Market Summary: October 6 – October 20
The Mammoth MLS is reporting 18 closings in Mammoth Lakes for the period ranging from a low of $91,000 to a high of $940,000. That is seven (7) fewer closings than last period . Nine (9), or half of the closings were condos selling for less than $190,000. So the low-end of the condo market is getting closed out… During the period there were two (2) REO/bank owned property closing and only one (1) short sale closing for the period. At this point in the market, most of the remaining REOs are Fannie Mae owned (you and me) properties. The bulk of the REOs will now be sold through websites like Auction.com and Hubzu.com. That is until they decide to do something even more dysfunctional (I will have a new Mammoth Foreclosures post on the blog site soon; lots of changes in this part of the real estate market). The one short sale took four months to close from the time of contract, through bank approval, and to complete the escrow.
At the period’s end there are 108 condominiums listed for sale in Mammoth Lakes. So that is up by four (4) from the last period. There are only five (5) condos listed for sale under $190,000. There are some short sales available in the low-end of the market but buyers appear to be reluctant to enter a short sale this time of year; buyers want quick gratification as winter approaches .
Single Family Inventory
The inventory of single-family homes is down five (5) to 45. More of the same except a few properties are being turned into winter rentals. Buyers remain frustrated in the lack of inventory. Most are just resigned to wait-and-see. Sellers are occasionally getting lucky. My saying that “Mammoth is a “don’t-have-to-buy, don’t-have-to-sell” marketplace” is evident in the single family market. Months (and sometimes years) on the market doesn’t bother sellers. And the longer buyers wait the more educated they become. There certainly aren’t any “good deals” to be found at this point. Vacant lots are stagnant again.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down again by two (2) to 51 for the end of the period. The velocity of sales has slowed and that normally doesn’t happen as we head towards winter. The lack of good inventory and two marginal winters have to be the explanation. Of the 51 properties in “pending,” seven (7) are “contingent short sales” and 17 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) decreased by three (3) to 71. And even the Bishop agents are complaining about a lack of sales. There just isn’t good inventory down there either.
Market Updates and News
Mammoth is experiencing glorious Indian summer; blazing Fall colors and high temperatures in the 60’s (this newsletter might be short because I’m heading outside!). A handful of visitors are here to take it in… Those out fishing in the creeks and rivers are reporting exceptional fishing due to low water and hungry fish. Now if they could just plant some wahoo for me… I was in Footloose this past week and they had almost all of their skis and skiwear already on display. The new Wave Rave store in Bishop is a month away from opening and is looking good. Look for it across the street from Meadow Farms.
The first TBID tax filings are due from local businesses and the upheaval is beginning. The visitors don’t seem to notice, but the local business people that have to make filings (and perform the accounting) do. Some have already formally appealed their “local business” status and other have hired attorneys. The more this goes on the more it will all point back to the Hot Creek/Airport settlement and the meddling by Ski Area officials. Wait until the skiers have to pay the tax on their lift tickets (2%) and they discover it is a bail-out of the Ski Area’s drive for air service. Meanwhile, I bought two cheap bottles of wine this week at VONS and noticed the TBID tax was 17 cents.
There are still plenty of distressed and underwater properties out there including in Mammoth. But Trustee Sale filings are minimal and hence the number of REOs. The new REOs are predominantly going to come to the market via online auction. We have managed some of these assets already under the new “system” and the process is a disaster. Sincere (and willing to overpay) buyers have already become leery, skeptical and put-off of the completely non-transparent process. The more I see of coming Dodd-Frank regulations (see below) the more I believe this is one of the outcomes; the banks are just dishing these assets off to third party people so they have no liability or compliance needs. So far, the process is a failure locally.
Meanwhile, Mammoth short sales are down to a minimum too. The Debt Relief Act of 2007 that was originally scheduled to sunset on 12-31-12 and was extended a year is now scheduled to sunset. We’ll see if the folks in DC find it necessary to extend again. This doesn’t help most of Mammoth property owners because it only applies to primary residences. But there are still some locals who could benefit from this, but they are mired in loan modification hell (and delusion). What I am experiencing is those sellers (second homeowners) who completed short sales in the last 18-24 months reporting that their FICO scores are now actually higher than before the sale; the big debt is now off their record and the short sale had no lasting derogatory affect. Some are looking to purchase again in Mammoth, albeit at lower prices. But they still had to weather the 1099…
From the “life is getting easier in Mammoth” file… Internet speeds are for real here in Mammoth and the show has just begun. Suddenlink is way out ahead but Verizon is gearing up and some other third party providers are also in the wings. This winter’s visitors will be pleasantly surprised. The condo they rent might even have Netflix… In the past two weeks I ordered items twice online and they came in the door the next day, one by UPS and one by FedEx. I didn’t pay for expedited shipping. Pretty impressive.
Not too many noteworthy sales this period. With half of the closings under $190,000, I see my old term “crash pads” coming to mind. But the closed sale prices display more of the “some up, and some down” market trend. I don’t see any of the nine low-end closings that I would say overpaid. They all appear to be at market or below market.
A Sunstone 2 bedroom / 2 bath closed for $365,000. This property had the big view and easy access to the ski run. And Sunstone has financing. This was a “down” price. On the other hand a 2 bedroom / 2 bath at Lincoln House closed for $460,000. This unit overlooked to pool and lagoon area, and had some upgrades, but every time I showed it people thought it was dark. That is a big disparity for similar condo hotel properties. Personally, the Sunstone is smaller but much more enjoyable.
Somebody paid $182,000 for 2 bedroom + loft / 2 bath at Courchevel. This might appear to be a good deal but the unit had loads of long-term moisture damage. I hope the buyer is a contractor, or has one in the family.
Other Real Estate News
Speaking of Dodd-Frank regulations (and they will have a major impact on the real estate industry in the coming years), I was speaking to the boss at Inyo-Mono title the other day and he was incensed. Now understand, Inyo-Mono Title has the only title plant in our two counties and issues most of title reports/insurance in the area. They also do the majority of the escrows. But Dodd-Frank regulations are imposing new security requirements on all employees who “touch” any part of an escrow or title work including all 3rd parties (even the courier who runs documents to Bridgeport!). They are also going to be subject to outside auditing on a regular basis. All of this comes at a cost, both time and dollars. Expect the cost of real estate transactions to go up everywhere.
Condo hotel financing appears to be easing. While Fannie Mae is still redlining properties with heavy vacation rental presence, the private money and portfolio lenders are becoming more aggressive. The down payment requirements are coming down as well as general qualifying. And rates are coming down. Obviously, they believe the pricing bottom has been struck and occupancy rates are rising.
Thanks for reading!