Market Summary: July 6 – August 3
This newsletter is for the past four weeks. The local real estate market has been on the slow side and I went fishing. But now I’m back ready for the late summer and fall selling season (we hope). The Mammoth MLS is reporting 11 closings in Mammoth Lakes for the four week period. But realistically two of these sales were ~$40K storage units. After sitting on the market for years, storage units all of a sudden seem to be in demand. So really, only nine (9) residential properties sold ranging from a low of $150,000 to a high of $787,,000. This would have been a slow two week period, so this was a very slow four week period for the Mammoth market. During the period there were no REO/bank owned property closing and no short sale closings. Of the nine real estate sales, eight (8) were financeable properties and five (5) were purchased with conventional loans.
At the period’s end there are 134 condominiums listed for sale in Mammoth Lakes, an increase of only one (1) for the period. The low-end of the condo inventory remains void of attractive offerings. Only ten (10) of the Mammoth condos currently under contract are under $200,000. And three of them are lingering short sales. Finding a condo property with two sleeping areas in the ~$200K price range is increasingly difficult.
The best strategy for frustrated condo buyers is to make lower offers on higher-priced properties and hope for some price movement by the seller. But some sellers are still “skinny” (borderline underwater). As we head towards winter, buyers will become increasingly impatient. But sellers can become motivated too: some get weary of re-entering the rental pool or holding-on for another winter.
Single Family Inventory
The inventory of single-family homes is at 74, again up only one (1). So condo and home inventory is now stable with no significant increases. But there are only three (3) Mammoth homes in escrow between $400,000 and $1M. Savvy buyers are thinking that prices have become too aggressive to the side of the sellers. And buyers are NOT lining up now that multiple-offer scenarios happening are dwindling. The current residential inventory touts plenty of incurable defects and obsolescence. The sellers (and many listing agents) seem to think buyers will pay high prices for that.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up 17 to 57 at period’s end. Of the 57 properties in “pending,” seven (7) are “contingent short sales” and 28 are in “back-up” status. Five (5) of the properties in pending status are the new Greystone/Hooper homes on the Sierra Star golf course. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 22 to 86. So while closings were dismal for the period, there were new transactions put to escrow. Still less than one-per-day but there are signs of life. Some of this is just seasonal (really). But with winter on the horizon, the typical Mammoth selling season is about to begin (the first pro football game of the season is on TV tonight).
Market Updates and News
While a mini-remodeling boom is occurring in Mammoth and keeping the local contractors and sub-contractors busy, the long term effects of the dreadful winter are beginning create a strong undercurrent in the other local businesses. The restauranteurs and retailers are enjoying some good summer business, but the summer is suppose to be the gravy on top of winter. The economic stress isn’t highly visible but it is there. It is a long way to Christmas/New Year’s.
And there is this new class of “trust-funder businesses” in Mammoth that seem rather immune to it all. But the business owners and citizens of Mammoth have proven to be a resilient bunch over the decades. Most will survive, but some won’t. In a recent conversation with the publisher of The Sheet and the lack of real local news stories, he responded “everyone (local) is just worried about themselves.”
But there is good news. This past Bluesapalooza week and weekend was another major tourism success. But the event was once again plagued by heavy smoke from nearby forest fires. The smoke in town was horrible thick on Saturday, the biggest day of the event. What a shame. Eventually all of these visitors who come for this event will have the chance to experience Mammoth summer in all of it’s glory. Maybe next year. With the prosperity of Mammoth Brewing Company and their new tasting/serving facility at the old Whiskey Creek location, and their promotion of this great event, the continued success and growth of both is guaranteed. A great new one-two punch for Mammoth. Bluesapalooza week and weekend are now the biggest event of the summer.
There is evidence that some of the foreclosed and distressed properties “in limbo” due to a variety of title issues, etc. are beginning to see resolution. One such property was listed this last week. It has been sitting empty for over four years. And the number of distressed property bank-requested property inspections/evaluations is ticking up. It may appear that the log- jam created by all the State and Federal interventions is breaking down. Look for more bank-owned properties coming to the market, but more and more of them will be offered for sale on one of the online auction websites; plenty of fine print to read there. And frustration for buyers and their agents.
The Digital 395 project will be celebrating birthday #1 here soon but the celebrating will continue for most Eastside residents. Internet service only gets faster and more consistent here in Mammoth Lakes. I have both Verizon DSL and the Suddenlink program and both are very fast. But the residents of the outlying areas are reporting new and very fast service. Some of these areas have never had internet service before. And reports are that due to new systems and service agreements that are scheduled to be installed in the future, some of these outlying areas may end-up with speeds rivaling anywhere on the planet… Maybe telecommuting really will become a reality in the eastern Sierra after all.
Two noteworthy sales of older but nicely remodeled and upgraded condos bringing high prices. The sale of Mountainback #3 for $410,500. This 2 bedroom / 2 bath condo has a whole new kitchen with big granite slabs, slate flooring throughout, nicely remodeled bathrooms, etc. Earlier in the year a unit in the same building that had additional square footage, a den, and better light sold for only $305,000. But it was in original condition.
The sale of San Sierra #24 for $325,000. This 2 bedroom + loft / 2 bath condo was fully remodeled and “set-up” for rental. A bidding war pushed this value up beyond asking price.
The sale of 151 Red Fir for $765,000. This 3 bedroom / 2.5 bath and 2-car garage home sold for $630,000 just two years ago. The property was cleaner but no real improvements.
The sale of 3 Skyline Place for $787,000. This 4 bedroom / 3.5 bath 2-car garage “Hooper home” is 2,030 square feet and built in 2003. This sold for $387 per square foot (which is high). The buyer obvious appreciated the big Sherwin view and didn’t mind the tight, mixed-use neighborhood in Old Mammoth.
The sale of 359 Lupin St. for $315,000. Here are three historic “A” frame cabins on one lot. Sold for 105 X monthly rent which is cheap, except these are the classic Mammoth rentals that have high vacancy factor and typically need extra attention upon tenant move-out.
Other Real Estate News
The big news this week in real estate was the announcement that Zillow will be purchasing Trulia. Both of these companies are the popular online portals that consumers are using for real estate information. What makes this especially interesting???
- Neither of these companies has any profits. Their business models are to provide (free) rich consumer information and generate revenue from real estate agents by selling them very expensive advertising on their websites. (BTW, some of the Mammoth agents are really hooked on this program.) But these companies generate minuscule advertising revenues in relation the their market capitalization (stock price X outstanding number of stock). Because there is no cash involved in the announced sale, just the swapping of stock, this looks more like a corporate merger with survival as the goal. A bunch of people will be laid off. Trulia shares had come under heavy stock “shorting” in the past few weeks. Shades of the year 2000…
- While many real estate agents effectively advertise on these sites across the nation (and heavily here in Mammoth), most don’t grasp that the ultimate goal of these business enterprises is to gradually move the real estate agent out of the real estate transaction; basically, these agents are feeding the animal who wants to eat them. We’ll se how all of that works out.
- While the data on these websites comes from a variety of sources including public records and Google, the core and critical data comes from the agents themselves in the form of information and photos uploaded into the local Multiple Listing Service (MLS). And the agents own the regional MLS. And the agents are allowing Zillow/Trulia to use the data. But these websites are increasingly ignoring the copyrights and “proprietary” rights to this information. All of this is evolving into an interesting battle (or takeover) somewhere in the future. The National Association of Realtors sees it coming (and so does Wall St.). How it will end is anybody’s guess.
Thanks for reading!