Market Summary: August 31 – September 14
The Mammoth MLS is reporting 13 closings in Mammoth Lakes for the two week period ranging from a low of $132,500 to a high of $990,000. This is three (3) fewer closings than the previous two week period. During the period there were no REO/bank owned property closings and no short sale closings. Of the 13 real estate sales, seven (7) were financeable properties and all seven were purchased with conventional loans.
At the period’s end there are 136 condominiums listed for sale in Mammoth Lakes, a decrease of 12 for the period. The decrease was a combination of units selling (going to escrow), listings expiring and a couple of cancellations. There were some new condo listings during the period. And there were a dozen or so price reductions during the period. Findings a condo with two sleeping areas under $220K remains a huge challenge.
The only one currently listed under $200K is an amazing time-warp… step inside and take a journey back to 1969! Condo buyers now looking for three sleeping areas in the low $300K price range are challenged too. These have been two very active market segments in the past, the “bread-and-butter” deals for local agents. Many potential buyers have been priced-out of the condo market.
Two of the new condo listings are obvious “flips” and they ARE in pretty nice condition. The same seller and they were purchased in the last year or so. They are priced a little high but with their very nice condition and the pre-winter timing and the lack of low-end inventory, they will probably sell. The back-of-the-envelope math doesn’t show me that the flipper will make that much money. The condo he bought at the best price he had to put too much money into. And he had to win a bidding war. Flipping in Mammoth has never been an easy game. And especially if you live 3-400 miles away.
Single Family Inventory
The inventory of single-family homes is down one (1) to 66. More price reductions in this segment of the market. And many more needed. The market is saying this inventory will not sell before the end of the year. The asking prices are too high, there is too much obsolescence, and too many incurable defects. Most of these homes are in the $550K to $1M range. Any single-family homes listed under $500K gather immediate attention. In this part of the market, buyers are willing to make serious sacrifices to own a home.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up four (4) to 67 at period’s end. Of the 67 properties in “pending,” five (5) are “contingent short sales” and 36 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up two (2) to 89… Positive activity in the local real estate market but not that impressive considering what time of year it is. But again, the inventory quantity is up but not the quality. And three years of drought isn’t helping the market. Many would-be sellers are heading towards “decision time”… reduce the asking price to something attractive, pull the property off the market and wait and or/rent it out for the winter. There’s always next year…
Market Updates and News
The weather has been warm and delightful in Mammoth the past two weeks. We have been spared most of the nasty smoke from the Yosemite fires (nobody remembers so many fires in Yosemite as we have had in the past two summers). There are visitors still poking around and the weekends are relatively busy. It doesn’t seem like anybody is thinking of winter.
Two very interesting news events from outside the area that will have an eventual impact on Mammoth, and probably very positive. First, and apparently under the radar, is Vail Associates outright purchase of Park City Ski Resort. This culminates a pesky legal dispute and may also be indicative of how Vail will play in order to get what they want. There are some interesting deal points but the one that should matter the most to Mammothites is that Vail’s Epic Pass is now good at Park City.
And they plan to merge both Park City and The Canyons into the largest ski area in the United States. The potential (inevitable) acquisition of Mammoth Ski Area by Vail would likely convert Mammoth MVPs to Epic Pass holders (the Epic Pass was priced at $749 this year)… The longer MMSA doesn’t sell to Vail the longer it will have to compete against the Epic Pass. The Denver Post article has some interesting financial data on ski resort sales, and if they are accurate then Starwood Capital etal should be more than glad to sell MMSA at market value. But has the value really gone up since 2005??
The other news is the decision by Tesla Motors to build their new battery factory in Reno. This is purported to bring 6500 new (quality) jobs to that area. It will simply bring increased and much needed economic stability to the region. Mammoth remains a So Cal resort but an increasing amount of business comes from the Reno area.
Mortgage applications are at a national low since Dec. of 2000. I had some interesting conversations this past week with some of the industry. One was with a local appraiser who said the new Dodd-Frank driven requirements on appraisals means that it now takes him an entire day to complete an appraisal. He used to be able to complete 2 or 3 a day. But now he has to answer so many questions on the new appraisal form. And by not doing so he risks “getting a bad grade” and maybe losing his approval status.
