Market Summary: July 5 – July 19
The Mammoth MLS is reporting eight (8) real estate closings in Mammoth Lakes for the two week period ranging from a low of $315,000 to a high of $1,546,710. That is even with the previous period. Of the eight closings, all eight were technically financeable properties and three (3) were financed. There were no REO/bank owned property closings and no short sale closings reported.
At the period’s end the condominium inventory is even at 213 There were 12 new condo listings. There was a major surge of new listings prior to the 4th of July holiday. But the low 200 inventory number is likely to remain stable until Labor Day. Buyers currently have the best inventory to select from that they have had in many years. Some segments of the condo market are supporting higher values but there are reasonable-to-good deals in other segments. This time last year there were 134 condos on the market.
Single Family Inventory
The inventory of single-family homes is down one (1) to 72. The decline is a result of properties going to escrow. But looking at the bulk of the inventory in the $450,000 to $1M range and the “days on market” data, most of these homes are overpriced by $50-100,000. Many need significant price reductions. When a property comes to the market that has good qualities and a sound listing price, it sells quickly. The $1-2M price range remains amazingly strong. The volume of these sales, as well as the construction and sales at Gray Bear, is making a significant contribution to the local economy. And it can use it. This time last year there were 74 single-family homes on the market.
Residential Lot Inventory
There are 40 residential lots on the market ranging from $110,000 to $1,995,000. Most of the “good buys” that were around last summer in the ~$200,000 range have been purchased. There are a handful of cheap lots still around that have compromises of some sort but do offer an opportunity to build a new home. But lot values in the summer of 2015 appear to have bounced off the bottom.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up seven (7) to 60 at period’s end. Of the 60 properties in “pending,” four (4) are “contingent short sales” and 38 are in “back-up” status. Five of the pending properties are homes under construction in the new Gray Bear subdivision. There will be a few more shortly. A total of ten homes priced at over $1M are currently pending. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up nine (9) for the period at 90. After an unusually slow spring, the typically slow early summer is heating up with sales. This time last year there were 57 properties in escrow in Mammoth Lakes and 87 in the aggregate Mammoth MLS.
Market Updates and News
The week of weather following the holiday was cold and wet. The rain (and some hail) was more than welcome. The cold caught many, especially the campers and those in the back country, by surprise. But this past week has been downright perfect Mammoth summer weather. And the recent moisture has kept things green and the creeks flowing nicely.
This recent period was void of the Mammoth Lakes Jazz Jubilee for the first time since the late 1980’s. The event is gone and doesn’t appear to be coming back. This was THE event of summer for a couple of decades. But the demographic of fans grew too old to support the event. Many simply couldn’t take the altitude anymore. The event has tapered down over the past few years and the original founders retired. But something will fill the time slot.
This past week and weekend featured the USA Cycling Mountainbike Championship at Canyon Lodge which dovetailed with the Hwy 395 Band and Burger Battle at The Village. The Town has been filled with mountainbike kooks of every sort. But it looks like it has been good for business. They bring almost as much gear as the motocross crowd.
But the BIG event of summer is now Bluesapalooza and it is coming in two weeks. The crowd should be massive. We’ll pray for no forest fire smoke this year. It has compromised the event the last two years. After that the balance of weekends for the rest of summer are scheduled with major events; most combining music and alcohol.
The Town Council has now kicked the Ice Rink can down the road. They have rejected the School District’s recent offer to create an even longer term lease arrangement (with a five-year termination option) for the existing site. The have instructed the Parks & Recreation Commission to go back and implement a full assessment and recommendation for moving the Rink to a Town owned site. They want the recommendation by February 2016. So the Rink will get no roof for the upcoming season and the future location remains uncertain.
What does remain certain is the Council has deferred any decision long enough to know whether Mammoth will have a normal or above-normal winter and the according revenues to do anything Ice Rink related. The harsh reality the Council has come to is they don’t have the money for the roof (which they said they did) nor do they have the even larger amount to move the Rink. They are rapidly heading towards a larger budget decision; Do they even have the financial wherewithal to support the Rink?And what do they intend to compromise if they do?
The upcoming referendum to once-and-for-all decide the long debate over nightly rentals in the single-family neighborhoods is already bringing out the two sides. I hope the town can make it to the voting date (Sept./Oct.) without any real negative incident. People on both sides are that passionate about this topic. It will be interesting to see who takes which sides.
