Mammoth Real Estate Sales, April 15, 2018

Ski Crowds Thin Out While Weather Fluctuates Between Winter And Spring

Market Summary: April 1 – April 15

The  Mammoth Lakes MLS is reporting 20 real estate closings in Mammoth for the period ranging from a low of $199,000 to a high of $1,812,000. Of the 20 closings, 17 were financeable properties and 12 were conventionally financed. The local real estate market is back to a familiar pattern with 11 condo sales under the $430,000 and two $1M+  residential sales. There were also two condo sales between $900K and $1.1M.

Condominium Inventory

At the period’s end the condominium inventory is up three (3) to 54 including those three Creekhouse units that are under construction and far from completion. There are now 29 condos listed under $400,000 which seems to be the new threshold for “cheap.” There are only another 13 condos listed between $400K and $600K. So we’ve experienced a small increase in the low-end condo inventory. But the overall inventory remains low. There were 16 new condo listings in the period and seven (7) are already under contract and in escrow. Exactly the same as last newsletter two weeks ago. 

Single Family Inventory

The inventory of single-family homes is even at 35. A back-to-the-market low-end home is sitting at the least expensive home in Mammoth at $529,000. Two of the long lingering low-end homes closed escrow during the period at $470,000 and $520,000. But most of the <$1M inventory is currently sitting.

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is down five (5) at 53 at period’s end. Of the 53 properties in “pending,” there are 37 in “Active Under Contract” status (formerly “back-up”). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down 11 to 73. These numbers should be up at this time of year (the spring selling season). Perhaps the busy 1st quarter was demand brought forward. The next 45 days will be telling. And the next few months are historically when the bulk of the new inventory comes to the market.

Market Updates and News

The spring break weeks are over and the ski crowds are now dwindling. Eagle Base and Canyon Lodge closed today for the season. But new snow events are in the forecast. Maybe the local residents will get some prime skiing in the balance of April. The next few weekends should be busy and there are new Ikon ski pass holders taking advantage of late season access.
​​​​​​​Last weekend Mammoth was hit by a major rain storm that cleared by mid-day Saturday. I watched Old Mammoth River flow in-and-out of Lake Chateau and most drivers were hydro-planning through it all. If Public Works can’t keep the storm drains cleared of debris during a well forecasted deluge, it makes me wonder how they will manage an ice rink facility and protect the Mammoth Creek riparian environment. The private property managers seemed to have a good grasp on the potentially hazardous rain event. Most of them know how to use a rake.
Town Council candidate Kirk Stapp who was a Councilman from 1986 to 2008 was interviewed in last week’s issue of The Sheet. He says he is running because  he is “disappointed with the current Town government.” He is afraid of too much borrowing and the stretching of resources. He says the current Council simply endorses plans and expenditures without asking questions or doing any sort of analysis…And here I thought I was crazy all this time.Meanwhile, the whole Council election race is almost under the radar at this point. But the winter busyness is coming to a close, and there are more than 45 days to go.
The graded lot at the new Grocery Outlet location on Old Mammoth Road has sat all winter but construction work is starting back up. And now we hear they intent to construct a new Grocery Outlet in Bishop. More grocery shopping options are certainly welcome here in the Eastern Sierra.
Solid rumors are that YOTEL (yotel.com) is the buyer who has the Dempsey corner (Nevado’s, etc) in escrow. I spoke to listing agent last week and asked if they intend to close immediately or if the closing was contingent upon approvals, etc.. from the Town. She seemed to think it would close before any pursuit of entitlements.
The YOTEL concept would be an interesting addition to the Village area. They have a strong Millennial focus. The rooms are small (~170 square feet) and inspired by Japanese “capsule hotels.” They call it compact luxury. The beds are fold down smart beds. There is technology everywhere including electronic check-in and robotic luggage concierge. Their facilities also feature large and hip multi-bars, restaurants and congregation spaces. 
I’m not sure how Mammoth Lakes fits into their mix of locations; they are primarily focused adjacent international airports like in London, Paris, etc. with expansion plans into Dubai, Singapore, Boston, Miami, etc. Maybe they think they can introduce their concept to southern California Millennials in Mammoth and turn them into raving fans….I wonder if they have to meet employee housing requirements for their front desk and valet robots??   
The whole Mammoth Airport/Bishop Airport discussion became quite fuzzy to me during the period. News outlets were reporting that the FAA had received and looked favorably on the Bishop Airport Certification Manual and that is a good precursor for moving towards commercial certification for the Bishop Airport. Meanwhile, I had to renew my TSA clearance at Mammoth Airport and sat down and chatted with the Airport Manager there. 
Even though Alterra and Mammoth Mountain now want the (subsidized) air service to be based in Bishop and there are some individuals in the community who are pushing it, there doesn’t seem to be general consensus in the Bishop community to want it. That was the attitude some 20 years ago when all of this started. The Airport Manager also didn’t see how the Town could manage the cost of running two airports; one is enough. Also, the general aviation popularity of Mammoth is only increasing (I can affirm that, the volume of private jet traffic has been impressive the last two winters). 
So I see this getting messy, especially because Rusty wants a new direction. This will become a serious challenge for the new Town Council. I’m thinking that if Alterra wants the air service based in Bishop, that in order to gain community support in Mammoth we need to see Alterra pay off the remaining balance the Hot Creek settlement. It needs to go away and they were the ultimate cause of it. It is a mistake they need to be responsible for. That’s a good reason for me to vote for Kirk Stapp — he knows where the bodies are buried. 
The other concern I have; will the Sierra Club sue Bishop just like they sued Mammoth for expanding the airport and air service? The environmental documents didn’t fully assess the “growth inducing impacts.”  That stalled things here in Mammoth for a good 5+ years. Why wouldn’t they?? It istheir job. Maybe Mayor Wentworth has some insight??
Part of the recent marketing efforts for the new Ikon Pass was the “Four Awesome Road Trips” for Ikon Pass holders. I don’t think the New England road trip is in my future but the California road trip might entice some. Fly to Reno/Tahoe Airport and ski Squaw Valley and Alpine Meadows and then road trip down to June and Mammoth Mountains. Throw in some gambling and great sight seeing. Some might chose to simply head to Vegas from here. Quite frankly, with the air service situation the way it is here, this is a reasonable way to market Mammoth to new Ikon pass holders. Do we really need an airport??
And speaking of the Ikon Pass, the senior citizens are still writing enraged letters to the local papers about the loss of the senior passes. But what may be lost in their understanding is that Alterra has tons of on-mountain data and that data is telling them something. And if the future is YOTEL, then the future of skiing and snowboarding isn’t about senior citizens. And anybody who can’t see what a great deal the Ikon Base Pass is might be too myopic to be on the ski runs anyway. The only question is how much will the Ikon Pass cost in five years?

