Market Summary: September 28 – October 26
The Mammoth MLS is reporting 26 closings in Mammoth Lakes for the FOUR week period ranging from a low of $120,000 to a high of $1,195,000. This is seven (7) more closings than the previous TWO week period. There were 32 closings for the same period last year. Fourteen of the 26 sales were condominiums selling for under $400,000. During the period there were NO REO/bank owned property closings and NO short sale closings. Astoundingly, of the 26 real estate sales, 22 were financeable properties and 21 were purchased with financing. (And yes, this is a four week report, but I am now hunkered in for the winter.)
At the period’s end there are 123 condominiums listed for sale in Mammoth Lakes, a decrease of 10 for the period. This newsletter last year had 103 condos in inventory. There are new condo listings for the period but nothing significant to “move the market.” Some listings have expired. And some of the better inventory is now in escrow. There are 48 condos in either pending, back-up or contingent short sale contracts. Of the 48, 38 were listed less than $400,000.
So the low-end condos, the “bread-and-butter” of the market, continues to be the most active. Of the properties “tied-up” there is a broad cross-section of locations and condition. But properties in renovated condition continue to sell quickly and for significantly higher prices. And condo hotel units in the Village and at Eagle are selling.
Single Family Inventory
The inventory of single-family homes is down two (2) to 58. A year ago there were only 43 homes on the market, and 53 two years ago. Most of the inventory is re-hash; either been on the market through the summer or been on the market in the past. Bringing older listings (from years past) back to the market has been relatively successful in 2014. The single-family inventory is stale. A blanket 10% reduction is really warranted. The buyer pool is tired of looking at it on the internet.
There are now seven (7) homes in Starwood listed from $1,599,000 to $1,950,000. One shopping buyer commented to me that “half the subdivision is for sale.” Almost. These are beautiful and expensive homes and some of them back onto the Sierra Star golf course fairways. Typically, these sellers fit into the “don’t have to sell” category but inevitably these listings will compete with each other. And there will be some good buys… Meanwhile, homes under $500K are a hot commodity and buyers are willing to make serious compromises to own one. And they often have to engage in a bidding war to have the opportunity.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up five (5) to 69 at period’s end. Of the 69 properties in “pending,” four (4) are “contingent short sales” and 37 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 10 to 92. For comparison sake, last year there were 49 properties pending in Mammoth and 75 pending in the entire Mammoth MLS. But two years ago it was 92 and 122 respectively. So we’re seeing a solid pre-winter push in the market, not like in the past but significantly more than last year. Or maybe tightening financing (get it while you can) and increased inventory is the effect?
Market Updates and News
While the velocity of real estate sales is on the slower side here in Mammoth, there is a sense that many potential buyers are simply waiting to see if it snows in any meaningful volume in the coming months. Or maybe persistent stories in the national media about a slowing or “flattening” real estate market in California are making buyers hesitant. But I sense it is the snow factor. Interestingly, during the last two drought periods in Mammoth–the late 1970’s and the late 1980s, property values increased.
Ultimately, it was the almost immediately following recessions that damaged local property values. So maybe buyers are sensing a recession? But the snow factor could influence sales in two ways; if it dumps then buyers may rush to buy so they can take advantage of good ski conditions. If it doesn’t snow, many sellers desperate for rental income may need to sell, and inventory could rise sharply… and if it doesn’t snow there will be serious ramifications throughout the State.
In the past month I’ve had numerous inquiries from owners about their recent property tax bills. This last week The Sheet even called seeking some insight. Most of the bills in questions were ones that experienced a rebound in declined values from peak valuations. These reductions know as “Prop. 8 reductions” were common in the past few years for buyers in the mid-2000’s hey-day of values.
But the assessed values can go up quicker than the allowed 2% annually if values truly are on the rebound. But as pointed out in The Sheet by the now-past Assessor Bob Musil, and many times here in this newsletter, the values of the past 24 months are all over the place; some up, some flat, some even down, AND not necessary consistent within each individual segment of the market… When in doubt, an owner should always give the Assessors office a call and ask questions, and take good notes.
Mono County and Mammoth Lakes once again have a wood stove replacement program available for a limited time. If you qualify, this can be a great deal. For legacy property owners with old wood burning appliances this can be opportune. For more recent owners who want to change an existing EPA certified I or II wood burning stove out for a new pellet stove (this is becoming very popular, even in nightly rental properties) this can be a great deal too.
This could make complying with the Town’s new fireplace ordinance a very low cost transition because pellet stoves don’t require the major tear-out of the fireplace like a new wood burning insert. Funding is from the Great Basin Unified Pollution Control District and the LADWP. To see if you can qualify and what you can qualify for please contact one of the local wood stove retailers/installers.
