Mammoth Avoids Being Smoked-Out, And A Massive Reggae Fest Crowd!
Market Summary – July 4 to July 18
The Mammoth Lakes MLS is reporting 20 real estate closings for the past two week period ranging from a low of $375,000 to a high of $1,800,000. Of the 20 closings, a total of 14 were financeable properties and 12 were financed closings. There were three (3) more vacant lot closings including two (2) in The Bluffs and one (1) in Snowcreek Crest. The vacant lot sales activity of the past 13 months has been impressive, probably the most active ~1 year period I can recall. There were three (3) 2 bedroom closings at Juniper Springs Lodge including the beautiful oversized unit. This segment of the market has sat but now may be poised to move. The JSL property has made recent interior and exterior improvements and shows great. Two more $1M+ condo/townhome sales, another impressive segment of the market.
The 10-year Treasury yield ended the period down at 1.3%. Mortgage rates are at five-month lows. Various lender’s rate sheets pass through my information flow and most had the 30-year conventional rate below 3%. Oddly, some were showing jumbo rates even lower than conventional rates. What a difference 12 to 18 months makes. Also, the mortgage industry was surprised to discover this week that the “adverse market fee” that had been implemented on refinances last summer has been officially eliminated. This additional fee could have charged borrowers in up front fees (points) of another .5% or a higher rate — in the .125 to .25 % range. If property owners haven’t refinanced, it certainly is a great time to do so.
At the period’s end the condominium inventory is down one (1) to 50. There were 14 new condo listings brought to the market during the period and two (2) have already gone to escrow. There are only three (3) Snowcreek units on the market and they are all priced above $1.5M. The largest concentration of listings is at Juniper Springs Lodge with seven (7) units on the market. There are now three (3) Tyrolean Village units on the market. These mid-1960s units have been hot sellers in recent months and have been performing at very high values. There are now only four (4) Westin Monache units on the market including a new penthouse 2 bedroom unit. Speaking of the Westin, the owners relations manager told me this week that the long-awaited for “refresh” renovation work could start as early as mid-August.
Single-Family Home Inventory
The inventory of single-family homes is down four (4) to 20. There are eight (8) homes listed under $1M including five (5) in the Sierra Vista Estates neighborhood which is often referred to as the “behind the Post Office” area of town. These subdivisions were created in the early 1960s and typically have smaller lots in the 5500 to 6500 square foot size.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up six (6) to 111 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up eight (8) to 155. So summer sales appear to be moving along but the inventory remains tight. Many potential buyers who have been looking in the past months have cooled or simply fallen off the radar. But every day there is new interest coming from somewhere.
Market Updates and News
With wild fires burning all over the western States, Mammoth has been fortunate to be spared any heavy smoke. The hot temperatures of previous weeks have moderated and the weather has been near perfect, especially as the morning “draining” through the Mammoth Pass clears the air. There has been a substantial fire to the north of Mammoth in the Bald Mountain area south of Mono Lake. Substantial smoke can be seen blowing to the east. There are fire related crews currently staged in the Eagle Base parking lot.
Town remains busy but thankfully not overwhelmed. So far this looks to be the summer we were hoping for. Most restaurants are somewhat struggling because of the lack of staff. But the trend toward normalcy continues. The Village held the annual Reggae Festival this weekend and the crowds were as big as ever — all with little or no advertising for the event. There is obviously pent-up demand. The crowd grew substantially as night fell. An event of this size was inconceivable just 3-4 months ago. The Golden Dragon Restaurant is now promoting The Summer Jam Concert Series. For those who were around decades ago, this restaurant space on Old Mammoth Road used to be a notorious nightclub. The Rafters nightclub shared the same parking lot. It was quite the scene. Maybe all of this will be rekindled??
The Mono County Health Dept. reported a recent Covid related death and 19 new positive cases. On the street, the markets, or the restaurants/bars nobody seems concerned. It is business as usual in Mammoth Lakes.
