Market Summary: July 3 – July 17
The Mammoth MLS is reporting just nine (9) real estate closings in Mammoth Lakes for the period ranging from a low of $185,000 to a high of $550,000. Of the nine closings, eight (8) were financeable properties and five (5) were conventionally financed. There was one REO closing sold through an auction website. Five of the closings were condos selling less than $225,000.
At the period’s end the condominium inventory is down four (4) to 170. So it looks like the Mammoth condo inventory could remain on the low side for the late summer/fall selling season. We’re only 45 days away from the typical peak of condo inventory. Most sellers who are contemplating selling in 2016 should be on the market by now. This time last year there were 213 condos on the market. Two years ago only 134.
Single Family Inventory
The inventory of single-family homes is up seven (7) to 73. There are now 17 homes listed under $600,000 but only two under $500,000. There are also some interesting new listings in the low $600,000 range. And some I don’t recall ever seeing on the market before. This time last year there were 72 homes on the market.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up 11 to 57 at period’s end. Of the 57 properties in “pending,” there are two (2) “contingent short sale” properties and 34 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 18 for the period to 100. Clearly the summer selling season is beginning.
Market Updates and News
Mammoth has experienced near perfect weather the past two weeks outside of some wind episodes and a bit of smoke from distant wildfires. The popular Fourth of July parade was perhaps the biggest and best ever and heavily attended despite the holiday falling on a Monday and many visitors were thinking of heading home. Clearly, the funding and organization of Mammoth Lakes Tourism has something to do with it.
Mountainbike Races, Food and Wine, and Softball….Summer rolls on!
This past weekend hosted the National Mountainbike Championships, the Mammoth Lakes Foundation popular Food & Wine event, and there was even a small softball tournament. Everybody seemed to be having a great time. Next weekend is the Reggae Festival and the Fireman’s Picnic and Canoe Races. And the lakes in the Lakes Basin are nice and full.
The recent collapse of the yield on 10-year treasuries has the quoted interest rate on 30-year mortgages at less than 3.5%. I’m sure some of the recent cash buyers are, or are thinking about, placing some financing on their properties. With most of the Mammoth real estate market selling at between 60 and 70 percent of the 2000s peak values, Mammoth real estate remains a good value. Properties like this are selling far below replacement value. As long as this trend continues there will certainly be no new condo-hotel type development. The proposed new units at Creekhouse (Snowcreek Phase 7) were postponed. Only John Hooper’s 40 years of Mammoth construction management experience is creating anything economically viable at Gray Bear. And his product is in the “sweet spot” of the Mammoth market the past 24 months; single family homes priced between $1M and $1.5M.
In the past two weeks we have seen some “weird” properties selling this time of year; properties around Canyon Lodge and others with winter orientation. This is normally the time of year that the Snowcreek units sell.
A recent study and article on Realtor.com noted that home values are consistently higher within close proximity of outdoor music venues. Homes near the Greek Theatre in Los Angeles and other such amphitheaters where there is “walkability” to these venues and the adjacent restaurants and shopping have statistically higher values than similar homes within the same zip code. The study says this is an increasingly important feature especially with Millennials.
So this might be something to watch as Mammoth Lakes attempts to establish a permanent venue for outdoor events. But ironically, I have two clients who own in the same project adjacent to the Woods Site (Bluesapalooza, etc.). One hates the music events and the commotion they bring. The other was attracted to the location for the proximity to the events.
In Mammoth I find buyers are looking for one or the other. Many want to be near the action. That continues to be proven as values on periphery of the Village remain healthy. But just as many buyers don’t want anything to do with that. They want to come to Mammoth for peace and quiet, and most want a view. The excellent shuttle lines in Mammoth can help many find a compromise. Properties that meet all of those attributes are rare but they do exist.
…The listing of an individual garage in Snowcreek II brought out some comments and questions. These garages are rare and coveted and they are often conveyed with an actual Snowcreek unit. To purchase one the buyer has to be an owner in the specific Snowcreek phase/HOA. I currently have one in escrow that is being sold with a townhome. I have only sold one other Snowcreek garage in my entire career.
