Market Summary: September 14 – September 28
The Mammoth MLS is reporting 19 closings in Mammoth Lakes for the two week period ranging from a low of $160,000 to a high of $1,175,000. This is six (6) more closings than the previous two week period. Ten of these sales were condos and all but one were in “turn-key” condition, so these buyers are set for the upcoming holidays (you might think I’m crazy, but this is a BIG deal for many buyers in this market). During the period there was one (1) REO/bank owned property closings and one (1) short sale closings. Of the 19 real estate sales, 17 were financeable properties and eight (8) were purchased with conventional loans.
At the period’s end there are 133 condominiums list ed for sale in Mammoth Lakes, a decrease of three (3) for the period. The real inventory is less than that. A couple of the low-end offerings are deed restricted units–meaning only local, established workers can qualify to purchase them. The bottom of the condo market remains dismal. Many potential buyers are moving into patience mode hoping the market conditions will change. What could create change in this segment of the market?
A big snow storm could. Or another poor snow/rental season could. While many of the low-end condos are owned as “crash-pads” and cash flow is not an issue, many other low-end condos are dependent on some cash flow. And winter is where the real cash flow is. Oddly, in the last few weeks more and more of the prime condo hotel units are being snapped up by “value investors” who are attracted purely to the rental figures and ROI.
Single Family Inventory
The inventory of single-family homes is down six (6) to 60. Some properties are simply coming off the market as winter approaches. The low-end of the single-family home market remains a seller’s dream market. Buyers are increasingly willing to take on greatly compromised and defective (curable or incurable) properties. Some of these new listings are resulting in bidding wars. And these properties are not cash flow dependent. Some buyers are local residents and some are second homeowners… But much of the remaining inventory is overpriced. And who knows if next summer will be better? There ARE some good properties in various parts of the inventory, especially if the current asking price can be negotiated downward.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down two (2) to 64 at period’s end. Of the 64 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 down seven (7) to 82… So closings were up for the period and new sales/escrows were down. That really isn’t what the Mammoth market should be doing in late September…
So here we are. Is it lack of quality inventory?? Did the local real estate industry anticipate (and hype) unsustainable higher prices in 2014?? Are the national media reports of a real estate slowdown affecting the local market?? Or are there too many “ticking time bombs” in the world as Barry Sternlicht was quoted a few days ago on CNBC??… Only time will tell. But the Mammoth real estate market moves in strange ways.
Market Updates and News
The big (?) news of the week was the announcement that the Ski Area’s owners (Sternlicht’s Starwood Capital Group) purchased the Snow Summit and Bear Mountain ski resorts in So Cal for $38M. And that the Mammoth ski pass (MVP) would be good at both resorts. And according to Rusty Gregory, “In the next few months, expect announcements on developments and expansion plans for all four of our resorts.”… This has been expected, so the announcement itself was of no real surprise to Mammoth residents. For most, it is a big “who cares?”
Despite assurances that this is a positive for Mammoth, local residents are trying to figure out how this will benefit Mammoth (i t might be completely different if the MVP was now good at Heavenly, Northstar, etc.). I’m sure the folks over in June Lake would have liked to see some of the $38M spent on June Mtn… So this is a big stay tuned. Or maybe it just comes down to Vail thinking those little So Cal ski areas should be part of the Epic Pass too.
Speaking of June Lake, the community had a true forest fire scare in the past two weeks. The fire was purportedly started by June Mtn. personnel operating heavy equipment. It burned from the east end of the resort towards the June Lake village. A good deal of the forest around June Lake has been impacted by bark beetle infestation so it is especially vulnerable. Luckily, the fire crews contained the fire to about 70 acres but residents and camp grounds had been evacuated. But this was quite unnerving for many June Lake residents. Mammoth Lakes Fire Dept. worked on the fire and last weekend there was an engine and crew from the city of Denver (Colorado) in my parking lot; amazing his these fires generate cooperation… Even more reason to pray for snow.
And yes Mammoth experienced some minor earthquakes in the past few days. And of course the out-of-the-area media pounced on it. At least they didn’t show lava flows from Hawaii!! We’ll see how this continues. Earthquakes and good snow years have gone hand-in-hand in the past.
The Nevada Supreme Court recently upheld the “super lien” status of Homeowners Associations (HOAs). This law gives the HOA the right to foreclose on a lien (their lien) in a superior position to any mortgages. Nevada is one of the approx. 20 states that has this “super lien” law (California doesn’t). Obviously this is a serious issue with lenders; they can be wiped-out of substantial loans. But the upholding of the law is important and is seen as a potential flashpoint for expansion of this law to other states.