The majority of those with the most to win or lose (the single-family homeowners) aren’t registered voters. The local reservation and property management companies are silently eyeing the opportunity to gain large and popular inventory to rent. Many of the local residents who don’t own in the single-family neighborhoods (and there are plenty) are more interested in added revenue for the Town and local businesses.
Needless to say we’re going to hear all of the arguments from both sides. This is likely to be decided by about 1,000 local voters, if that. So a couple of dozen votes could easily make the difference. It is going to be incumbent upon either side to “get the vote out.”….Some of the early thinking is that the group opposing the change in the ordinance (who pushed the referendum) have miscalculated the “numbers.” Self-interest and apathy will be critical factors…..Some things never change in Mammoth.
Real estate buyers can expect even more transaction delays in the future, especially if financing the purchase. Interest rates are bouncing around with the 10-year Treasury, but new funding paperwork requirements will bog things down. The escrow officers have warned us. And one appraiser this week told me he now has to use nine comparable properties for his appraisals.
With only eight sales during the period there isn’t much to discuss. But again solid activity in the high-end; two homes selling in the $1.5M range.
An original and worn 2 bedrooms + loft / 2 baths unit in Snowcreek Phase Four sold for $355,000. The agents (who both work at Snowcreek Realty) have painted “distressed sale” all over this. Obviously they don’t want this to have a lasting impact on Snowcreek values. But this was a great buy for someone. Some paint, carpet and furniture will make this a fine unit.
In my recent Q&A column on Affordable Housing I mentioned San Joaquin Villas……One of the units there with the large 2-car garage sold for $335,000.
A few other cash sales in the $300K range (and not in “resort” condo projects) made me think of this; A recent article in The Atlantic was titled “Millennials who are financially thriving have one characteristic in common.” The characteristic is wealthy parents. The same type of people who are paying cash for $1M+ second homes are also willing to purchase ~$350,000 livable condos for their Millennial kids so they can get a financial footing in a place like Mammoth. Several of the sales this period smell just like it.
Other Real Estate News
This past week I was working hard to negotiate a “fair” price for one of my buyers. The seller was stuck on their price. The primary reason is a psychological one; they purchased this property back in the peak of the real estate market, the 2004-06 era. They had paid $870,000 for the property in 2004. Now they were looking at selling in the high $600K range. This is an increasingly common theme in Mammoth. Not all of those buyers and owners from that era ended up in foreclosure or short selling. Many have just hung on. And now they are looking to move on.
These are not always easy negotiations. Sometimes it isn’t about the (loss of) money but it is an ego issue. But almost everybody took some sort of beating in the late 2000’s. If you didn’t, you likely weren’t in the game. Many have just taken some loss with some gain and let their accountant sort it out.
But I started looking at other properties that are currently in escrow in Mammoth and looking at what the seller’s purchase price was. I rather quickly found eight properties that fit this criteria; selling now but purchased in the 2004-2006 era. I calculated a percentage of what they were selling for compared to what they purchased for. I was hoping his was going to be a baseline for further negotiations. But the data is interesting.
The worst (lowest) percentage is a 1 bedroom unit at The Westin. Technically the unit closed in 2007 but it was effectively purchased in 2005. It is selling at 56% of the original purchase price (and the Westin values are up). The rest ranged from 57% to 71% of the 2004-2005 purchase price. One home in the Bluffs was at ~70% but at a decrease of over $1M…..
Meanwhile, not so real estate related, but a health and safety matter…..With all the big mountain bike event participants in town and tons of casual riders all around, Mammoth is due for some education and cycling étiquette. It can be entertaining, but I fear somebody is going to get killed.
The Mammoth summer is notorious for people getting on bikes that haven’t ridden a bike in years, maybe decades. The place just calls for you to get on a bike and ride. Everybody is out riding. But they place themselves in danger all the time. I see it every day. Some have never ridden bikes with hand brakes. Some have no idea how to use the gears and create havoc on the road. Others have no idea that you can’t hear hybrid and electric cars.
The worst are the people riding on the sidewalks opposing traffic and not stopping (or looking) as they cross intersections. That is a sure way to get run over by a vehicle making a left-hand turn. But I see newby bike riders doing stupid (and dangerous) things all day long in Mammoth.
And while clumsy cyclists abound, there are just as many out-of-towners in vehicles overladen with toys and other paraphenial who have no idea where they are going and are busy looking at the mountains. They are destined to meet each other. Please be careful.
Or maybe it is simply time for me to go fishing….
Thanks for reading!