Spring Has Spring! Mammoth Will Go Sprung!
Market Summary: May 26 — June 9
At the period’s end the condominium inventory is up four (5) to 103. There were 17 new condo listings in the period and one (1) is already in escrow. There appears to be a consistent flow of new condo inventory into the market. So far the sellers don’t appear to have unreasonable expectations about the fair market values of their properties. Most potential buyers (at least the ones that are truly paying attention) seem reasonably informed about where recent comparable sales have been. Sellers may love websites like Zillow from a marketing standpoint but they have armed potential buyers with sales data and history making them less likely to overpay for properties.
Single Family Inventory
The inventory of single-family homes is down three (3) to 38. There were five (5) new homes brought to the market in the period. Despite the fact that this is normally a quieter time of year for real estate sales, single-family homes in ~$700,000 range are seeing strong activity. The last half of 2018 saw these properties languish on the market. Right now it is a very active segment of the market. Any home listed under that price range simply has too many compromises.t.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up five (5) to 50 at period’s end. Of the 50 properties in “pending,” there are 22 in “Active Under Contract” status (formerly “back-up”). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up five (5) to 87. These stats would show market activity picked up in Mammoth Lakes but not necessarily in the outlying areas.
Market Updates and News
The Mammoth weather forecast for the next 15 days is solidly in the 70 degree range. Thank God. The period was full of showers, rain, wind and cooler temperatures. I traveled both north and south on Hwy. 395 and the east side is greening up beautifully. The additional rain should make it lush for the mid-summer visitors. The wildflowers should be spectacular. Crews are plowing into the Lakes Basin and into Red’s Meadow. But there is still significant snowpack. The Lakes Basin still has 4-6 feet of snowpack and the campgrounds up there are iffy for the 4th of July period. The snowpack is even deeper over the higher elevation access to Red’s. The early summer visitors may be somewhat disappointed.
The California Department of Water Resources monitors around 100 different stations in the Sierra Nevada. They are reporting that as of May 31 the Sierra snowpack is 202% of average and 33 times greaterthan this time last year. This time in 2017 the snowpack was 190% of average.
The big news out of the Town is that it appears the Ice Rink/MUF proponents have found a way to get the project in the ground within their budget. It also appears they are now naming the facility the Community Recreation Center. The newest proposal from the last few days is for a “sprung” structure often commonly called a Tensile Fabric Structure. For the zealots the new proposal is a godsend; now they can bring it in on budget, and the facility far exceeds the original expectations for ancillary and add-on facilities. The proposed structure is so large it would appear the locker room/restroom quandary will be put to rest.
The Town Council approved the re-planning of the project and because the sprung structures are “off-the-shelf” and built quickly they believe the facility can be operational by the winter of 2020-21. But we’ve heard the optimism before. The structure is seven feet taller and 40 feet longer than the most recent proposed steel structure. And we’ll see if the “off-the-shelf” structure is ready for Mammoth’s snow load requirements and the wind episodes in this Meadow location. Maybe it will be nicknamed “the Spinnaker.”
The initial look at the project shows the ability to house the Olympic sized ice rink and has an additional footprint to house all of the other wish-list items. The Town staff exuberantly explained that the tent-like structure can be jazzed up with additional colors and aesthetic features. And apparently the City of Pasadena’s Ice Skating Center is a similar sprung-type structure. So if it good enough for an affluent community like Pasadena it must be good enough for Mammoth Lakes. Maybe they can make the tent look like one of the famous camping tents in Yosemite Valley.
I haven’t heard the recurring term “half-assed” yet but one Council member remarked about the “tremendous cost savings.” I think we have two Council members who truly envision their names on the structure at some point in the future (they may have to die first). The end product may be fitting for that. And one former Council member who is a strong hockey enthusiast stated “the fix is in.”
But the project will have to go through another round of public review and comment. Nobody who desires a more viable skating facility or the elaborate summer day care center will be opposed. The financial conservatives will still question the cost versus other needs in the community including plenty of deferred maintenance. At this point my only question is; if it really is “all for the kids” shouldn’t it be located closer to the schools? It is basic poor planning especially in a small community with limited resources like Mammoth. And now that there is “tremendous cost savings” the school district land lease looks quite palatable. But all of this is for naught, the fix isin. And since I own two properties within close proximity to the proposed site, I hope to profit from it.