This issue has become especially critical for HOAs during the most recent downturn because distressed property owners typically stop making HOA payments while the banks lingered for months and years at foreclosing. Some HOAs have actually foreclosed on underwater properties… Plenty of condo owners in California would favor this law, but for now the bank lobbyists will most likely out-lobby any HOA interests. But in California, you never know.
The REO business has ticked up in Mammoth with several new recent assignments for this office in the past weeks. Some are brand new foreclosures and some are ones that foreclosed months ago and they are just getting around to the paperwork… And from the Who Knew?Department, in the past months we have been assigned a number of “reverse mortgage” foreclosures. These are mainly in the Bishop area. Now reverse mortgages aren’t very common in the Mammoth area so I can’t say I’m that knowledgeable on them.
But once the reverse mortgagee is no longer occupying the home the lender can foreclose. If there is still equity in the property the property can be sold before foreclosure. But sometimes there are no heirs or anybody who cares. And recently there is rarely any equity. But what I’m seeing is that based on market timing and lifespan, some of these reverse mortgagees made good deals for themselves… we should all be able to plan this way!
The sale of 522 Wagon Wheel Road for $622,000. This 3 bedrooms / 2.5 baths home in The Trails had been on-and-off the market for several years. It was rented for awhile. It is a nice home with the living area on the ground floor. But most agents found the major objection of the property was the “slab” siding of the home. This locally milled wood siding was popular for a couple of years in the 1990’s. Before Roberto’s expanded upstairs, it had this siding. Over time, this siding basically hasn’t held-up like most of the other products used. And it doesn’t have a clean, milled look. Regardless, The Trails has been a strong performing segment of the Mammoth real estate market in the past year, and this is a prime example.
The short sale of Snowcreek #982. Here is a 2 bedrooms / 2 baths town home with a nice view. This sold for $420,000. This was a very good buy. No evidence of upward prices here.
The sale of 1849 #401 for $600,000. This 3 bedrooms / 3 baths “flat” condo has a great view of the ski slopes. The major HOA assessments at 1849 are done and paid for. This unit had some remodeling but the location really warrants a major remodel. The seller did well. This is clear evidence prices are skyrocketing.
The sale of Lodges #1145 for $625,000. This is the nice 2 bedrooms / 2 baths “flat” at The Lodges. Comparable sales would show prices for this floor plan are up $100,000 in the past year.
Sales showing no real appreciation at Val D’Isere, Solstice, Snowcreek Phase 3, Lincoln House, Sierra Manors and Snowcreek Crest… Sales showing appreciation at Juniper Crest, white elephant homes in the Mammoth Slopes, and “cabins” in Old Mammoth.
Other Real Estate News
Mono County’s representative in the House wrote a column in The Sheet this past week explaining why the residents of Mammoth should call on the Senate to approve H.R. 1241. This is the bill that would facilitate the land exchange for the Main Lodge and surrounding property at Mammoth Mtn… Apparently the bill is “languishing” with more than 250 other bills. Rep. Paul Cook sponsored the bill and is now telling Mammoth residents that it is a “jobs bill” (the rebuilding of the Mammoth Mtn. Inn) and an environmental bill (Save Mono Lake). So in our little microcosm, here is Wall St. and Washington in bed together.
We’ll see if any local residents take the initiative to tell the Senate to get this bill passed. The publisher of The Sheet was the one who told me several weeks ago that most local residents can’t be bothered with local news because they are too busy worried about putting food on the table. And even though Rep. Cook seems to think his land exchange will improve the local economics, I keep asking local residents what they think they have to gain from it. Nobody knows. They haven’t figured out that it is just another proposed high-end condo hotel project.
And while that could increase the TOT and the property tax revenues for the Town and County, it is also part of a grand plan to keep more of the high-dollar visitor expenditures on the ledger of the Ski Area rather than spread around town. If I owned a restaurant or a major retail/service enterprise in Mammoth, and business is tough enough, I would be careful in supporting the land exchange. Of course, some people will believe anything Rusty and his cohorts say.
What the local residents should be asking the Senators; Has the ~22 acres at the Main Lodge been fairly appraised and valued?? I’ve personally been involved in the Forest Service appraisal process and I have yet to see anything good about it–pure bureaucratic ugliness. Maybe they plan to rely on a Zillow zestimate…
Thanks for reading!