Noteworthy Sales

Two Westin Monache 1-bedroom / 1-bath units units closed at $330,000 and $340,000. Both units are in the “19” stack which is wedged into the notch of the building overlooking the pool/spas. We may look back and see these as great deals. Most of the new Studio listings are coming to the market just slightly less than this. 
As previously mentioned, two of the very low-end (and greatly compromised homes) closed at $470,000 and $520,000. For the balance of 2018, any decent single family home should be priced at least in the $600,000 pice range.
Snowcreek #1001 was a previous Favorite New Listingbut it took surprisingly long for it to sell. It finally closed for $565,000. Those buyers will be glad they bought it.
The second modern “spec” home on Rusty Lane closed for $1,285,000.

Favorite New Listing For The Period!!

Talk about a nice location and setting!! The Cabins at Crooked Pines was one of the last projects Intrawest developed in Mammoth, and one of the best built. So this new listing is a corner 2 bedroom / 2 bath “flat” that overlooks the common area spa and fire pit. And all of that overlooks the 4th fairway of the Sierra Star golf course. And the massive wind-swept pines in the vicinity give the location its name.
   
This unit is beautifully and tastefully furnished and decorated and almost all of it is included in the sale. The unit has not been a rental. There is understructure parking with separate bike and ski storage. There is a stack washer/dryer and extra owner (lockable) storage too. This is a quiet location surrounded by residential properties and golf. 
Listed at $499,000
Courtesy of Mammoth Realty Group​​​​​​​

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Other Real Estate News

I was looking at a couple of data sets this past week and the information is telling about the market. The first included all of the condo closing in 2006. There were 374 condo closings that year or averaging 14 per two week period (like this newsletter frequency). So that is pretty consistent with the past couple of years as far as unit volume. The Mono County Assessor also pegs spring of 2006 as the peak of the last real estate cycle. That is about right but there were certainly some super high sales in 2007.
   
So I went through the sales and matched a few dozen with current sales numbers. Almost every one fell between 68% and 82%. So Mammoth condos are still selling far short of the 2006 values, most between 70 and 80% of those peak values. That is quite a difference from the real estate markets where most of our buyers live (southern California). 
The other data I was looking at was the condo closings from 2011 (the condo I was trying to establish a value for was on the market in 2011). That may have actually been the low point of the last market cycle. But matching the sales data from then to now really displays how the low-end of the condo market has moved. Hindsight being 20/20 we all should have dumped money into these low-end condos. 
​​​​​​​A 20% down buyer of these condos could have placed long-term renters into the properties and come close to breaking even. That down payment would now have gone four, five and even six times in value. Interestingly, owners who made these moves would likely be renting on a nightly basis by now. The Airbnb rental model in these small condos has certainly driven the values. The ~$1M condos aren’t even close to this type of appreciation. 
And opportunities to finance condo hotel properties is increasing and that is good news on many fronts. These are not conventional (Fannie Mae) loans. The loans require a larger down payment and most are the 5/1 and 7/1 ARM products with pretty reasonable caps and indexes. In a world where nobody seems to own a property for the “long term” this could be a good way to go.
​​​​​​​This trend could certainly move condo hotel values up and the potential developers need that. The front desks are all utilizing “dynamic pricing” models and software to maximize rental revenue. This segment of the market is turning.
And just in the past few weeks, the Mammoth MLS has seen a host of new high-end residential lots come to the market including those in The Bluffs and Snowcreek Ranch. Do these lot owners think a new round of high-end home owners are looking at Mammoth for a custom second home?? Maybe they have seen all the private jets sitting on the tarmac at Mammoth Airport? We’ll see.
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Thanks for reading!

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