This Mammoth Real Estate Q&A appears in this weekend’s The Sheet. Mammoth has plenty of new snow, classic warm weather and a big crowd.
Q: Well it’s that time! Time for Paul to make some predictions about what the Mammoth real estate market will do in 2009 so we can plan accordingly. So what can we anticipate for the year ahead? And as usual, don’t sugar coat it.
A: Predicting anything in Mammoth has always been a dangerous preoccupation. That said I’d prefer to refer to the following as “things to watch for” in 2009. Curses aside, we do live in interesting times. Mammoth has entered a familiar “pain and dream” cycle once again but with all sorts of new twists (let the Village go to hell and re-redevelop the entry to town–that will solve everything). Some actually think they can re-inflate goldilocks, others are seriously lost in denial, and laughingly, there are others that think they can hide from the most recent past by being gloriously reborn at something now worthwhile. And some are just getting down to a new (old) way of doing business.
The first thing to watch is what I’m watching the closest–foreclosures. The 2008 pace in Mammoth was slow but steady. The volume wasn’t alarming but they did affect the values, mostly because the properties were priced to sell by unemotional sellers. The good news is that there were buyers, and those buyers gave us a clear idea of the price support levels in the local market. As we advance into 2009, I think we will see a similar pace, or maybe just up a little. Like many real estate markets, a significant volume of sales will be foreclosed (REO) properties. Indicators are there will be a few more in the Village condo hotel projects, maybe even a few in the Westin Monache.
Right now the lender/owners of these REO properties appear really motivated. I think its has much to do with pressure to get cash back on their books. But every REO transaction is different, even with the same owners. So predicting how they will proceed is impossible. But the REO sales will continue to set the pace of the market. If the volume of available properties comes up, or if the inventory lags, then sales prices will continue to stairstep downwards.
The next thing to watch is interest rates. As of this writing the rates have come down sufficiently enough to spur a surge in refinance applications. That is significant. A fixed rate mortgage with a nice low rate is a solid inflation hedge. And just like gas prices, they may come down to ridiculous levels, at least for a while. Conforming loan limits are up in Mono County. But the rules for qualifying are another story. Stated income loans are out. FICO scores (today’s adult report card) and equity are critical, and sustained and verifiable income (tax returns) a must. All others need not apply. At least for now. With all the inevitable changes in Washington, who knows what will happen. A repeat of 2003-06 is unlikely. But lending has always impacted the market, and it will in 2009. Stay tuned.
The next thing to watch is the pressure on the Town to tinker with the ordinances regulating nightly rentals (transient occupancy) in the single-family zoned neighborhoods. I’ve written about this in the pat, but now the writing is on the wall. The Mammoth Town Council is reacting to their budget shortfall (it’s deja vu all over again). They just moved to cut ten senior staff positions. Now they’re going to look for more revenue (bed tax). For years the Town has looked the other way on clandestine home renters. It’s a bit of a quandary, owners are renting for big dollars and the Town isn’t getting their 13%. But the whole program violates the Town ordinances.
After all the bear shit the Council has waded through in the last year, who would want to sit through these public hearings? But now it has become a matter of getting the money (sounds like an old Yiddish saying a friend of mine used to say). Many locals don’t want to allow transient rentals in the single-family neighborhoods–especially if they live there. Some don’t care. Some make a living servicing the arrangements (and could prosper more if it weren’t “illegal”). But the locals are the voting block. The second homeowners are more inclined to be in favor. If nothing else they would like to have the option of legally renting and perhaps offsetting some of the expenses of ownership. I think there are many potential buyers of homes who don’t want to own in an Association but would like to own a quality vacation property that generates revenue. Clearly, the renters like renting homes. Some of these underground operations are pulling in big numbers (and little taxes). In 2009, economics may dictate a new direction. And that direction could impact values.
Another one to watch, and I did predict it (it was so obvious), is what, or who will end up with the infamous Hillside property. Roger Staubach/Cypress Equities was foreclosed on just a couple of weeks ago. That was going to be the Ritz-Carlton. The property could have been picked up a the Trustee’s Sale for about 20% of what Staubach/Cypress purportedly paid or about 25% of what they owed. It went back to the bank. Too bad the Clearwater people don’t have the vision to own it. Okay, so I’ll make a small prediction. If the Clearwater folks would buy and develop the Hillside property instead, and give the Town the property they own on Old Mammoth Road as their impact fees, everybody would be so far ahead. But what the hell do I know, I’m just the court jester. But somebody is going to buy Hillside for cheap. But then what do they do with it? With condo hotel projects on their heels, development fees and costs out of control, and development financing in the toilet for many years to come…I have an idea. The Town should make the new owner plant extensive indigenous grasses and wildflowers on the property as an environmental measure to control dust. Then the Village and surrounding neighborhood will have a nice park for the next 20 years. (Some small pads for our Pilates mats would be nice too.)
And speaking of developers, will we hear anything profound in 2009 from Starwood Capital? (Who are they again?) I really am hoping for a Baccarat Hotel now instead of the “1” (it appears there will only be one “1”). After all, Mammoth is a Baccarat kind of place. The Ski Area does have an impressive new logo, but what happened to the new brand? They’ve spent so much time and money and had all the experts working on it. Is the logo the brand? I’m so confused (as usual). Maybe they’ll get this all sorted out in 2009. That isn’t a prediction, only a hope. The world seems so full of hope these days. But we do have daily air service now and God knows we all need for it to continue. It all seems a bit anticlimactic at this point.
There is one prediction I really do hope comes true in 2009. I plan to get more skiing in. But for some reason that never seems to work out either. Happy New Year!