The Town Council is looking to remove another big chunk out of the local marketing budget. Some in the lodging industry are squealing but most know the reality — Mammoth needs more workforce housing and not more guests. Housing is at crisis stage and is rapidly becoming a hot button issue. It is impacting almost everyone. Many are looking at an estimated $20M in excessive marketing the past few years and another $20M on an ice rink and thinking these dollars should have been put towards housing. New workforce housing basically costs $500,000 “per door” and this money could have built 80 new units. Others point that they could have simply purchased local condos of various sizes and spread the workforce housing into the community. This could have purchased well over 100 units pre-Covid. Meanwhile there is absolutely nothing happening at The Parcel where 81 new workforce housing units have been approved, including the construction contract. Maybe they are waiting for the price of construction materials to come down….
Local developer John Hooper has completed the 540 Old Mammoth Road condominium project and has moved to multiple new single-family homes under construction in various locations in town. This includes a new “spec” home on lower Twin Lakes Lane just above the Village. He has purchased numerous lots around town so there should be more. He also has the excavation work completed on another small condominium development on Lakeview Blvd. just above the Village. This is a sweet location adjacent to the proposed Limelight Hotel entrance. I’m guessing he’ll have units framed by the end of the year. What a contrast from the public sector.
I don’t find much useful content in the real estate trade publications I receive, especially Realtor® Magazine. The recent issue has an article “Tackling Buyer Remorse”. It rambled on with different pseudo-psyschology strategies for those in a “buyer’s remorse” state. Just laughable. The solution is easy; just make the property presentable and put it on the market while the market remains hot. We’ve seen some of this in Mammoth in the past 14 months and those in remorse have walked away with a nice profit.
As the owner of a blog site I receive all sorts of random press releases. One I received this past week; “2021 Study: How Legalizing Recreational Marijuana Impacts Home Values.” Their conclusion; “marijuana legalization leads to higher property values and millions of dollars in new tax revenue.” They didn’t even question correlation/causation……Mammoth currently has three dispensaries (aka pot stores) and a fourth appears to be stymied at the moment. Maybe we should be pushing for that fourth one because it will certainly push local real estate values higher.
A 1 bedroom + loft / 1.5 bath at Sierra Park Villas closed for $420,000. These units are compromised. In the past the downstairs half bathroom had the capacity to add a shower. The Town isn’t allowing this remodel anymore. So owners are stuck with one shower. This isn’t great for STR. Two years ago similar units sat on the market for months and months right at $300,000. The similar unit peak sale from 15 years ago was $360,000.
A phase 1 1849 2 bedroom / 2 bath unit closed for $637,000. This seems like a very good buy. Clean unit with no additional fireplace expense. Project is in outstanding condition and steps to Canyon Lodge. The biggest concern for a seller today is “leaving money on the table.” Some listings just need to “marinate” on the market a bit.
The sale of a luxury home in Starwood for $1,800,000. This is a strong “tell” in the market. Built in 2002 and facing Minaret Road, this home was on-and-off the market for years, many years, including a couple stints with my brokerage. After numerous price reductions it finally sold in February of 2019 for $1,185,000 which was $270 per square foot (pretty cheap for a “luxury home”). It was on the market for less than 60 days this time around before it sold.
Favorite New Listing for the Period
Here is something quite different. These are The Acorns in June Lake and steps to the Gull Lake Park and Marina. These are five separate patented steel structures engineered to all of the local snow load/seismic specs. The finished floorplan is 2 bedrooms + loft / 1.5 baths with laundry. Almost 1100 square feet. Most of the inside framing is completed and all of the cabinets and doors are onsite. Health issues force the developer to see if we can find a buyer, joint venture partner, or…? Once completed this could be converted to a small condominium project, or?? The hard work is done! Check out the video tour and the setting near the lake. Fantastic location.
Listed at $1,799,000
Other Real Estate News — The Alterra Lawsuit
A recent decision by the Colorado District Court will continue the class-action lawsuit against the Alterra Mountain Company. I poked around and found the 30-page court decision. It is full of the typical legal jargon and cited numerous case law precedents, but it an interesting read. Especially since I might be one of the plaintiffs. Many of my readers may be too. Reading through the document helped pass the time while I waited for some signed documents to come back (the magic of electronic signatures).
The suit stems from the closing of the Alterra owned resorts on March 15 of 2020 due to Covid and the stay-at-home orders. These resort closings happened right here in Mammoth as well as Alterra’s other resorts. The plaintiffs are claiming that Alterra has failed to offer a refund or credit for the balance of the season.
