Market Summary: January 20 – February 3
The Mammoth MLS is reporting 9 closings in Mammoth Lakes for the period ranging from a low of $101,111 to a high of $935,000. That is one less closing than the previous period and a total of 19 for the past four weeks. The sales data reports one (1) REO/bank owned property closing and three (3) short sale closings, identical for the previous period. This slower period balances out the busy-ness of the pre-holiday period and is a typical January trend in the Mammoth real estate market.
Housing Inventory
At the period’s end there are 111 condominiums listed for sale, down another 11 from the previous newsletter. The inventory of single-family homes is down two (2) to 40. Residential lots listed for sale are still at 28. Another slow decline of total inventory. This is a typical seasonal trend in Mammoth but usually not to this extreme. The low-end of condo and home markets are especially empty of decent inventory. This should impact the overall volume of sales in the coming months.
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes increased by four (4) to 66. Of the 66 properties in “pending,” 13 are “contingent short sales” and 15 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) decreased by 1 to 93. The unusually high level of real estate activity in early January slowed down in the latter half.
Market Updates and News
This office experienced some down-right bizarre behavior from a variety of (potential) real estate buyers during the past pre-full moon and full moon period. Thank God we are past that. The full moon is the only explanation, unless Starbucks was putting something in their coffee. People were in near panic mode to write offers on particular properties, driving from southern California just to do so, then switching to other properties, only to disappear and not respond to emails or voice mails. And there were other odd episodes…
One caller, without even introducing himself, insisted I write an offer on a property at “his number.” Apparently he wasn’t satisfied with the response from another local agent about the likelihood of “his number” being a viable offer, or even one worth the seller responding to. The problem; he was comparing apples to oranges. He was using a strict price-per-square-foot analysis for two different floor plans within the same condominium project. He was trying to apply the per-square-foot value of a larger unit to the value of a smaller unit (3500 sq ft versus 2500 sq ft). His rationale worked to get the price where he wanted it, but the opposite position (that is of the seller/developer) is quite different.
One way to explain it (this is the way a contractor would explain it); there are significant construction costs in the kitchen and bathrooms. In that respect, both properties are fairly equal. The additional square footage is the “cheap” construction; the extra bedroom, loft, den, larger living room, oversized entry, etc. Appraisal theory utilizes functional and economic obsolescence to diminish the value of that extra square footage.
Local appraisers cringe when buyers assess properties on a strict per-square-foot analysis. But many buyers utilize this as their primary evaluation. Even worse is when they add in some erroneous information from Zillow. Many of these (potential) buyers simply never buy because they don’t get their way. Every real estate agent should have the experience of sitting on the County’s Tax Appeal Board (like I have since 2004) because listening to appraisers argue valuations can be very enlightening. While appraisal remains an art and imprecise, true mistakes become glaring.
While frequent visitors to Mammoth have noticed the improvements along Old Mammoth Road to the Rafters and now Red Lantern and Jimmy’s Taverna, what they may have missed the past few months is the renovation work at the Sierra Nevada Inn. The work is just about completed and owners Jim and Nancy Demetriades are touting that the new “Sierra Nevada Resort” will offer the finest accommodations in all of Mammoth, “even better than the Westin” according to Jim. And he’s probably right. The “Resort” now has three restaurants, four bars and 150 completely renovated rooms, all on their six acres on Old Mammoth Road.
Everything has been beautifully renovated. The rooms have been upgraded down to extra insulation and soundproofing. Most rooms now have fireplaces and the bathrooms have heated floors. Jimmy’s, which opened right before the holidays, features Greek seafood and a wood fired grill. The Resort even built it’s own laundry facility to service high quality linens. These owners have great taste and the capital to back it up. Expect a major marketing campaign to be launched any day now. So what had become an eyesore in Mammoth is now a beautifully re-developed hotel, foodservice and entertainment facility. I have to believe the property owners in the vicinity will certainly benefit from these improvements and the forthcoming marketing.
Noteworthy Sales
The sale of Cabins #2 at $315,000. This 2 bedroom / 2 bath was a short sale and didn’t include the expensive furnishing (they were sold separately). We could have sold a dozen of these units. The interest level in this property was very high. The Cabins might be the best project built by Intrawest during their time, there is no lingering litigation nor any apparent problems with the project. It has a lovely setting on the Sierra Star golf course. These units sold in the $800K range at the peak.The sale of Stonegate #4 for $935,000. This is the smaller floor plan. This project located on Minaret Road has taken years to finally sell-out. There is one unit remaining. A unit of the same floor plan sold in 2008 for almost of $1M more than this.
What else? A couple of mid-range homes, a couple of cheapie condos…
Other Real Estate News
Internet access continues to be an increasing problem in Mammoth Lakes. There is currently no new cable or dsl service available. There hasn’t been any for quite some time. This is a huge problem for new businesses or second homeowners who rely on service for business. This issue has become a major negotiating point in real estate sales in the past 12 months. Some service can be transferred, some can’t. Wireless Internet and phone goes almost dead when the town fills up with visitors. And forget pushing large files. But there is hope.
Verizon recently upgraded to 4G in Mammoth and wireless service has improved significantly. Meanwhile, the trench diggers were back in the High Sierra this last week laying cable for the Digital 395 project. And the “last mile” enterprises continue their work. Hopefully, someday soon we will have excellent service and take it all for granted. I’m told that when that happens all the rich young geeks from Silicon Valley will be here in droves…
The local Wells Fargo loan officers were in the office last week. Wells Fargo has been a primary lender in Mammoth the past 23 years and have been critical to establishing “project approval” for many of the condominiums in Mammoth (quite an important task). They have been our go-to lender the last five years, especially for our most qualified clients. The loan officers were not positive about the lending environment for the upcoming years; expect more difficulty and even stricter standards.
Thanks for reading!