Market Summary: April 8 – April 22
The Mammoth MLS reports 10 sales/closings in Mammoth Lakes for the period ranging from a low of $72,000 to a high of $1,685,000. The sales data reports that three (3) were REO/bank owned properties and three (3) were short sales (more consistent pattern here; 60% of all sales in the past two weeks were either REOs or short sales). Two of these short sales were high-end homes in The Bluffs making three total in the past month.
Who ever dreamed that these types of high-end properties would ever become short sales?? Weren’t these owners suppose to be “rich” enough to able to qualify for multi-million dollar loans??
Overall, this was a slow real estate period, but income tax preparation, marginal ski conditions, etc. can impact this market. But my bet is the dry winter has impacted the market more than we will ever know. I have always said that real estate sales are a “function of people in town” and the visitations have been way down this winter.
At the period’s end there are 160 condominiums listed for sale, a slight increase. There are now 58 single-family homes on the market in Mammoth Lakes proper, another slight increase from the last period. There are 33 residential lots listed for sale. The residential lot market remains stagnant despite seller price reductions.
The total number of properties in “pending” (under contract) in Mammoth Lakes is 61, another decrease. Of the 61 properties in “pending,” 31 are “contingent short sales” which means they are pending short sale transactions. (Again, these properties show as active listings to anyone looking at IDX MLS information.) The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) increased to 90.
Market Updates and News
The potential Town of Mammoth Lakes bankruptcy is coming to a head. The State mandated mediation process is moving into the actual mediation phase. It will be quite interesting to see where the mediator goes with this and ultimately “recommends” or attempts to influence upon the parties. Meanwhile, the press continues to dig into the story. This weekend’s The Sheet contains a lengthy article including interviews with past Town Managers and Council members. It is a very good read, and it is available online. But in the day-to-day real estate market,(potential) buyers appear more concerned about the lack of inventory (can’t find what they want) than the potential (or likelihood) of the Town’s bankruptcy. Or maybe most just consider it a given.
The Town’s enforcement of illegal nightly rentals in prohibited residential zones and the collection of bed tax (TOT) has become real in the past six months. I am already seeing residential properties (single family) come to the market where owners had intended to rent nightly to generate revenue and now don’t want to have to operate in secret. I have witnessed the Town’s aggressive pursuit of owners actively marketing for rentals online.
The Town is also pursuing legal rental operations that have not been paying TOT, or may not be paying sufficient TOT. An announcement in this week’s Mammoth Times states that the Town has processed 170 enforcement cases since last August and that they intend to now go after property owners who have not been remitting TOT. The announcement states that over 100 assessments of unpaid TOT will be sent out shortly to property owners.
The volume of foreclosed or bank-owned property (REO) coming to the market has slowed. This office has seen a 50% or more decline in properties in one phase of pre-listing, marketing, or escrow. The lenders have simply slowed the foreclosure pace. For us it is giving us a chance to catch up on work, the last eight months have been very busy. While short sales have become more common, the media continues to state that the next big wave of foreclosures is coming.
In Mammoth, I know there are still plenty of distressed and underwater property owners. I also know they are being solicited for short sales by local agents. Regardless, many sellers, as well as many buyers, remain hesitant about dealing with short sales. It is truly unclear as to how the balance of 2012 will play out. God knows nobody wants to lose any votes.
The REO sale of St. Moritz #3 for $177,000. This 2 bedroom + loft / 2 bath town home style condominium represents the “buy” that many are looking for. This would qualify as a large “crash pad” property because it has plenty of room for beds and utility. The condo project also has a nice pool and spa area and a big recreation room, so the package can accommodate numbers. This property needed some work like paint, flooring/carpet, etc., but this is a good, typical “bang for the buck” purchase.
Another 2 bedroom / 2 bath REO sold at Solstice for $247,000. This project is probably ground zero for the crash in values; sold by Intrawest at the peak of the market, these units also have very high HOA fees due to the radiant heating in the units included in the monthly fee. This turns many buyers away. The project also has a minor construction defect lawsuit prohibiting buyer financing. But this pricing for an almost new condo is still cheap.
The aforementioned two closings of high-end short sales in The Bluffs. These were both owner-occcupied homes at one time. Both had original listing prices more than double their eventual sale prices. Both were beautifully built custom homes. These are great buys for the buyers. These sales certainly don’t help high-end home values in Mammoth. How many more of these are coming?
Other Real Estate News
The National Association of Realtors recently released a summary of vacation home information for 2011. Vacation home purchases were at the highest level since 2005 and they accounted for 11% of all purchases across the country (up from 10% the year before). Forty-two (42) percent of all vacation purchases were made with cash. And 39 percent of all vacation home purchases were considered distressed sales.
“Lifestyle” continues to be the primary motivation for purchasing a second home and the buyers of vacation homes are typically 50-years old or more. There are currently 42 million people in the U.S. between the age of 50-59. U.S Census data reveals there are 8 million vacation home in the country and 75.3 million owner occupied homes.
Thanks for reading!