The Mammoth Lakes Jazz Jubilee is either going to be downsized or dead altogether. This has been a giant summer event in the past. The long-time organizers (Ken and Floss) have retired and moved away from Mammoth. The remaining entity is trying to see if they can make it viable. But most importantly the supporting demographic is literally dying out as well as the demand for Dixieland style jazz. Conversely, summer business and events are growing like mad in Mammoth and the Bluesapalooza will consume almost a week of events next summer.
The new sidewalks, lighting and shuttle pull-outs on Canyon Blvd. and Meridian Blvd. will be a pleasant surprise for Mammoth regulars who frequently walk and use those areas. The Canyon improvements certainly enhance The Slopes neighborhoods. Just like the sidewalks on Old Mammoth Road some 10 years ago made Mammoth more pedestrian friendly, this is a great leap forward. All of it should be completed by winter.
My real estate Open House observations from this weekend; there were none. This is quite interesting, the weather was breezy but still nice, there were visitors in town taking in what is left of the beautiful Fall colors, AND it is that time of year–there has to be some potential buyers poking around. But with all of the business (or lack thereof) going on the local agents just don’t appear motivated… Sure glad I’m not responsible for a slew of agents anymore.
With Ebola in the headlines, the Mono County public health officer Dr. Richard Johnson recently stated that the chance of Ebola reaching Mono County are near zero… now there’s another good reason to be here!
As previously stated, the low end of the condominium market remains strong but the buyers now appear conservative. Older 1-bedroom units in Village locations like in Viewpoint and San Sierra are selling (sold) in the $175,000 to $185,000 range. We did see evidence this past summer that buyers may be willing to buy over $200K but they have apparently become more discerning.
There were three sales of Grand Sierra Lodge condo hotel units during the period; two 1-bedroom units in the $240-250K range and a 2/2 for $375,000. These are interesting sales for a few reasons. All three of these units are impacted by ambient and direct noise because of their locations opposite the Lakanuki Bar in the secondary plaza area. This has been a problem and a selling obstacle in the past. But the rental numbers of these units are impressive.
Despite the good income, Mammoth Hospitality is highly recommending the owners of these units install triple-pane windows for sound deadening purposes. These ARE great units for “people-watching” and that is part of the appeal. People certainly don’t go to the Village for peace and quiet (see below). Also interesting is MH reports that the gross rental revenue for the 1-bedroom units is almost identical to that of the 2-bedroom units.
The sale of the vacant lot at 306 Davison for $155,000. This easy-to-build-on lot is in the upper and flatter portion of Davison and is easy walking distance to Canyon Lodge. The immediate vicinity has supported $1-2M home prices in the past few years, but this is all the market would bear for this lot. Apparently a majority of the market doesn’t place a high on this location.
All of the sales (8 total) of the period above $500,000 were single-family homes including two in The Trails. A couple of theses properties had been on the market for hundreds of days. The per-square-foot pricing ranged from $241 for 35-year- old dated luxury home to $419 for brand-new golf course location. The basic homes in the Slopes sold for ~$350 per square foot. The Trails homes sold for $300 and below. No real upward or downward price trend with these sales. But certainly some evidence of the “get in before the holidays” mindset.
Other Real Estate News
One of the most common inquiries this office gets is about the cabins located in the Forest Service leased tracts. They typically have low price points and look “quaint” and “mountainy” in the listing photographs. They are located in places referred to as Glass Creek, Mill City, Pine Glade, etc. Most of the potential buyers are believing they can use these properties for their winter/ski use. Most time they think they have found the “bargain” real estate deal in the Eastern Sierra. And some of these potential buyers are somewhat insulted when they are told that can’t use these properties in the winter. Some are really insulted (What’s the problem?).
These were originally conceived as “summer cabins” by the Forest Service. Most date back to the 1930’s and 40’s. That was a time when real estate development was just starting in Mammoth. These tracts are on Forest Service leases, and the FS has threatened to NOT renew some of these lease in the past, but we haven’t seen that yet.
But what buyers forget is the great effort that is put forward to keep properties useable and accessible here in winter so everybody can come and snow play. They forget the simple physics of what happens to water when the average temperature goes below 32 degrees. Or that is snows on streets and walkways too (even though it magically disappears). Or they forget how unhappy the family gets when they are COLD, even inside their abode… These conversations can be quite entertaining; they like staying at the Westin but think they want a cabin like this…
A recent issue of Fortune magazine had an interesting article titled “Silence Is Golden” and the crux was The Latest Trend In Luxury Resorts? Quiet. Seems that as the world becomes more hectic and noisy the demand for “quiet zones” has increased and is now a highly sought after vacation amenity. Maybe that is why Mammoth has a had a relatively busy Fall, nice and quiet.
Thanks for reading!