And the Town will have to revisit the environmental review of the project. Maybe this time the Planning Commission can actually ask at least one question about the EIR in the final public hearing. Especially in light of how the document failed to address critical questions including dismissing serious concerns from the California Department of Fish and Game.
And one has to wonder, is this type of structure what the Foundation will have to settle for at their new Cultural Center? Or maybe sprung structures can help us solve the workforce housing problem?
Meanwhile, both Mammoth and Bishop Airports were recently recognized with FAA “Partnership” awards. The awards acknowledge the efforts of both communities to work together to develop their respective airports while working on resolving the solution for regional air service needs. Bishop and Inyo County are still targeting the winter of 2020-21 for initial commercial flights and a large pool of 100% FAA grant dollars are available to them. And unlike 20 years ago, the Bishop community is looking favorably on commercial air service and the economic benefit it should bring.
The Sierra Star golf course opened for play this weekend.
Another Westin Monache Studio closed for $275,000. Similar units had recently been selling in the $300-310,000 range. It would appear buyers (and sellers) are recognizing a decline in value by the amount of the new refurbishment assessment. But we will need to see more sales to verify that. There is no final word on the disposition of the assessment but the rumor is that a majority of owners have agreed but not a large enough majority to satisfy Marriott. There must be extensive back room discussions going on. The renovation contracts need to be in place soon to make the anticipated fall scheduling.
A Sierra Valley (aka The Ghetto) duplex with extra garages closed for $665,000. I hope the buyer didn’t add value based on how much they could increase rents. One of my long-time clients who owns several apartment buildings in Mammoth said, “those numbers don’t make sense.”
Two of the first Mountainside townhomes closed in the $1,165,000-1,185,000 price range. These are right across from the Canyon Lodge parking lot and they are 3 bedroom / 3 bath 2-car garage units at 2,025 square feet. That equates to $575 per square foot. That is quite a premium for the location. They should make great winter rentals but I would think summer renters would rather be in Snowcreek. The project is a total of 16 units, the last eight just starting construction this summer.
Favorite New Listing For The Period!
Other Real Estate News
While Airbnb looks to go public (IPO) soon, they have recently infused $160 million into a hospitality start-up named Lyric. Starwood Capital’s Barry Sternlicht has also invested as well as other major real estate entities. The new company is offering Airbnb style “Creative Suites” for the business traveler. They are renting and renovating floors of existing apartment buildings and also purchasing random condominiums and completing renovations. Their business plan includes being completely transparent about their short term rental (STR) intentions and consider themselves to be experts at “compliance.” This is the modern corporate version of what has been happening in Mammoth for decades.
Since Lyric is catering to business travelers in major metropolitan areas it is doubtful they will be moving into resort areas and specifically mountain resort communities anytime soon. But it does bring more credence and viability to the STR real estate investment model, especially for owner/operators who want a slice of the occupancy for their own enjoyment and tax benefits.
The Lyric website is worth checking out. It is very pleasing to the eye and it is inspirational as to how to set up a modern STR (you may want to “Mammoth-ize” a property here in Mammoth). The work is by some of the best hospitality professionals in the world. The “boutique amenities” section of the website is interesting down to the “premium toiletries” in pump dispensers rather than one-time-use plastic mini-bottles. The entertainment center features a real record player for “curated vinyl music” (after we’ve disposed of all our old LPs). Other amenities include artwork from local artists, local artisan coffee (and french presses — no Keurigs), digital front door access and washer/dryers.
All of this gets pretty interesting and it furthers the “wild west” nature of the current Airbnb/STR business and lifestyle trend. While Airbnb is trying to become a cross between a club and cult for its owners and guests, many more pro-active owners/hosts are trying to develop their own non-Airbnb dependent rental model and cut out the fees. And the guests are slowly figuring out the fees attached to renting through Airbnb and are looking for other, more cost effective booking methods. And some will never leave Airbnb — they simply love it.
With large companies like Expedia and Marriott also moving in on the STR market, there should be increased innovation and competition. And they will be clearly competing against their individual owners. The next evolution is unfolding. Time will tell where it takes us.
To receive this newsletter and sales report in its original and timely form, please go to www.mammothrealestateblog.com and sign up for Paul’s Bi-weekly newsletter.
Thanks for reading!