Market Summary: September 16 – September 30
The Mammoth MLS is reporting only 11 closings in the two weeks in Mammoth Lakes, only five more than the previous newsletter which was the lowest amount of closings in a two week period in the last year. The range was from a low of $157,500 to a high of $765,000. The sales data reports two (2) REO/bank owned property closings and two (2) short sale closings. More than half the closings were under $275,000.
Housing Inventory
At the period’s end there are 164 condominiums listed for sale, a decrease of seven (7) over the previous newsletter. The inventory of single-family homes increased by one to 55. Residential lots listed for sale decreased by one to 43.
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes increased by three to 83. Of the 79 properties in “pending,” 25 are “contingent short sales” and 16 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 by three to 110.
Market Updates and News
The numbers don’t lie, the Mammoth real estate market is slow and especially relative to what time of year it is and the reports of strong sales activity in other California markets. In the last couple of days there seems to be a bit more activity, but maybe that is just me. The inventory remains low. I do see the evidence of “frustrated buyers” in the market. These frustrated buyers may be getting anxious and can become willing to make serious purchasing compromises. Hungry agents can “sell” them. I hate to see this but as one of my old, favorite broker/mentors use to say, “that has been going on since the beginning of time.”
The really big news out of Mammoth this week was the announcement of the details of the mediated settlement with MLLA and Terry Ballas/Hot Creek Aviation. The details can be found at the Town’s web site or your favorite Mammoth news outlet. I posted my immediate comments in a blog post last week.
The first most important item is that the Town WILL NOT be proceeding with bankruptcy. The televised special meeting last Thursday was quite informative. The bankruptcy attorneys were clear and concise in their explanations. The Federal bankruptcy judge who handled the mediation spoke via teleconference. All of it very beneficial for understanding the process and outcome.
Besides the financial hit to the Town, what the settlement does is:
- Keep the Town out of bankruptcy and all of the related expenses, which would have been substantial. Attorney and legal expenses were estimated to have a “burn rate” of $1M per month and the parties agreed that it would have been a protracted process.
- The mediated agreement ties up all the “loose ends” including those with Terry Ballas and the FBO at the airport. Ballas will continue to run the FBO.
- The Town recovers (from Ballas) all development rights at the airport. Those are considered “substantial” and could in the future help alleviate the financial burden of the settlement.
The challenge now is budgeting for the additional annual expense to pay the settlement. The Town Council got right to the discussion in the second half of Thursday’s meeting. They announced the lay-off of numerous personnel including several police officers. Looks like they consider the police to have the fattest pay contracts, at least right now. Next they announced cutbacks in recreation facilities, etc. There are more meetings this week and the weeks to come.
Basically, Mammoth is now being forced to be a model of scaled back government. Maybe we can show the state and federal government how it can be completed successfully. The cut-backs and re-budgeting are likely to be the local headlines for the next few months. Stay tuned.
A small but interesting anecdotal market observation; the fall is not only a period when buyers typically want get settled in, but it also a high-demand period for those desiring long term rentals. It is all about winter. Right now the classifieds are full of rentals BUT there are also almost daily emails from local real estate agents advertising (for their clients) rental units that are nice AND furnished. Looks like many condo owners with solid rental units are hedging for a good long-term rental as opposed to a successful nightly rental season.
Could this be a new sign of stress in the market? Or just the leftovers from a dismal winter?
Noteworthy Sales
More ho-hum sales during this period, but here’s a noteworthy one; the sale of a 2 bedroom / 2 bath condo at Mammoth Green for $240,000. Ouch. This is not an REO or short sale. MG was the first Intrawest project built in the Sierra Star golf course area. These 2 and 3 bedroom condos have understructure parking, nice pool and spa and great fairway setting. Also a reasonable walk to Eagle Express. These 2/2 units originally sold for around $350K in 2001. But the cement-fiber siding used at the project has deteriorated horribly and not only looks bad but is also part of the project’s litigation with the developer. This is a one-two punch value killer. The buyer looks at the cheap price and is willing to take the future risk.
The REO sale of Grand Sierra Lodge #1406, this oversized 2 bedroom / 2 bath condo in the Village for $405,000. This was a good buy, this oversized floorplan is really nice; a larger living area, nice decks, a half bath/powder room, etc. And on the north side of the building so it won’t heat-up in the summer or be noisy from the plaza. Maybe a little noise from the GSL entrance…
Other Real Estate News
From my “can’t believe this sh!t” file, a recent eviction made me go back and do some research and the squatters had not made a mortgage payment in almost four years AND they stayed in the property for 12 months after the foreclosure (and this IS becoming more and more commonplace). The property declined in value a good $300K during all of this…
Or how about a short sale approved on a non-owner occupied (modern) fourplex AND the seller is receiving a $30K bonus to complete the short sale (buyer bought this property thinking “projected rents” not actual rents. And you, Mr. Taxpayer, bailed these banks out…
A recent press release announced that Fannie Mae was ending all of their third party asset management relationships because they had reduced their REO inventory down to a manageable level. Perfect. They’ll let all these third party asset management companies lay people off and unwind their organizations and then the level of REOs will likely jump again and Fannie Mae won’t be able to handle the volume. This REO cycle may last until 2020.
Meanwhile, those watching the “fiscal cliff” issues AND Mammoth real estate may want to pay special attention to the military cutbacks. If they go as currently planned, significant cuts will be made in So Cal industries and San Diego based operations, shades of 20 years ago…
Thanks for reading!