And he isn’t allowed to charge more for the new, more time consuming appraisals either. And the new appraisal guidelines are so strict that there is little lee-way to value things like views, special settings like true ski-in and ski-out, etc. This can be rather important in Mammoth… Even past Fed Chairman Alan Greenspan was quoted this last week that Dodd-Frank had gone too far, he called it “regulatory overreach.” Pot, meet kettle…
Meanwhile, the success of the past couple of years getting local condo projects approved for loans is now moving in reverse. Apparently Fannie Mae is back to seriously scrutinizing the rental aspects of the local projects. The onsite “front desk” operations and heavy internet presence and advertising are once again a fatal obstacle to any and all. Many of these are older projects on the low-end of the market.
The HOA boards have already discussed and decided that the rental arrangement is more valuable than losing financing. We’ll have to see if this impacts values. For now it is “case-by-case” on this lending. So as more and more buyers will rely on conventional financing, that financing appears to be more difficult to obtain. S ellers will continue to prefer cash buyers. Low-end condo buyers without cash are increasingly compromised.
At the same time, there is an increasing amount of financing going on in the condo hotel segment of the market. But buyers need at least 30-35% down and stellar credit and cash reserves. The condo hotel segment is back to being considered a worthy “investment.”
The sale of 692 Canyon Place for $230,000. Poor buyer. This vacant residential lot has been traded around for decades. There are serious problems with building a home on this lot. A good agent can point those out and get a buyer to a better lot. And there are much better lots on the market right now. But just for reiteration; retaining walls are very expensive in Mammoth, so much better (less expensive) to build on a flat or slightly downsloping lot than an upsloping one. This is a pie-shaped lot in a cu-de-sac. the building envelope is way back on the rear of the lot, adding even more expense. Ultimately the driveway has to be very narrow and there is very little snow storage. So one very happy seller and one soon-to-be unhappy buyer.
The sale of Mountainback #101 for $305,000. This is a 2 bedrooms + den / 2 baths condo. I listed and sold two similar (same floor plan and orientation) units last fall, one very basic one for $305K and one upgraded one for $325K. So for those saying “prices are going up” here is an instance where they aren’t.
The duplex at 239 Joaquin closed for $457,000. This is an older “hodge-podge” property. But buyers continue to lose their minds for these older little income properties. The sellers of these properties are rejoicing… Clearly, more and more people are venturing into landlording.
The sale of Snowcreek #1004 for $545,000. Here’s a nice 3 bedrooms/ 3 baths townhome in the very last section of Phase 5; well constructed, granite in the kitchen and all the baths. Sold unfurnished but very clean. These have been in demand but this was a good price for the buyers.
The sale of Grand Sierra Lodge #1513 for $990,000. This 3 bedrooms / 3 baths condo hotel unit is probably the nicest unit in the Village. Again, a good price for the buyers.
Upward trending sales at Sierra Park Villas, the “Ghetto,” Lincoln house and Mountain Blvd. Downward trending sales at St. Moritz and Nordica Condos.
Other Real Estate News
Mammoth has two major road projects currently underway and both are going to be beneficial to the surrounding property owners and users. The Canyon Blvd. project has been ongoing for most of the summer and is probably 30 days from completion. The hidden part of the project is new, desperately needed storm drains from just below the Canyon Lodge parking lot to the Village. This should eliminate most of the ice build-up that this heavily traveled street experiences during the winter.
The visual part of the project will be a nice sidewalk on the sunny, north side. And lighting and shuttle stops. The street has been re-graded. All of this will make life for vehicles and pedestrians so much better in the increasingly busy Canyon Lodge/Village corridor. The surrounding property owners will be very pleased with these improvements.
The second project has just started on Meridian Blvd. between Old Mammoth Road and Minaret Road. This too is heavily used by vehicles and pedestrians. And often vehicles are going too fast, especially downhill. So a new, wide sidewalk will be completed on the sunny north side and again improved lighting and shuttle stops. The road will be narrowed with only one lane of traffic each way (currently there are two). But now there will be a separate left-hand turn lane down the middle. All of this will greatly benefit this corridor. But come winter I can anticipate plenty of confusion with the new design. Especially if there is snow on the ground.
And finally, Bishop airport is proceeding with capturing the FAA grants to make airport improvements. The goal is to “increase visitations” to the area and facilitate commercial service. The airport serviced military C-130s in the past. But now it needs some runway improvements, electronics and fencing, etc. These improvements have been resisted for years, but now there is hope on the horizon that Mammoth can have the adequate back-up airport it has long desired. The Bishop airport is historically “flyable” all but a handful of days per year.
Thanks for reading!