Mammoth Real Estate Sales, December 16, 2018

Good Skiing And Mostly Good Weather, And Here Come The Holidays!!

Market Summary:   December 2 – December 16

The  Mammoth Lakes MLS is reporting 13 real estate closings for the period ranging from a low of $135,000 to a high of $1,150,000.    Of the 13 escrow closings, 11 were financeable properties and eight (8) were conventionally financed. There were five (5)  condos selling under $450,000. The high sale for the period is the commercial property on Old Mammoth Road that was privately financed.  The 10-year Treasury slipped again and closed the week below 2.9%. This time mortgage rates appeared to follow, at least that is what the mortgage brokers were pushing this week.

Condominium Inventory

At the period’s end the condominium inventory is down five (5) to 97. There were numerous expired listings at the beginning of the month. There were 11 new condo listings in the period, and none to contract. The Mammoth real estate market should move into a lull period but that isn’t what happened last year; the holidays and January were busy.

Single Family Inventory

The inventory of single-family homes is down another four (4) to 33. Again, some expired listings. There are three (3) homes listed under $629,000. There are still some decent homes on the market between $600,000 and $800,000.

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is up three (3) to 40 at period’s end. Of the 40 properties in “pending,” there are 14 in “Active Under Contract” status (formerly “back-up”). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up nine (9) to 66. The market isn’t super active but it isn’t dead either.

Market Updates and News

The Ski Area is basically in full operation and there is some great coverage and some thinner coverage. The snow making crews continue to make snow to fill in any sparse areas. The Main Lodge Super Pipe remains incomplete. The snowmaking had to be focused somewhere else. There is some snow expected tonight but there are no major storms in the forecast through the end of the year. The conditions will suffice. Another foot or two would be ideal. But the Ski Area will make the best of it as they always do. 
   

Based on being up there riding lifts and some other anecdotal evidence, there have been numerous “non regulars”, first-timers, and Tahoe “invaders” (their words) on the Mountain. They are new Ikon Pass holders who have come to check-out Mammoth and the good early season conditions. The Ikon Pass has certainly been a common topic for discussion around town….Canyon Lodge is open but there is some lingering construction that should be completed in the next week. The escalator gives the place a different vibe. Everybody has their own description. After the anticipated work next summer, Canyon Lodge may lose the quirky image of the past.
   

I have had two meetings during the period with the YotelPad sales team. They are refurbishing the old Dempsey Construction office next to Nevados and across from Mammoth Brewing. This will serve as their exhibit and sales office. This location has the best traffic counts in town and lots of visible parking. The next few months will be busy for them. Their marketing and hype should help juice the local real estate market. Mammoth property owners received a mailing from them this past week.
   

The building plans for the new YotelPad condo hotel facility are with the Town and should begin through the public process in the new year. The site planning looks good and they are not asking for any variances, etc. So the approvals are not contentious. The plan is for 156 condo hotel units — PADS and 21 townhomes called DOMOS. In the plan the townhomes back-up to the neighboring Viewpoint condo project. The main hotel building sits in the center of the lot with a small parking/entrance area street side and green belt recreation areas between the hotel and townhomes. Good use of the solar aspect. The large pool and spa area are overlooking Main St. at the very south end of the property; sun, views, etc..
   

The sales team isn’t exactly sure how the reservation process is going to be handled at this point. They have made the initial Department of Real Estate filings. These will be whole ownership condos, no fractional interests. Pricing for the condos will start in the $300,000-400,000 range. The townhomes are expected to be in ~$1.3 range. Certainly not the price points of the mid-2000’s. These units will be competing with Westin Monache and Village units. The sales team expects to have 5 or 6 financing options for purchasers. 
 

 I asked the team who the “buyer” is? They expect a broad base of potential buyers including pure investors, some baby boomers with adult children who are attracted to this concept, even Millennials and GenXers who have been successful and are attracted to the concept. These Re:play guys (the old Intrawest group) know how demographics drive sales. I’m guessing their market research shows the young tech and Hollywood professionals in So Cal will be prime users for this facility, and investors too. We’ll see. The project will be quite different from any other in town. Maybe similar to what the “W” could have been.
   

I tried to impress upon them that seasoned potential buyers are going to want to know that this project will be aggressively and properly managed from the start. This is the lesson from the past. The original condo hotel properties in Mammoth floundered under inexperienced management; they didn’t grasp they were managing a hotel, a condo project, and investments all at the same time. That led to high levels of dysfunction and dissatisfaction from owners and guests. It impacted values. And it is one of the key reasons so many condo hotel owners moved away from the “front desk” rental programs. Today these facilities are running well, but there was a long learning curve. YotelPad (and Mammoth) needs to avoid that.
   

The winter of 2019 is destined to be the Ikon Pass and YotelPad winter. It is bound to be quite interesting, and entertaining too.
   

The Ice Rink plans were back on the Town Council agenda during the period. The pool of available money has shrunk down to less than $10M and that includes the $5.5M bond (nobody seems to want to answer my question as to how much these monthly payments are and how much of the debt has already been serviced?). There are other “uncommitted” dollars available but there seems to be a consensus that those should not be raided. So the quandary continues.
 

In the end, the Council instructed the staff to further negotiate with the School District about a long term lease for the existing ice rink site (that would be nice since Mammoth property owners are now paying ~$100M towards their improvements). The Council also wants estimates for improvements of the existing ice rink including a roof and potentially new equipment, etc.. The staff reluctantly reports that ice rinks are expensive to maintain. But we may have come full circle. 
   

