Market Summary: January 3 – January 17
The Mammoth MLS is reporting 17 real estate closings in Mammoth Lakes for the two week period ranging from a low of $165,000 to a high of $1,100,000. Of the 17 closings, all were financeable properties and 11 were financed. The three highest priced sales were cash purchases. Ten of the 17 sales were condos selling under $408,000 and one home selling for $1M plus. This is very consistent trend. There was one (1) REO/bank owned property closing reported.
At the period’s end the condominium inventory is up seven (7) to 137. Even with several listings expiring (year end) the condo inventory rises. Very unusual for this time of year. Sellers clearly sense the enthusiasm of condo buyers. There were 18 new condo listings in the period including three more new Westin units. And again, these are all new units to the market.
Single Family Inventory
The inventory of single-family homes is up five (5) to 51. Some new listings, some price reductions and plenty of the same old stuff. During the period only two (2) of the 17 closings were single-family homes.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down six (6) to 44 at period’s end. Of the 44 properties in “pending,” one (1) is a “contingent short sale” and 24 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down another seven (7) for the period to 61. These numbers may look slightly downward, but there are plenty of offers being written.
Market Updates and News
Mammoth is experiencing more snowstorms and that is the best news. There haven’t been huge “dumps” where the town gets 2-3 feet overnight, yet. More storms are coming and the weather folks see a wet pattern continuing for the long term. There are piles of snow in town. This isn’t a drought buster yet but conditions have certainly improved.
Skiing and Enthusiasm at Multi-Year High in Mammoth!!
The skiing is very good but I’ve heard some complaints. The conditions aren’t “epic” yet. The early storms were very windy and many of the Ski Area’s ridge lines are still rocky. The bowls are filling in nicely. There was great skiing to be had this past week. And the crowds have finally backed away mid-week. Martin Luther King weekend has been very busy.
The Town Council had to allocate another $50,000 just for the conceptual drawings/site plans of the ice rink facility at Mammoth Creek Park West. These conceptual plans will be the basis for the public comment phase to essentially “scope” the environmental review process (CEQA). So the Town staff has already underestimated costs by 25+% and we’ve just started. The staff responded “we tried to make our best guess.”
The first meeting where the public will get to see the conceptual plans is scheduled for January 29. The public and surrounding property owners have been invited. There will apparently be three different renderings produced by HMC Architects. But in a meeting this past week the owner of HMC warned that “the Town may not have sufficient funding in place and may be looking at an overly aggressive timetable for completing the project.”
At the same meeting the Town brought in a planning consultant to make a presentation on “building trust.” That trust is built by “under promising and over delivering.” So far the Town has over promised and under delivered. I can’t wait for January 29.
….The hot rumor of the week was verified by The Sheet this past weekend that MMSA CEO Rusty Gregory is contemplating closing the Sierra Star golf course. Apparently he is “tired of losing $300K to $500K a year on a seasonal golf course.” The “community needs to re-think how to best use the 130 acres in the middle of town…”……Where this is going is anybody’s guess. Mr. Gregory was the one who promoted the Lodestar Specific Plan 25 years ago that included the Sierra Star golf course. It was recognized then that the golf course would be a “loss leader” but the gain would accrue to the increased property values within the project.
But now that MMSA and Intrawest and the Starwood Capital etal. entities don’t own any of the land within the Lodestar master plan the golf course no longer makes sense. It is surprising they didn’t think about that before selling the properties. But what Mr. Gregory’s real goal here will be sorted out in the month’s to come. Maybe he thinks that because the Town’s Parks and Recreation Department has so much money (for ice rinks, etc.) that the Town should own the golf course. Or based on his recent push for the TBID that the golf course should be paid for by a new tax or at least receive substantial Measure R funds. Or who knows. There is something at play here. And like any good private equity fund operator, the “privatize gains, socialize the losses” strategy will be the goal. I’m sure we’ll find out soon enough. 2016 is going to be an interesting year. Thankfully we have snow as “the great equalizer.”
The Internet service during the latest holiday period was clearly the best ever. Almost as good as it could be. Suddenlink purportedly made several million dollars in upgrades this past summer to handle the volume of traffic that it experienced last year at the same period. And it performed. There was minor cell phone drop-out during the period. Mammoth now has Internet speeds rivaling or better than most southern California metropolitan areas. I just upgraded to 200/20 megabit service at a reasonable price. Now I won’t have to plan my day around a video upload to YouTube.
