for the downhill shuttle ride.
The Skiing Is Very Fun, But Much Needed Snow Coming!
The Ski Area did not open Canyon Lodge because the snow coverage “wasn’t adequate” in their eyes. But the other problem is simple economics. And many of the visitor related service businesses experience the same problem; Thanksgiving, no matter how good the snow is, is just a short blast of business with two very quiet periods on either end. It is a real quandary. Business has been dead for two months and will be dead for the next three weeks. The added expenditures for three days of good business is a tough call by business owners. Experience has taught most to just do with what you have and accept the consequences. Most of those skiers and snowboarders will be back, especially because they have season passes. And if they came this weekend, they had a good time.
November was full of public meetings by various commissions and committees to discuss the future of the ice rink, recreation facilities and special events facilities. I sat through so much of this 20 years ago and it all went nowhere. But now we have Measure U and Measure R taxation dollars to help pay for it. But the Town has more liabilities too. The recreation crowd thinks we can have it all, and right now. The accountants think we might be able to have something. There is a faction that seems to think it is more important to meet some contrived deadline (the Fall of 2017) than doing the right thing.
At present the process is mostly brainstorming and wishful thinking. The “best for the most amount of people” concept is dragging the community into seeing we need to nail down an “Events Site.” This is going to be driven by economics. The compelling force and example is Bluesapalooza. This event currently operates at the Woods Site on Minaret Road. But the site has long-term uncertainty and has been maxed out. The promoters are juggling all sorts of temporary facilities there. The event can attract increased investment and they know the event can be spread over two weeks in the summer and likely spurn other events through the balance of the year. It needs a long term solution.
A true “Events Site” could then spawn additional events. The bed tax and sales tax receipts show just how much cash flow these events bring to town. It is substantial. So from an economic standpoint, developing an Events Site is far more valuable than an skating facility. We’ll see where all of this goes. Meanwhile, the conceptual drawings for the Mammoth Creek Park West skating facility are expected by the end of the year so that public comments can begin in January and February. Based on presentations by the Town staff in the past month, the Town is acutely aware they need to mitigate a pile of concerns from the local neighbors and the community. In the end, the direction is likely to be determined more by dollars than desires.
On the lending front the local lenders appear to be successfully dealing with the new TILA RESPA requirements. These requirements, among other things, require lenders to precisely determine the costs loan related costs at the very beginning of the process. No more “estimates.” The buyers also get to review the final closing costs days before the actual scheduled closing. So far, the first two loans under this new regulation with the local Wells Fargo office took 28 and 35 days to close.
And Fannie Mae went back into dangerous territory this week with the announced HomeReady program. This now allows low and moderate income home purchasers and borrowers to include the income of other people planning on living in the house to help qualify for the loan even though they won’t ultimately be a borrower on the loan…..this could get real interesting. How many people can live in one house?
Not too much really noteworthy amongst the 11 sales. A couple of high-end home sales. A Lodges sale. And more condos.
The low sale of the period was a vacant lot on lower Forest Trail. There weren’t too many lot sales in 2015 and this is basically the bottom-of-the-barrell. But I did have a “up-call” on a vacant lot I have listed above the Village during the Thanksgiving weekend. In years past I could have been angered by the stupidity of this caller. But in my more mellow older age I just consider it entertainment.
The caller was berating the lot by comparing it to other lots in the Slopes neighborhood. It was clear he was shopping on price alone, which is about the most ignorant thing one can do when shopping for a building site in Mammoth. I asked him what exposure he would like his driveway and living room to have. He wasn’t sure. I asked him if he understood the cost of engineered retaining walls and oversized foundations in this environment. He wasn’t sure. I asked him if he wanted to look out his living room window and look at the back of condos. He wasn’t sure. But he was sure of what the lot was worth.
So purchasing the cheapest lot isn’t always the least expensive lot. Uphill lots are crap. The sun is everything. Economic regression is for real. And when the most basic home is going to cost a minimum of $600,000 plus permits, it is wise to spend a bit more for the land underneath to assure you start in the right place to begin with. But he may have to learn the hard way.
Other Real Estate News
And from the tax appeal success file; someone came in the office last week to thank me. They weren’t past clients but they had consulted with me on a property tax situation. I had told them to file an appeal (cost $17.70). They did and after some discussion with the Assessor they are now saving $100 per month on their tax bill.
Here’s the story. They built a new home in Mammoth and the property was appraised at the end of construction for the new loan. The Assessor’s office assessed the property $85,000 higher than that appraised value. So they engaged with the Assessor’s office and were given all of the normal gobbledegook as to why their assessed value should stand. That’s when they came to me and I told them to make a simple appeal.
Through the last 12 years of hearing property tax appeals for Mono County I have learned that an appeal reverses the “position of strength” in the process. Once the appeal is filed the Assessor has to do something other then stonewall. Until an appeal is filed they can just dance around the subject. But an appeal gives the property owner leverage. From there it is often just a negotiation. But don’t get greedy. In this case the loan appraisal was the perfect ammunition to get the assessed value lowered.
…..And for those who own vacation rental properties or are thinking about it I recently stumbled upon a great blog site that is an excellent resource; CottageBlogger.com has all sorts interesting articles, downloads and videos. The “Million Little Things” podcast alone had so many interesting insights; and I’ve been around this business for over 30 years.
Thanks for reading!