Predictions…mmmm sounds like paul just wrote a bunch of ambiguous statements like every other RE Agent. And to top off all his ambiguity….I quote him…
“There is one prediction I really do hope comes true in 2009. I plan to get more skiing in. But for some reason that never seems to work out either. Happy New Year!”
What a shmutz!
Dude, get a hold of yourself.
Real Estate in Mammoth will not see a bottom for a long time. In fact, once it does bottom- 2011, you will see it stay flat for 25 years. You will never see values like you did in 05, 06 again in our lifetimes.
If you really loved the “Mammoth Lifestyle” that of which you blubber all over yourself of how great it is there, then go skiing and quit babbling about pathetic predictions and silly anectdotes to nowhere.
Hi all & Happy Holidays
As a former home owner in Mammoth
& a hopeful return, here are my thoughts
1)Mammoth has a very powerful entertainment land value, there is more to do in Mammoth than there is to do at the beach in SoCal
2)It is a place for a close knit family to buy a home for an investment in their family for generations to enjoy
As I see it Mammoth economy is the
ski area & real estate & it's support services
Mammoth needs to draw companies
that can manuf./distr. products
for a baseline in jobs that are
not based on the strength of
discretionary income
Why can't a medical products manuf.
setup camp in Mammoth
Give these type of companies taxbreaks etc for bringing their companies there
This is the only way Mammoth will support it self in the future
Again Mammoth is a very special place & I would think companies
would enjoy providing jobs in a
truly special enviroment
Mikey
Mikey,
That would be called RENO.
Imagine, you work for a medical manufacturer in upper management.
The company decides to move to Mammoth for a tax break. Now you child has to go to Mammoth public school with a bunch of ESL students.
Your thinking is good, or should I say dreaming. But idealistic. This would also ruin Mammoth as a whole.
Now wouldnt it make more sense for a company to move to a place such as Ogden Utah or Reno Nevada so they don’t get reemed on California business Taxes?
Cheaper housing in Utah.
Dont get me wrong, Mammoth is an awesome place. I love it, but one of the reason’s Mammoth is so great is because it is difficult to get to. If it were easy, everyone would do it (ie Big Bear)
Kinda like Telluride. Tellurinde doesnt have great skiing. They have good skiing, a very cool mystic town, but the draw is that it is difficult to get to.
LEAVE MAMMOTH ALONE.
IT IS GREAT THE WAY IT IS.
One another note, mammoth creates great friendships because you have to be particular with whom you travel 5 hours in a car with.
That is the psychology behind the draw. If someone says “Mammoth is too far” you most like will never ski with that person, and that separates the die-hards from the weak. Again, thats what makes mammoth great. It aint easy to get to.
The airport is a farce!
Cheers to the first commenter, who's done a stellar job of calling Paul on his incessant bu11shit. Ah, but how can you really blame Paul; he's got a wagon full of snake oil that he's got to get rid of somehow. Now, in the typical style of his parasitic occupation, he's telling us about the great deals available in foreclosures. Really?
The RE agents need to be run out of town. I'm not forgetting how they sold Mammoth to the wolves for years, and now they stumble around fighting for what's left of the carcass. They are indeed the agents of our current economic disaster.
From the Times today: "Standard & Poor's/Case-Shiller 20-city housing index released today fell by a record 18 percent from October last year, the largest drop since its inception in 2000. The 10-city index tumbled 19.1 percent, its biggest decline in its 21-year history."
Things to watch for in 2009? I predict the end of this blog and any further prophecies by our favorite Agent of Doom.
Read deep, think deeper.
………..oh, forget it.
One personality per post, please.
Read deep think deeper…
So profound.
Its all over our heads.
Whats between the lines Paul?
What I read between the lines is that there are certain traits clearly evidenced by civil, wise and mature men…and well…anonymous outbursts of undisciplined whining and name calling is not one of them.
I guess I could understand the vitriolic spewing if a realtor had put a gun to your head and forced you to buy an overpriced home over the past five years…otherwise I think it’s a simple case of inappropriately displacing anger on to others which should rightfully be placed on yourself.
Even if you didn’t buy but instead used your house as an ATM to feed mindless consumption you mistakenly let greed take control and not common sense.
Please take full responsibility for your own actions because it is the greatest act of self empowerment and it will serve you well in the future because it clears your head from the intoxicating weakness of victimization and helps you see opportunities lurking all around you.
Now go make it a wonderful new year! Wilbur
Actually, it’s my post above (8:16am), and I neither bought nor borrowed in the past 10 years. And while I may be cynical, I’m not blind. I’ve followed the situation in Mammoth for some time now, and I’ve lived in the area for most of my life, so please, don’t patronize me, Wilbur. Regardless, blaming the victim, while a common tactic of the privileged , is rarely productive.
And forget civility. If you really care about Mammoth, it’s time to take the gloves off and start fighting for your community.
I will admit, though; after reading some of Paul’s posts from 2006, I understand he’s not all bad. Perhaps just in the wrong profession. Cheers.
…”agents of our current economic disaster.”? Maybe, but not much in Mammoth. Our economic disaster has its roots in hazardous subprime loans that were too risky for borrowers that should have read and understood what they were getting into. Just as some that believe the market will never return, their judjment was clouded by thinking it could not retreat.
Blaming a realtor for this mess is akin blaming the checkout lady at Vons for todays hangover.
But the checkout lady at Vons doesn’t make commission on sales…
paul,
i second the motion to make the Hillside property into a park…great idea!
sorry junior but the subprime mess has leveled off. Now it the Prime, A Paper over extened greedy that are gonna get spanked. Like your neighbors who you thought made money actually have been borrowing off their equity enabling them to drive that fancy escalade to mammoth.
Say good-bye to the greedy!