Market Summary: November 9 – November 23
The Mammoth MLS is reporting 17 closings in Mammoth Lakes for the two week period ranging from a low of $155,000 to a high of $785,000. Just one (1) fewer closing than the period before. The same as last period, there was one (1) REO/bank owned property closing and one (1) short sale closing. One thing that stands out; REOs and short sales DO NOT necessarily represent the best values in the market (see below). Of the 17 real estate sales, 14 were financeable properties and seven (7) were purchased with financing. And similar to last period, the preponderance of the closings, 14 out of 17, were condos selling for under $400,000. The classic frenzy to close prior to the holidays is alive and well in 2014.
At the period’s end the condominium inventory rose by 13 units to 133. This is VERY unusual for this time of year. This is almost equal to the peak inventory for the year. As the past two weeks progressed I noticed this rise in condo inventory and started trying to figure the Why? The pricing is all over the board but some of them are certainly competitive.
I see no clear trend. Maybe those shadow owners who really do need nightly rental income in order to pay the bills are panicking based on current snow conditions and the long range forecast. But according to the reservation agents I speak to, the Christmas to New Years week is almost full… The best condo inventory remains in the $300K to $400K price range. There is plenty of variety, quality and value.
Single Family Inventory
The inventory of single-family homes is up one (1) again to 57. Again, strange for an increase to be happening but this is really insignificant. The inventory below $500K is sitting there in rejection, and some snowpack won’t enhance their marketability. The balance of the inventory obviously needs price reductions. This is the type of market where many sellers need to experience the “make’em a stupid offer” behavior from buyers and their competent agents.
One of the “competing” Starwood properties went to escrow and I know the buyer made multiple offers on these Starwood homes. The buyer was looking to make a great deal. The sellers look like will take a nice loss on a purchase they only made a couple of years ago. But they probably overpaid to begin with.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down another 5 to 53 at period’s end. So the properties going to contract is slowing down. Again, this is fairly normal in Mammoth. The “pre-holiday” buyers have made their deals. The rest of the buyers and sellers are waiting to see if it snows (can we channel Buffalo, New York??). Of the 53 properties in “pending,” six (6) are “contingent short sales” (up three) and 26 are in “back-up” status.
The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down 7 to 71. As an aside, Bishop had a nice run of home sales this past summer. The spring seemed slow but the summer was quite active. There are still nice home buys in Bishop in the ~$350K range. And awesome properties above that.
Market Updates and News
The Ski Area is open and right now it is basically Broadway and the “back of 3.” They are prepared to open a little bit more but Thanksgiving will be a bust for skiing. But the weather should be nice for other activities.
There is clear anecdotal evidence that geotourism is in Mammoth right now. This will be my 34th winter in Mammoth and I don’t ever recall so many people just hanging out in town the week before Thanksgiving. Most appear to be baby boomer types and they’re walking around, shopping, eating in restaurants, etc. I’m sure they’ve taken a few ski runs, maybe had their boots fitted, maybe worked on the condo, and maybe even taken advantage of good fishing on the upper Owens River. To the point, they are just relaxing and “slowing down.” Maybe Mammoth’s marketing needs to create a more extensive geotourist menu so they stay longer and spend more money and have an even better experience.
The Mammoth news flow is fairly quiet. The bored seasonal workers-to-be make the Police Beat for being drunk and doing stupid things, Mammoth’s football team loses by 40 or 50 points, the Mono County Grand Jury wants to be taken seriously (again), the LADWP is in the news for being cooperative (and then not being cooperative), there are ongoing impassioned debates about “recreation” and Mammoth has once again found a way to fund and expand the Christmas Tree lighting at the entry to town.
The Mammoth Town Council did overturn a Planning Commission decision for a proposed development in the Village. The Commission denied the application on height limitation concerns. The Council wants it known that the Town will bend over backwards for development, even if it allows a skyscraper to be built. The proposal is for a combination of true hotel rooms and condo hotel units on top of the existing garage structure at 80/50. Since demand for fractional ownership remains pathetic, this proposed development could utilize the nice front desk facility at 80/50. But the issue at hand is that the developer wants to exceed the existing allowable height to basically add more units.
As it is, the developer stated after the Planning Commission decision that the development is at “the low end of viability.” This is so typical of whining developers; “get excessive approvals when the municipality is hungry and then build when the market rebounds.” Meanwhile, throw 25 years of planning out the window because someone is promising nirvana… I remember Rusty Gregory at the North Village hearings in the early 90’s describing/promising the future Village gondola building as the “Eiffel Tower of Mammoth.” Instead we got a minimalist building with a Ski Area retail store on the bottom and an everyday ski lift base on top… Mammoth thinking never changes. Thankfully we have such an awesome natural setting to look at. The man-made stuff, not so much.
With 14 of the 17 closed sales for the period being condos under $400,000, I see no real abnormalities. Buyers are paying more for properties that are newer or in remodeled and “turn-key” condition. The best buys are really in the $300K to $375K price range. Buyers have wised-up and are not paying over $200K for 1970’s built 1-bedroom condos (like during spring). One of the last Creekhouse (Snowcreek Phase 7) units sold. Buyers paid a bit more for condo hotel units with nice locations.
The sale of 28 St. Moritz at $387,000. This REO 3 bedroom / 2 bath home was in sad shape. The buyer paid another $17,000 in fees to the online auction company. I know this home because I sold it to the owner who was foreclosed on in the 1990’s. He became a serial refinancer in the 2000’s. But the buyer now has over $400,000 into a home that is going to need at least $100,000 in remodeling. Maybe $200,000 to make it right. Yeah, the view and sun and neighborhood are nice, but there are still three flights of stairs to get to the main level. This does not make sense. There have been far better properties to own and remodel and put (tons of) money into. REOs are not always a great buy. Good luck.
Other Real Estate News
Speaking of Buffalo, New York (and yes Mammoth is very jealous), the media coverage has shown many of the hazardous conditions that a big snowstorm can create; things like “dangerous roof loads,” and what happens when a rainstorm comes after a big snow storm, and people overexerting (and dying) while removing snow, and the basic gridlock danger caused by too much snow, etc.. Having lived in Mammoth for 30+ winters, I have seen many big dumps; four feet in a day, 10 feet in a week, etc. What is amazing is how Mammoth is geared to handle these types of storm events. Visitors and second homeowners don’t often see the work involved. And then they complain about how “expensive” things are…
The Town owns giant high-speed blowers which replaced many of the old graders and loaders, and the streets get cleaned-up and accessible in short order. The smaller Bobcat style blowers make driveways and walkways far easier to maintain. Property managers know when roofs need shoveling and have competent crews to handle it (I know so many people who have been seriously hurt shoveling roofs). And on and on it goes. And none of it is inexpensive to complete. Just so our visitors and second homeowners can make their way around.
And people wonder why Mammoth has higher condo HOA fees. Many prospective buyers are always looking for a “cheaper” way to own in Mammoth. It doesn’t exist. And trust me, I’ve owned condos and homes. There is no way around the expenses.
Happy Thanksgiving to all!
Thanks for reading!