Garages have always been valuable in Mammoth. The combination of snow in winter and the desire for toys makes them more valuable. Almost all of the 1970s built condos don’t have garages and most have very little storage at all. The Town changed the zoning codes in the early 1990s and all new condos are required to have a garage or covered parking. Only “deed restricted” units can escape the requirement.
Other garage insights; For many buyers a garage is a “deal breaker.” They simply won’t purchase if there is no garage. Some potential buyers never buy because they can’t afford or don’t like the units that do have garages…..One of my former associates who is a long-time Mammoth resident recently built his “retirement” home in Mammoth. It is a 1600 square foot home with a 1600 square foot garage. That could be the perfect Mammoth home…..And most of the hangars you see down at Mammoth Airport have never had an airplane in them. They were originally marketed as “toy boxes in paradise.” They are chocked full of boats, motorhomes, ATVs, and everything else.
The much feared VONS strike has yet to come about. I spoke with one assistant manager and he said “the last time it took 8 months to settle and we never went on strike.” He didn’t seem too concerned. Meanwhile, from my desk I have recently seen several VONS tractor-trailer rigs that were obviously lost–they simply didn’t know where the store is. Strange.
More low end condo sales. My first broker always referred to them as “the bread and butter” of Mammoth real estate. Affordable crashpads is what they are. And in the age of Airbnb that can make crashpads and nightly rentals.
One of the original “spec” homes in the Mammoth Slopes (between the Village and Canyon Lodge) that had been basically abandoned for many years sold for $255,000. That is a little more than land and permit value. I’m sure the neighbors look forward to seeing this blighted property brought back to life. Now if we could just get a few more blighted (and very visible) properties around town hauled to the dump.
An REO home sold for $529,000 through the online auction process. I am aware of another REO home in escrow via online auction. And we listed two new REOs this past period, one in Mammoth and one in Bishop. The last of the distressed properties are making their way through the pipeline.
Other Real Estate News
Back in the 1980s I was attracted to commercial real estate. I like real estate and I like business so the two are an intriguing marriage. But I soon learned that there wasn’t enough business in the Eastern Sierra to warrant specializing in it. I’ve done my share of commercial-type transactions but I really prefer working in the resort and residential side. The people involved are usually much nicer. And there are far fewer attorneys engaged. But ultimately I am always watching the commercial market.
There are commercial properties in Mammoth that have been on the market forever. The key to most of them not selling is that they do not have viable tenants. Some don’t have tenants at all. Most are valued and priced as “great opportunities” but not for any cash flow. And the retail and office vacancies around town are slowly increasing. The drought winters haven’t helped. And the great new Internet bandwidth could positively affect that in the future. One thing I know is that you never know what is going to happen.
One property that looks like it will undergo some change is the Mammoth Mall where the old Charthouse is. It looks like the whole upstairs south wing is going to be converted to residential condominiums and the property will have a new elevator to service the upstairs. But the rumor this week is that they are considering tearing down the old Charthouse building so that they have more parking. Now that interests me beyond my sentimental attachment to the Charthouse.
In 1990 I negotiated the lease for the restaurant space where the Good Life Cafe is. The space had previously been the popular O’Kelly & Dunn restaurant but they had moved to the space where the new VONS pharmacy is today. My client was the wildly successful Good Stuff restaurants from The Strand in Hermosa Beach. They eventually opened in the space with a base crew from their beach restaurants and the same menu.
Good Stuff knew their lease precluded them from opening for dinner. But they did anyway. The Charthouse threatened a lawsuit. We tried to mediate the whole situation but the Charthouse stood firm. Eventually Good Stuff decided to leave. But they allowed their head chef Miguel to stay, keep the basic menu concept and operate under the name Good Life Cafe. And Miguel eventually opened for dinner. And he thrives today.
So now if the old Charthouse building is removed for more parking that would be the ultimate irony. Miguel and Good Life Cafe truly become the anchor tenant for the property.
Like I said, you never know what is going to happen.
Thanks for reading!