I wrote a Real Estate Q & A column for The Sheet this weekend and Ted let me know that there wasn’t enough room in this edition. He said he is experiencing an “interesting juxtaposition”; this is a holiday weekend and there will be a big crowd in town, and the demand for his papers is the highest it has ever been (even allowing for what goes towards “firestarter”) and yet the local businesses seem reluctant to advertise….Maybe most businesses (like me) are too busy figuring out all of their year-end financial and fees/licenses/taxes stuff.
These aren’t sales yet but I was playing in the Westin Monache Studio market this past week and it is an interesting micro-segment of the Mammoth real estate market. These units are priced in the $210,000 to $230,000 range. In the past few years they have a history of producing right around $40,000 in gross rental income. That’s pretty impressive for a small hotel room with a small kitchenette. The owner’s net income runs about 45% of that and they have to cover a small electric bill and the HOA fee (almost $800 per month) and the property taxes. Do the math and there is a decent capitalization rate relative to the rest of the world. So people have purchased these for pure investment. And they also have the opportunity to actually stay in the unit or let friends use them.
So some interesting factoids brought to light this week; Some of the current sellers actually own more than two units at the Westin. And they are trying to sell units that they have gains and losses on. Both buyers and sellers are doing tax deferred exchanges (1031s). And curiously they are bringing their units to the market at the peak rental period.
The sale of 250 Manzanita for $323,000 is really a classic. This is a small 2 bedroom / 1 bath 1950’s cabin on an 11,000 square foot lot. In the “heart of The Ghetto” this is a romantic little cabin that did meet the finding requirements. It shows that some buyers will make serious sacrifices to own a home rather than a condo.
Five of the condo sales during the period were Snowcreek units. All good values in the market, but some prices up and some prices soft. View and setting are still valuable assets.
The only REO closing was at Juniper Crest #12 for $780,000. This 3 bedrooms + den / 2.5 baths townhouse sold new in 2005 for $1,300,000. So exactly 60% of what it sold for at the peak of the market. There were a total of eight offers on the property with some $100,000 apart.
Other Real Estate News
Long time Town Councilman Kirk Stapp wrote a recent column on the state of affordable housing in Mammoth. Stapp is on the Mammoth Lakes Housing Board and has been fanatical advocate for decades. We haven’t always seen things the same way. I was on the Planning Commission when the original housing element to our General Plan was developed and of course I’ve been in real estate for 30 years. So I have a little background too.
Stapp says we are currently “170 units deficient of meeting our affordable housing needs.” And we need to do something about it. Those are the present calculations, but in the open market the standard rent for basic apartments have not gone up in many years. Yes, the availability is tight but the lack of supply hasn’t driven the rents up here in Mammoth. Local residents can only pay so much. And local landlords will tell you that the demand by quality tenants remains low. And tenancy is very transient. Ultimately if there were another 170 deed restricted housing units in Mammoth the open market rents would drop 10-20%, maybe more. Mammoth is still a small community and 170 units is a large amount. Maybe Stapp and his cohorts think the 170 units will make this utopia. But not for everyone.
Stapp also says that Mammoth is 1,250 affordable housing units deficient at the town’s “build out.” I hate to tell him that Mammoth will NEVER see this “build out.” The developers and large land owners can dream about it but the community simply doesn’t have the capacity for much more development. We’ve learned that water is a big problem. The roads can’t be expanded any more. There simply isn’t the infrastructure. There are limiting factors. And the demand isn’t there either. The lack of new construction is clear evidence.
Even worse is the cost of construction. This is not going to change. Mammoth is a very expensive place to build. So the Housing folks want to tax the developers so they can build more deed restricted housing but the tax itself makes the proposed projects increasingly uneconomic.
Further there is a growing resentment in the community for many of the occupants in the deed restricted housing. Some call it “The Escalade Effect.” Many are driving late model vehicles and are regular visitors to the food bank (the local Realtors have become substantial donors to the food bank). Again, Mammoth is a small community and we see everything.
Funny how bureaucrats and businessmen can see things differently……….
Thanks for reading!