One rather irksome Council member’s comment was ” We’ve been planning this (ice rink/MUF) for over 20 years” as justification for moving forward at any cost. Well, I was on the multi-purpose facility committee in the mid-90’s (and he was nowhere to be found). We concluded that the “dream” facility was so massively expensive to build and operate that the community really had to mature in many ways before it could ever afford it. There were and are other priorities. Almost 25 years later the community clearly hasn’t matured to that point.  
   

And despite a “priority setting” meeting just a few weeks ago, some Council members seem to be moving away from the Ice Rink/MUF as #1 priority and replacing it with workforce housing.
 

Following the meeting the public was urged to come out (last weekend) and observe a youth hockey tournament at the ice rink. The implication by some was that the community of Mammoth should be ashamed of hosting a tournament at such an inadequate facility.  I went and checked out one of the matches. It was a spectacular day and the cold temperatures of the prior week had the ice in great shape. Personally, I couldn’t imagine a more perfect setting on that day; crisp clean air, natural light, panoramic mountain views, etc.. I wasn’t ashamed these privileged young hockey players were playing at our inadequate rink. I can’t imagine it any better.
 

 I left that day thinking that playing hockey on man made ice is a real luxury. A very expensive luxury. Like downhill skiing. Is the Town subsidizing anybody’s downhill skiing??  And why do we need an indoorsummer day care center (the MUF)?  Kids should be outside in the Mammoth summer (does it get any better?)…The longer this whole $25 million dollar ice rink facility snafu goes on the worse it looks…..
  

Meanwhile, the Council also approved the Town’s continuing pursuit for FAA grant dollars for Mammoth Airport. The list of potential improvements are relatively small items but the Council wants to keep the option to capture the grants which typically require a 10% match. Mammoth Airport has already been a very busy general aviation airport since the Mountain opened. And while the commercial emphasis is moving towards Bishop, many believe that is likely to be a good 10 years away, or more. 

Noteworthy Sales

The cheapest home that has been on the market the past spring, summer and fall finally closed. The Old Mammoth Mill St. home closed for $355,000 or $335 per square foot. It will be interesting to see what the new owner does with the property. I can personally attest that winters can be brutal in this location

The highest sale of the period was the commercial sale at 101 Old Mammoth Road (aka the Century 21 building). Based on setbacks established by the Town Council, this is one of the last locations in Mammoth where a new cannabis outlet could be created. The multi-tenant mall was bought specifically for that purpose and there was a similarly minded back-up buyer waiting for the opportunity. But the new owner now has to wait until later in 2019 for one of the current leases to expire. And according to this week’s issue of The Sheet, there is a dispute with the Town over another cannabis application around the corner. Cannabis wars!! I’m betting one of the existing tenants will gladly move to accommodate the new owners. This should become the highest visibility cannabis store in Mammoth. That may be important, so the visitors can find it.


Favorite New Listing For The Period

I’ve sold a number of condos in close proximity to this in Snowcreek Phase II in the past couple of years. There is a convergence of special features and amenities in this immediate location; amazing views of Mammoth Mountain and Mammoth Crest, close proximity to Mammoth Creek and the Meadow trails, a separate wonderful brook that flows between the buildings, a sizable pond between the buildings, and the common area spa is right in the middle of it!!  The location is near perfect. And the project is in outstanding shape with new roofs and eaves, redone Hardi siding and paint, trex-type decking and more. All of that is paid for. This is Snowcreek #239, a 2 bedroom + loft / 2 bath townhome. Some upgrades including a pellet stove insert in the fireplace.

 

Listed at $499,900

Courtesy Coldwell Banker Mammoth


Other Real Estate News

Vail Resorts was in the stock market and ski industry news this past week. The stock price dropped substantially after they reported a major loss in their first quarter 2019 results. The drop was substantial but the current valuation is almost equal to what it was just a year ago. The report was full of typical Wall St. mumbo jumbo and accounting slight-of-hand, but what was most interesting can be found in the earnings conference call. 

The Vail season pass program, including the Vail Epic Pass and all of the local versions, is now up to 900,000 pass holders. That includes 100,000 new pass holders from their “military pass” program (one can only imagine that Alterra will be bringing something like this to the table). That helped increase pass revenue by 13% from just  a year ago.
 

But the analysts were quite specific in the questioning of the impact of the Ikon Pass, both this winter and in the future. Vail’s CEO Robert Katz remarked “I would say we think Ikon’s got a great product for the resorts that they have in that network. And I think that their entry has really helped the overall market. I think there is no doubt that they’ve brought greater awareness…and carry the message ...”If you’re going to ski, you should really consider a season pass.“…there’s no doubt that in certain spots they may have had an impact on us.”

 

Vail admitted that the two markets of difficulty is Utah skier and Tahoe (lots of Tahoe skiers on Mammoth Mountain the last two weeks). Katz said “there’s no doubt that Ikon has a strong product for that local, Utah skier.” Vail reported that the Epic Pass is fine in Tahoe but the Epic Local and Tahoe Local passes that are priced below Ikon have been impacted. And they don’t include Mammoth or June.
 

Vail also admitted that they will have to be more dynamic in their future pass offerings. That would include more Local-type passes, combination passes and affiliate resorts. And all of that will eventually impact revenue and profits.  

From a stock perspective, Vail also bought back $50 million in stock during the quarter at an average price of $252 per share (Friday’s close was $224 per share).

Clearly, the ski season pass war is just beginning.

 

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Thanks for reading!   

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