Market Summary: September 27 – October 11
The Mammoth voters have spoken. Measure Z passed with nearly 70% (858 to 370) in favor as of the morning-after “semi unofficial” results. A total of 1,229 votes were cast, a 42% turnout. All of the precincts voted fairly close.
Measure Z….”Yes” by 70%
My initial discussions with various Mammoth “thinkers” brought mixed reactions. Most thought it was a big thumbs down for the Town Council. Some pointed to the various special interests in town that would have influenced the individual’s vote. One felt that the “property owning gentry” have little respect for the local business community. Some believe this issue can never come back to the table due to this resounding vote.
Regardless, the Town Council now has to get to work on implementing the Quality of Life Ordinance (QLO). The Town staff will have to perform. But nightly rentals in the residential neighborhoods will certainly continue. The regulations brought on by QLO and these rentals will make strange bedfellows. Why?
Airbnb has become a monster. An article last week by Reuters spelled it out. Airbnb’s expects bookings in 2015 to double the 2014 number. They expect a total of 80 million bookings this year. It is “blowing away” the stock analyst’s estimates. They have 1.5 million properties listed for rent in more than 34,000 cities in 190 countries. One quote in the article calls it “a global phenomenon.”
But the article clearly acknowledges “the growth has come despite Airbnb’s ongoing battle with regulators and lawmakers over who can list properties and how they should be zoned and taxed.” Another quote; “Airbnb is certainly being very, very aggressive.” And yes they are.
Mammoth property owners were recently mailed postcards from Airbnb with the banner “Earn money renting your vacation home!” The postcard offers a free listing on Airbnb, access to the 25 million guests that have stayed with them in the past year, free professional photography, $1M coverage from their “host guarantee,” and 24/7 customer support. Aggressive indeed.
But now that Measure Z has passed with flying colors, don’t expect the residential nightly rentals to go away. I have a feeling they will increase due to the likes of Airbnb and Vacasa. The wheels are in motion. We will be visiting this issue again. Give it a couple of years.
Market Updates and News
The last two weeks have been cooler with some wonderful rain. The rain has eliminated the smoke, knocked down all of the allergens and dust and put a bit of white on the local mountains. The flaming Fall colors are starting to become impressive and nice weather should bring some visitors into town.
By the time you read this newsletter I should be on the warm Pacific off of southern Baja chasing fish and trying to stock the freezer for winter. It was exactly 10 years ago that I was stepping onto this very same trip that the announcement came (front page LA Times) that Starwood Capital was purchasing Mammoth Mountain. The local real estate market went haywire while I was out on the ocean. In the summer of 2005 the market had clearly plateaued and slowed but this announcement pushed a large volume of sales and values launched another 10-20% into 2006.
Of course it has proven to be that Stawood acquired the Ski Area at the top of the market. Years later I would sit through hearings and meetings about their tax appeals; from the original acquisition valuation to all the various ~70 real properties that were included in the transaction. It was always interesting to listen to them argue about the values; they were vehement that the values were far less than what they paid.
So what has Starwood done? Not much. CEO Rusty Gregory spends most of his time (“progress” as he calls it) restructuring debt. After 10 years and four drought winters they are likely still underwater. Originally, Gregory said Starwood had a “5 to 7 year window” for Mammoth. But they were hoping to build more condo hotel properties in the late 2000’s and make a killing. Obviously that never happened. What their future will be shall be interesting. Most in the community are still hoping they can sell to publicly held company that will inject capital into the enterprise rather than strip it out.
I’ve pushed the sales report for the period down to the bottom. But you’ll see the inventory numbers are down. Not so much because of actual sales. There were numerous outright (and unexplainable) cancellations of listings. And expired listings too. We’ll see if they come back to the market anytime soon. The Mammoth market is normally busier this time of year due to the “anticipation of winter” as I like to call it. But it appears that many buyers are simply waiting to see if it snows.
Hopefully, this is a good time to go fishing. I don’t think there are any big announcements coming. But another drought winter could get Starwood to cut their losses…..a silver lining perhaps.
Noteworthy Sales
The bulk of the sales were condos under $400K. That is pretty normal for Fall. At least some buyers are hopeful for a winter. The only real standout is a top floor 1 bedroom / 1 bath unit at White Mountain Lodge closing for $305,000. Village values remain in an upward trend.
Another one of the Snowcreek Phase 4 “500” series townhomes closed at $850,000. This is a nicely remodeled and updated unit and the price reflected it. Despite being 30 years old, these properties are still great.
Other Real Estate News
As of last Thursday, the Mammoth MLS was reporting 10 real estate closings in Mammoth Lakes for the two week period ranging from a low of $44,000 to a high of $850,000. The low was a “fee simple” storage unit. There was also a Forest Service cabin sold in the Lakes Basin. Of the 10 closings, seven (7) were financeable properties and five (5) 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 down another 21 to 151. And there were eight (8) new condo listings in the period. The Mammoth condo inventory is down 25% in the last 45 days.
The inventory of single-family homes is down 10 to 60. The marginal homes in the ~$600,000 price range are even selling. Grey Bear II is coming online with 25 new lots with new homes priced from $850,000 to $1,500,000. These new offerings are now starting to impact the resales in that price range, and for good reason.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up eight (8) to 62 at period’s end. Of the 62 properties in “pending,” three (3) are “contingent short sales” and 39 are in “back-up” status. The total number of pending in the aggregate Mammoth MLS (which includes outlying areas) is up nine (9) for the period to 80.
Pray for snow!
Thanks for reading!