(As an aside, I will never forget that March 14 here in Mammoth. It was a dark, creepy, rainy, windy Saturday with most of the Ski Area shut down and people wandering all around town. The shuttle buses were full of passengers and the windows were completely fogged-up. All on the verge of a surging pandemic. And oddly, the condo I showed to a young couple late that afternoon I ended up selling to them several months later. When I read about the Ski Area closure that afternoon I had the same relief I had months later on Labor Day weekend when they closed the forest.)
The plaintiffs of this class-action lawsuit are being represented by a prominent consumer protection law firm (Fortune Magazine says the firm is “feared by corporate America”). The firm has previously sued Vail Resorts for similar causes as well. Some may see the irony of Rusty’s company being pestered with what might be considered a nuisance, yet very expensive lawsuit.
And there is no doubt this coming season’s IKON Pass “I Agree” clauses will contain extensive language giving Alterra the right to close their resorts at any time at their discretion with no refunds or credits due to the Pass holder. The legal provisions protecting Alterra will now be extensive. It will be far more than “wind and weather permitting,” which alone could be a good argument for closing — winter ski weather isn’t conducive to a pandemic.
The judge’s recent decision dismisses many of the plaintiff’s claims but retains what are probably the most critical claims; breach of contract, consumer fraud, deceptive trade practices, violation of California Consumer Legal Remedies Act, etc. The judge curiously states that the arguments in the party’s’ briefs are like “ships passing in the night.”
One of the more interesting aspects to the case is simply the concept of how long a ski season is suppose to last. The judge states “based on Defendants’ acknowledgement that the 2019/20 season ended sooner than other seasons due to the pandemic, it may reasonably be inferred that Defendants have metrics by which to evaluate when any given season should end – due to ski conditions.” But I wonder if this is true? We know the way Dave McCoy ran the show — ski until the snow is gone, whether May or August. And his philosophy has been substantially carried on by the subsequent MMSA owners. It is the Mammoth tradition. But is it true at all resorts? Many simply close when the customers are gone regardless of how much snow there is. At some point there is likely to be evidence introduced that many resorts close before the snow completely melts. It’s their economics.
The Defendants (Alterra) argue that they never stated how long the ski season would last, and furthermore they did not cause the resorts to close earlier. This was rejected by the judge. His opinion is the ski season is a period (length) of time “during which snow conditions allow for skiing and when people typically go skiing.” Again, I would question whether this is true in all resorts. We all know business drops off significantly in spring. At some point it isn’t when “people typically go skiing,” it is when people go the beach, or the River.
There is also contention about the non-refundable provision in the IKON Pass. The Court agrees with the Plaintiffs that “it does not apply to allow a seller who cancels or revokes the Ikon Pass to cancel and keep the consumer’s money.” And “the contract’s no-refund clause does not apply to bar a passholder’s claim for a refund where Defendants allegedly failed to fully perform.”
There is also debate about what the consumer is actually purchasing with a Pass. “Defendants contend, the passes are “temporary licenses” to access Defendants’ resorts and the “services” which Plaintiffs rely on are “ancillary” to such licenses. Plaintiffs counter that Defendants are not merely selling access to land; they are selling extensive ski-related services as well.” This appears to be a “ships in the night” issue for the judge. But he certainly leans towards the Pass as “services.” He states “Plaintiffs purchased Defendants’ services such as providing groomed trails and ski lifts and gondolas to reach such trails. These services are not ancillary to but, instead, are at heart of what a ski pass holder purchased.”
Then there is the question of misrepresentation. The judge writes “Defendants contend that the statement – misrepresentation – was not deceptive when made because they could not have known about the pandemic or ensuing governmental closure orders. But, as Plaintiffs counter, they are alleging they were misled by what Defendants would do if their resorts closed – for whatever reason: that they would keep all of the passholders’ money.”
Ultimately it will be interesting to see how this plays out in a trial. Us IKON Passholders may someday see a small refund for the balance of the 2020 season. But you can be sure it will be tacked-on to a subsequent season. So once again the only winners will be the attorneys.
I’ll be back in three weeks.
Thanks for reading! Please stay healthy.
** Closed sale data is compiled from in-house files and public records.