Market Summary: September 2 – September 16
The Mammoth MLS is reporting only six (6) closings for the two week period in Mammoth Lakes. This is the lowest amount of closings in a two week period in the last year. The range was from a low of $39,900 to a high of $510,000. The sales data reports only two (2) REO/bank owned property closings and only one short sale closing. Only two of the Mammoth closings were over $130,000.
At the period’s end there are 171 condominiums listed for sale, a decrease of two over the previous newsletter. The inventory of single-family homes decreased by six to 54. Residential lots listed for sale remained the same at 44.
The total number of properties in “pending” (under contract) in Mammoth Lakes increased by seven to 80. Of the 80 properties in “pending,” 30 are “contingent short sales” and 15 are in “back-up” status, or actively looking for back-up offers (as I said in my last newsletter, these listing agents aren’t real confident with the strength or commitment of the buyers in the “back-up” transactions). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) increased to 107.
Market Updates and News
The Mammoth real estate market is slow, especially for this time of year. If you have ever spent any time with me as a buyer or seller of real estate, you have probably heard me babble-on about how Mammoth’s real estate market seasonally cycles. It has happened every year without much divergence over the past three decades. The fall selling season/cycle is the most active and profound here in Mammoth. It is all about the “anticipation of winter.” Buyers especially want to be settled (and dialed-in) before the the end-of-the-year holidays.
Mid-September should be very active, but right now the market has plenty of hesitation. The sales data shows, and it certainly feels that way. BUT, the inventory isn’t great either.
Aggregate numbers of available condos and homes are down about 30% from the norm for this time of year (Labor Day is typically the seasonal peak of inventory in this market). And compared to the past four years, there are fewer REO properties on the market to pique buyer’s interests.
The current election nausea and general economic uncertainty can’t be helping. Quite frankly, I’m surprised were aren’t seeing more old-time owners as motivated sellers trying to take advantage of the current capital gains tax scenario.
Still no word on the settlement between the Town and MLLA. The casual rumors around town are that it will be around $20 million over time. That was purportedly the original offer by the Town many months ago. We’ll see. The big question in my mind is; What role will the Ski Area have in the settlement, if any? Lest anyone forget, Hot Creek originally sued the Town and MMSA/Rusty Gregory simultaneously over this matter. There is a legal hold on the Ski Area’s case subject to the settlement of the Town’s. And Starwood would be hard pressed to sell the Ski Area without that resolved.
While I am fundamentally opposed to the recent “QE3” action by the Federal Reserve (it will cause far more economic problems than solve), the action may provide great benefit to many of Mammoth’s second homeowners or potential second homeowners. The new QE3 policy should drop mortgage interest rates down even more. That’s great if you can qualify. But many of Mammoth’s property owners or future buyers have real income and CAN actually qualify for a loan, even with today’s stringent guidelines.
Many of the cash buyers of the past few years may consider putting a very low interest rate loan on their property. Or maybe there will be another worthy opportunity to re-finance. And for future buyers, lower interest rates make the other costs of ownership easier to swallow…
Many years ago one of my clients had a saying, “the best earthquake insurance is having a very large loan.”
Meanwhile, now that this new Federal Reserve action is back- filling the mortgage lenders on an “ongoing basis,” one thing I haven’t heard anybody talking about yet; Will this now allow the lenders to move at a more aggressive foreclosure pace on the millions of squatters in this country?? Hmmm… could be. This should now allow the banks to keep their balance sheets healthy as their (non-performing) assets get re-valued. More we’ll see… But some of these non-performing mortgages are starting to head into the five year range. And did these owners stop paying their property taxes before they stopped paying their mortgage?? I know Mono County’s list of tax defaulted properties is growing large.
The closed sales for the period are really quite boring. The two higher-end sales were both in the later phases of Snowcreek and represent sale prices at a small but significant reduction over previous sales of the same model/floorplan. So values/prices are not screaming back up as so many California industry cheerleaders would want you to believe. But there aren’t enough recent sales to really be statistically significant. Mammoth real estate is in a bit of a stall, but that can easily happen in a discretionary market, especially when the inventory is in it’s own stall.
Okay noteworthy; the low sale of the period ($39,900) is a vacant residential lot; good-sized lot within walking distance of the Village, drop-off topography but certainly build-able. The seller will have a gain for tax purposes. But why noteworthy?? It shows how soft vacant land values are even tough there isn’t much inventory. It also shows that home buyers (and condo buyers too) are purchasing today at below-replacement values, especially considering the new and costly fire regulations (namely sprinklers). This isn’t likely to change anytime in the near future.
Other Real Estate News
Amazingly two new projects have broken ground in the past weeks. The first is the new Gateway sign. This controversial project places new monument signs on both sides of Hwy. 203 as you enter Mammoth (just in front of the new court building). This project has had huge support from the Ski Area, Snowcreek, and many private donors. The new signs are LARGE–a new “entry statement” or front door for Mammoth Lakes. In light of the BK, etc., the comedians should have a field day. Thank God some people have vision.
Secondly, the Rock N’ Bowl has broke ground. This is very exciting and positive for the community. This is now being built on the lot between the new Cast Off building and the SCE building. This property faces into the Forest Service strip below Mammoth Creek Park. They estimate a year to complete; 12 lanes of bowling, indoor driving (golf) range, other modern electronic entertainment, and a restaurant and bar with views out over the Park and to the Sherwins. Designed by local architect Bruce Woodward and built by local contractors. A local family is developing and will operate. What surprises me is that some NIMBY or environmental group or government bureaucracy didn’t screw the progress up. But the foundation is in and that means “vested right,” and the owner is also an attorney.
Thanks for reading!