Broker’s Report, Oct 25––This time last year I returned from a fishing trip and reported cold water in the Pacific Ocean along the Baja coast (my conjecture back then––La Nina). This year it is completely different. Water temperatures in the same locations are 10-15 degrees hotter this year. We can only hope this is an El Nino type pattern and will result in a wet winter. Mammoth is currently experiencing a fabulous “Indian summer”–––warm days perfect for recreation and brisk nights worthy of a fire in the fireplace.
Upon my return I realized I owed my readers a Mammoth Broker’s Report more than a fishing report, so here goes…Being away from my desk for two weeks seems like a year but it doesn’t take me long to get back to speed when all the characters pour into my office begging for fish. Besides all of the national news events, I come back to local reports, rumors, and information of all sorts to process (I’m glad I missed the fist fight!). Mammoth is truly (once again) experiencing the pre-winter, no-snow-on-the-ground, stressed-out, recession blues. Lots of us have been through this in the 80’s and 90’s so it’s really no big deal. Go chop some wood, go for a bike ride or a hike, try to go fool a big brown, or simply leave town.
Two weeks of play means a week of serious catch-up, and I came back to five new REO properties on the escrow board. So what is the market really doing? There is certainly Mammoth REO craziness; multiple offers, “highest and best” counteroffers from banks, pissed off potential buyers, posers and losers, and all sorts of hot water for those who can’t read, listen, or comprehend the rules of buying a REO (does your agent have a clue?). And the preponderance of the foreclosed properties continues to be condos, new and old.
The balance of the Mammoth market has some activity, but for the most part listings now have to be competitively priced with the REOs. The recent stock market fall has queered a few transactions––buyers with falling net worth’s just get a little nervous (and you can’t blame them). And the concept of “wealth redistribution” isn’t going to help our market. Other transactions have come apart at the last minute due to financing glitches, and most likely other financing could have been attained through another lender but the buyers are walking away frustrated, or simply hesitant.
Reality is the Mammoth market needs the election over, the financial markets to stabilize (somewhat) and a few big snowstorms. In Mammoth, there is nothing like a good day of skiing to push buyers off the fence. Deep discounts in list prices don’t hurt either. Right now the condo inventory is down (with still plenty of Westins to choose from), single-family inventory is up slightly with the only real price reductions coming in the $1-1.3M range and $2-2.4M range, and lots aren’t selling at all except in the Bluffs at significant price reductions.
Meanwhile, Mammoth is heating up over the upcoming local election. Measure “K” is an $85M school bond initiative, mostly allocated to rebuild the high school. The whole thing is becoming more divisive than I thought it would. For people with kids it is a slam dunk vote. Renters are probably indifferent. Jerks like me with who own property but don’t have kids scratch our heads and try to figure out what’s best for the community. (Anybody got a real cost/benefit analysis?) And locals who have been around know how poorly the last school bond funds were managed by transient, “where are they today”, school officials. But what I really wonder is how all the second home owners feel about it, after all they will be paying a large chunk of the bill and receive dubious benefit. It’s a tough one, maybe it would be more palatable if the dollar amount wasn’t so high, or maybe if they were tying to solve the housing issues for quality teachers, or simply admitting that fancy buildings themselves don’t equate to a better education. I usually vote against such smugness. Do they even teach reading, writing and arithmetic anymore?
On the topic of property taxes, you just received your new bill. The forms for Prop. 8 requests for assessment reductions can be obtained at the Mono County Assessor’s office at 760.932.5510.
The next area of hot water to report is for residential landlords. Vacancies are at an almost historic high. Nobody keeps records for this here in Mammoth––just my own empirical observation, which can sometimes (ha, ha) be more accurate than raw data. This is all the cumulative effect of the affordable/employee housing built over the last few years, the disappearance of large construction crews in town, more locals’ home ownership, more specu-vestors in the long-term rental pool to generate cash, and the general economy. This could be a great season to be a ski-bum, so for all you unemployed boomers or unmotivated GenXer’s, here’s your perfect chance. Be careful though, it can be intoxicating.
For those buyers who walked and defaulted on their Westin Monache deposits (10%) in the last year, the answer to the correctness of your decision came through late this last week. The first two re-sales in the project are recorded––one at a 15% haircut, the other at 25%. Both were cash purchases and likely the same buyer. (Financing is only available for billionaires.) Add up the carrying costs, the selling costs of another 6-8%, and add back in a trickle of income, and you have your answer. Sellers may even be lucky enough to get a supplemental tax bill after the close!
While I was gone they had a nice ribbon cutting at the Mammoth Airport terminal and a Horizon Bombardier made a flight from LAX to Mammoth for good will. Let’s hope this all goes well starting Dec. 18. And for a select few of you I may be available to come down in my truck and pick you up––it’s a long walk. And the drop in gas prices may end up being Mammoth’s salvation this winter.
That’s all I can take for now–––my head is still somewhat in the tropics. I need to get back to work before I’m in more hot water with my clients. My next post should be something new, a new feature that I hope will add even more value to this blog. Stay tuned. Damn, fresh wahoo tacos sounds good for lunch.
Thanks to all who read and comment here.