Market Summary: December 23 – January 6
The Mammoth MLS is reporting 17 closings in Mammoth Lakes for the period ranging from a low of $90,500 to a high of $3,100,000. There was a small end-of-the-year push to close escrows and a couple of straggling “holiday” purchases. The sales data reports two (2) REO/bank owned property closings and five (5) short sale closings, almost identical numbers to the previous period.
Housing Inventory
At the period’s end there are 128 condominiums listed for sale, down another six (6) from the previous newsletter. The inventory numbers are somewhat skewed the first week of the year because some listings expire at the end of the year and drop from the inventory numbers. I took some time and scrutinized the condo inventory. I wanted to count the units I considered “unrealistically priced” in the market; either price compared to recent sales, and/or days-on-market (one has 1759 days on market??), or whatever else jumped out at me.
I counted 45 condos that are currently listed that are simply unrealistic to the market. Some are good properties with unrealistic (but patient sellers). Some are short sale offerings where the sellers actually want to squat (and not engage a buyer). Some are just pretty undesirable properties that will only sell if deeply discounted. But take the already low inventory and subtract the “unrealistic” units, and the condo inventory in Mammoth is very low.
The inventory of single-family homes is less one at 43. Residential lots listed for sale are down to 28.
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes decreased by 14 to 51 (that may seem dismal but not too many properties typically go to contract during the holidays). Of the 51 properties in “pending,” 14 are “contingent short sales” and only six (6) are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) decreased to 72. Again, pretty normal for this time of year.
Market Updates and News
Finally, some really good news for Mammoth. The drought for the holidays of last year took an about-face this year. Mammoth was touted as having “the best ski conditions in the United States” during the holidays. The Mountain reported 147 inches of snow in December (and the conditions were actually pretty decent before that). That is the second largest snowfall in recorded Decembers.
The Mountain is also reporting “record” attendance. No report on actual revenues but they usually run pretty close. The town remained busy through this weekend and relatively large crowds are expected through the next week. All-in-all, an excellent period of visitation and the economic windfall for Mammoth that the holidays need to be.
With the heavy snow and crowds came very cold temperatures through the holiday period. Many days experienced below freezing temperatures as the high for the day within the town limits. Some outlying areas were even colder. Utility bills will be high for the period. With heavy occupancy and usage and very cold temperatures, large ice damning and icicles have formed all over town. Properties certainly need to be looked after (managed) during these periods. This is when condo owners can appreciate their managers.
The holiday period certainly brings an interesting group of people into Mammoth. Traditionally, it is not a great period for real estate. It can be a period of emotion and impulse. Quite frankly, the majority of real (potential) buyers don’t come during these periods. A good portion of existing owners will come during some part of the holiday, and usually those with school-aged kids. And many owners want the high rental revenue the period can produce. Others just want to avoid the crowds. They will come later.
In fact, it seems the longer one lives or owns in Mammoth the more likely they are to want to leave during all of this madness. And many local residents do if their livelihood isn’t dependent on being here.
The last couple of weeks we experienced some “low-ball” offers on good short sale properties. Many of these offers go nowhere. The buyers seem anxious to tie-up their low-ball offers. These buyers aren’t being educated by their agents that the values have to be well documented in a short sale. It doesn’t mean they can’t get a good price, but a ridiculous discount isn’t going to happen, at least not at the start. Listing agents have to put a great deal of work into a short sale. They really don’t want to engage with a buyer who will be a pain-in-the-ass. The lenders and their process vet the valuation through multiple broker price opinions and/or appraisals.
The short sale process itself takes time so the buyers can’t be in a hurry. The buyer has all inspection rights but the seller isn’t likely to be making too many (if any) repairs. The documentation of the transaction has to be “clean” so all the monkey business has to be eliminated from offers. Many of these buyers like their “cute” provisions they learned on late-night TV. It just isn’t going to cut it in a short sale. Especially if the listing agent knows there are solid buyers looking at the property.
The media in southern California is reporting that real estate “flipping” has returned to that market. But the real opportunities appear to be coming with greatly deteriorated properties in good or upper-end neighborhoods. Here in Mammoth, I can’t think of a single property that has been flipped in the past five years. Plenty of deteriorated properties (mostly REOs) have been purchased and fixed up, but none of them resold.
Noteworthy Sales
The REO closing of 184 Waterford at $507,500. This modern built 4 bedroom / 3 bath home looks like a great value on paper. The home was in pretty good shape but in need of paint, carpet, and some repairs. But the value killer was the location; corner lot in Old Mammoth with commercial lodging and apartments across the street, the Water District station next door, and affordable housing adjacent. What makes this especially noteworthy is this was handled through the latest iteration of REO sales methodology; online auction, asset manager in India, etc. I’m working on a new blog post that will discuss this (look for it in the near future). Another “expect the unexpected.”
The sale of two large units at The Lodges, both over $1M.
The sale of a residential lot on Grindelwald St. for $125,000. This lot has been on the market for years. It backs up to Forest Service land. The key reason it hasn’t sold is the upsloping topography. Upsloping lots are the most expensive (very) to build on and once you’re done you have no place to push/store snow. So most contractors will tell you to expect at least $100,000 in additional building expense…
The $3.1M sale is an interesting one for several reasons. This 5,000+ square foot home right on the ski run (Eagle Express) is one of the finest locations and homes in Mammoth. A true mountain home (it appears as backdrop for a Corona beer commercial). A similar vacant lot sold this past summer for $1.6M. This home is almost 20 years old but has all of the special, custom features you would expect. Minus the lot value, it sold around $300 per square foot. It sold for almost exactly the same price it sold for eight years ago (2004). It was the perfect home to rent.
Other Real Estate News
The Debt Forgiveness Act of 2007 was extended as part of the recent Cliff deal. So the primary residence owners who complete short sales or get foreclosed on in 2013 will be safe from an eventual 1099 from their lenders. Capital gains taxation appears to be staying the same for some and rising for others.
The New York Times reported over the weekend that another major settlement is in the works between the major banks and the government; this time over purported foreclosure abuses, “no accountability for financial institutions and little help for borrowers.”
Thanks for reading!