Market Summary: March 13 – March 27
The Mammoth MLS is reporting 14 real estate closings in Mammoth Lakes for the two week period ranging from a low of $139,000 to a high of $2,050,000. Of the 14 closings, nine (9) were financeable properties and five (5) of the nine were financed. There was one REO/bank owned closings and no short sale closings reported. The mix of closings was familiar; eight (8) of the 14 closings were condos under $305,000 and a high-end luxury home. Another vacant residential lot closed. This period last years there were 16 closings.
At the period’s end the condominium inventory is up two (2) to 159. There were 13 new condo listings for the period including three new ones at Grand Sierra Lodge. This time last year there were 164 condos on the market.
Single Family Inventory
The inventory of single-family homes is up one (1) to 59. The low-end inventory is selling. This time last year there were only 53 homes on the market.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up two (2) to 59 at period’s end. Of the 59 properties in “pending,” there are no “contingent short sale” and 34 are in “back-up” status. This time last year there were only 52 properties in escrow including nine (9) short sales. That is telling. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 12 for the period to 91. Last year that number was 69.
Market Updates and News
Summer-like weather returned for most of the period as the spring breakers moved in. The ski conditions remain very good. This Easter weekend was unusually busy and no doubt the beautiful weather was the draw. As the snow recedes many of the condo projects are already getting raked out. I’d prefer the ground crews were shoveling snow, but so be it. We do love summer.
Packed Easter Weekend and Cheap Ski Passes For Everyone!!
The Ski Area ended up offering $699 ski passes for 2016-17 season if previous pass holders purchased in the three day span of March 21-23. It was a last minute announcement and most were notified by a postcard in the mail. The Mountain acts more amateurish as time goes on. Many asked; why the need for a hasty 72-hour “sale?” But since “servicing debt” is the pre-occupation of the Ski Areas administration one can only assume that there is a large end-of-the-quarter interest payment due.
I reviewed my own confusion and mis-interpretation of the 2016-17 pass pricing and in my notes I have a perfect screen shot of the “Premium Pass” page (I’ve been dreaming of a ski vacation) and it is explicit what the ’16-’17 pass price is/was. It wasn’t the 72-hour price or the current price. I’ve concluded it was either some deliberate confusion or sloppy web page building. And I wasn’t the only one mis-interpreting the information.
But some of the reactions I experienced were fascinating!
- The economic “elasticity of demand” is apparently alive and well with Mammoth Mountain ski passes. At $999 a very significant number of previous pass holders expressed they would “pass.” But at $699 they were eager to purchase. We now know what the upper threshold of season pass pricing is. The nebulous price plan and confusion could have been a perfect test to see what the market would bear. It won’t bear $999.
- Nobody I communicated with cares one-bit about the opportunity to ski at the Big Bear resorts. And that adds no value to the pass. But as I pointed out in an associated blog post, Vail Resorts sees “feeder” ski areas in close proximity to major metropolitan areas as the future to grow the season pass numbers. They can tout the benefits of the Big Bear experience, but they are simply feeder resorts to hopefully cultivate more pass sales in the future. And emulate the Vail Resorts strategy.
- Many Mammoth pass holders did respond that they would gladly pay $1,000 for a pass that would include Mammoth and the Vail Epic Pass resorts. That might be the best news. That trend could add real value to the Mammoth enterprise. I hope I live long enough to see it to fruition.
- Some pass holders chastised my math; they clearly see the “resort credits” of the past two drought seasons as having 100% cash value. Ridiculous. Next they’ll be rationalizing that if they purchase $4,700 worth of the 15% Bonus PassCash (good through April 5) that they got their ski pass for free. Smart move for some.
- Many pass holders are looking at the Ski Area with a new level of distrust based on Rusty Gregory’s comments that he will close the Sierra Star golf course because it is not profitable. And the lack of transparency on the ski pass pricing and the 72-hour sale made it all appear “like a Sham-Wow infomercial.”….I also have a screen shot in my notes of Vail Resorts’ pass programs; one page with all four pass offerings clearly spelled out and nothing to be confused about. Maybe the transparency is why they have 500,000 Epic Pass holders. I’m glad Mammoth’s lift maintenance, grooming and Ski Patrol aren’t run this way; they are the saving grace.
Why is any of this important to the Mammoth real estate market? When the Mammoth Value Pass was introduced over a decade ago it changed the demand dynamics for local real estate. Especially in the low-end of the market in what I subsequently dubbed “crashpads.” It still drives strong demand for these affordable properties. Quite frankly it has created price stability in this segment of the market. Without this demand most of the condo projects with small affordable condos would be full of long-term rental housing. The overall quality and value of the projects would likely be very different. And there is no doubt the Pass program has helped generate demand in all segments of the Mammoth real estate market.
The Value Pass program has had many other impacts. It has created seasonal rental demand that has helped maintain long- term rent stability, even through economic downturns and drought winters. The program has increased transient rental demand which in turn generates more bed tax for the Town. And the underlying premise of the Value Pass is that the consumer will have more discretionary dollars to spend on goods and services. Every Mammoth Lakes retailer and food/bar establishment benefits from that. This was all part of the Intrawest business philosophy to raise the gross daily revenue per skier day. They often referred to it as “creating a third spending cycle.” It has been very successful for the industry and it flows though the associated communities.
The sales for the period were pretty ordinary in light of everything that else that happened. Lots of “bread and butter” real estate transactions; a couple of Westin Studio units, a 1-bedroom at Juniper Springs Lodge, a Studio at Mountain Shadows, a 1 bedroom at Viewpoint, etc.
A small (and very dated) “A” frame home above the Village closed at $465,000. A nice 3 bedroom / 3 bath townhome in Snowcreek Phase 5 sold for $630,000. Another nice Slopes home closed for $865,000.
A lovely residential lot overlooking the Creek sold for $349,000. There is finally some movement in vacant land. And the high sale of the period was a home in the Bluffs with an outrageous view of Mammoth Mountain.
Other Real Estate News
Plenty of other interesting things going on; the new Tesla charging station across from the Charthouse catches my attention as I drive by. Last weekend there were actually three Teslas in there charging at the same time. Amazing.
I had lunch last week with one of the biggest and most experienced sporting goods retailers in Mammoth and he reported that sales this winter have “far exceeded” any expectation and that there was obvious “pent-up demand” especially for hardgoods.
Local contractors have confirmed that Creekhouse (Snowcreek Phase 7) will construct four of their fourplex building this summer. Apparently all of them will be in the location overlooking Mammoth Creek. No official announcement or pricing from the developer yet.
The Marriott acquisition/merger with Starwood Hotels has been thwarted by an overbid by a Chinese conglomerate. Starwood (Westin) may end up being owned by the Chinese. This could put Mammoth on the Chinese radar in the future. We’ll see.
The Expedia acquisition of HomeAway/VRBO has brought additional expenses for both owners and renters, and both are upset over the arrangement. Owners especially are scrambling for alternatives. This will likely change the industry again. We’ll be watching this one unfold. Prudent owners who don’t already have individual websites for their rental properties should be moving in that direction. That’s where I would start. And I would want “Mammoth” in the URL…..
Happy Easter to all!!
Thanks for reading!