Market Summary: August 12 – September 2

The Mammoth MLS is reporting 21 closings for the period in Mammoth Lakes. This was for a three week period and was only two more than the previous two week period. The range was from a low of $74,900 to a high of $816,000. The sales data reports only two (2) REO/bank owned property closings and eight (8) short sale closings.

Housing Inventory

At the period’s end there are 173 condominiums listed for sale, an increase of five over the previous newsletter. The inventory of single-family homes increased by two to 61. Residential lots listed for sale decreased by one to 44.

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is 73.  Of the 73 properties in “pending,” 34 are “contingent short sales.” Many of the “pending” listings in the MLS are in “back-up” status or actively looking for back-up offers. This tells me the listing agents aren’t real confident with the strength or commitment of the buyers in these transactions. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is 100.

Market Updates and News

The Mammoth real estate market is plugging along. With reports of increased real estate activity and year-over-year statistics in many markets in California and nationally, the data here shows that the Mammoth real estate market is active but in no way heated. But Labor Day weekend normally starts a period of increased activity as summer distractions wrap-up and the ski season is on the horizon. There does appear to be some buyer hesitancy in the market.

We can blame the uncertainty surrounding the elections (and the “fiscal cliff” issues) and the Town’s bankruptcy, but a lack of quality inventory is a big problem too. I know I’m not that enthusiastic about most of the inventory. And even some of the stalest listings are selling. Or maybe last winter’s drought has many potential buyers sitting on the fence; could it happen again or be part of a trend? (The warm water ocean currents that bring the “exotic” fish to the southern California fisheries–like right now–has been a harbinger of good snow years in the past.)

The big news is the Town and MLLA have purportedly reached an agreement in mediation. The fine points and detailed settlement are in the works and everything is confidential. This may take awhile, the attorneys have to run-up the bill some more because this party might be coming to an end. If this agreement comes to fruition the Town may not end up in bankruptcy after all. All of the other creditors have come to an agreement with the Town. This gets more interesting all of the time, but something tells me that this agreement won’t end it. We could only wish…

The sales data shows fewer REOs and a sustained number of short sales. The two highest sales for the recent period were both short sales. Again, more and more owners/sellers who in the past would never conceivably qualify for a short sales are doing just that. I’m a little surprised that more and more owners who purchased in the peak of the market aren’t giving it a shot. Meanwhile, the REO side of the business becomes more absurd every day. Mammoth doesn’t appear to be any different from many other real estate markets; we are slowly becoming a nation full of squatters.

Former owners and renters are squatting in properties that have been foreclosed on, some owners are squatting in properties without making mortgage payments for years, or they “negotiate” better deals with their lenders with no intent of making good on the new agreements so they can continue to squat. The more I see it first hand the more unbelievable it becomes. And all of it is enabled by the lenders and the government. Quality morals appear to be becoming a thing of the past. I don’t expect these conditions to change anytime soon.

After last issue’s discussion of ridiculous investors, an article last week from Real Estate Economy Watch reports that increasing real estate prices are now driving investors out of many markets–investor activity is down four percent in the last two months. The article quotes, “”Smart money” is beginning to leave from the market. Investors are having a hard time finding what they want. (We’re) Starting to see ‘dumb’ investors enter the market, the ‘smart’ ones are exiting the buying.”

I’m beginning to wonder; Will we ever see a “normal” real estate market again?

Noteworthy Sales

More ho-hum transactions. Fourteen (14) of the 21 closings were sales under $205K. And the next four were under $375K. So most of the closing activity for the past period was in the lower price points of the market (and the majority were not short sales). There is a slight downward pricing trend in these lower-end closings. The two short sales in the higher end of the market were good buys especially if considering the price-per-square-foot for the quality of the construction and locations.

But noteworthy? Okay, the REO sale of a 2 bedroom / 2 bath at Mammoth Ski & Racquet for $195,100. Why? This property sat on the market for well over 30 days and after the first price reduction the listing ended up having multiple offers (more than three) and was significantly bid-up. So again, why noteworthy? Well here’s the micro economics; low inventory meets hungry agents meets frustrated (and impatient) buyers and likely someone made a “less than quality real estate decision.” But as long as everybody is happy… shades of 2005.

Other Real Estate News

Mono County continues on without a seated Tax Assessor. The previous Assessor and assistant Assessor both quit a few months back. The Board of Supervisors is working on resolving the problem but the field appraisers sure seem to like not having a boss looking over their shoulders. Meanwhile, Tax Appeal hearings begin in October and the deadline to file an Appeal is November 30.

As Labor Day weekend fizzles off into the past, Mammoth as a whole can say we had a very fine summer. The weather was relatively warm like the rest of the country. But Mammoth is never that warm. The dry winter and spring almost made it feel like a very long summer, and summer can never be too long in Mammoth.

The music and alcohol related events that are now stacking up on almost every weekend through the summer are a huge hit and definitely draw visitors to town. And none of it seems to be getting out-of-hand. No hard core numbers are in but a straw poll of my fellow business owners reports that overall summer revenue is down. Transaction volumes were steady but visitors were simply spending less.

Thanks for reading!

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