Market Summary: December 20 – January 3
The Mammoth MLS is reporting eight (8) real estate closings in Mammoth Lakes for the two week period ranging from a low of $175,000 to a high of $1,050,000. That is a relatively low number but it was the holiday period and most Mammoth real estate transactions really try to be closed by Christmas. Last year there were seven closings for the period. Of the eight closings, seven were financeable properties and five were financed. The financing trend continues. Seven of the eight sales were condos selling under $330,000 and one home selling for $1M plus. Sounds familiar. There was one (1) REO/bank owned property closing reported.
Condominium Inventory
At the period’s end the condominium inventory is down two (2) to 130. There will be some expired listings in the coming days due to the end-of-the-year but the condo inventory should remain stable in this range for the winter months. There were 11 new condo listings in the period including two new Westin units. These are all new units to the market. Despite the holiday period there was an unusual amount of interest in condos during the period; both in the form of emails and phone calls. Whether that is a short term “high” or whether that will continue into the normal “post holiday de-compression” remains to be seen. But some condo owners clearly see the increased level of interest in the market and sense it is a good time to get their property on the market.
Single Family Inventory
The inventory of single-family homes is down eight (8) to 46. Finally, there are some much needed price reductions coming through in the lower range. Other properties are simply coming off the market for a rest. There are only 20 homes listed under $1M. But of the 79 Mammoth homes that closed escrow in 2015, 30 sold above $1M! Simply amazing and very telling in the market. There were 17 closings between $600-700K. These two segments of the market represented almost 50% of the sales.
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes is down two (2) to 50 at period’s end. And seven (7) of them are new Gray Bear homes under construction. Of the 50 properties in “pending,” one (1) is a “contingent short sale” and 30 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down another eight (8) for the period to 68.
Market Updates and News
A very busy holiday period concludes but a decent crowd will remain for the coming week. But the hordes are gone. They saw fresh snow, sunny days, cold temperatures and icy roads. The Ski Area was packed most days. The ski conditions are very good but not yet optimal. More storm fronts are predicted for this week and that should add to the base.
Happy New Year! and a Highly Successful Holiday Period For Mammoth!
Looking back at last year’s “year in review” and predictions newsletter, there are no real surprises;
- The four-year drought has been helped with the new snow. But we had a similar amount on the ground in early January 2012 and then it stopped. We’re hoping El Nino produces. Mammoth’s “best summer ever” and solid Fall business and now an excellent holiday will help financially stabilize many Mammoth businesses.
- The $1M+ residential market was as strong as ever in Mammoth. The new Gray Bear additions are appealing to many of this caliber of buyer, especially since they can be legally rented on a nightly basis. According to the local reservation company who is already renting a number of them, they are capable of producing $100,000 to 150,000 in gross rental revenue annually.
- Selling prices in the lower end of the condo market nudged upward based on lack of supply and their desirability as nightly rental properties/crashpads.
- Underwater condo owners from the mid-2000s as well as recent buyers from 2011 and beyond found themselves selling or wanting to sell. There is no real discernible driver, simply the in-and-out of the Mammoth real estate market. But the real distress is almost all gone. There are some lingering REOs and foreclosures coming but they have been in the pipeline for years.
- And four years of drought really killed the real estate hyperbole in 2015. It was back to “blocking and tackling” as one of my old associate brokers was fond of saying….
From a real estate point of view it was a different holiday period. The chatter of inquiries lasted to almost Christmas Eve and then picked right back up again after Christmas. This is not normal. Usually the period is just about tying-up some transactions and relaxing. Not this year. No doubt the snow conditions have people excited. I communicated with plenty of them and there was a consistent theme; their perception is that Mammoth is a “good value” (they should have been here at Labor Day!). We’ll see if more snow and 2016 keeps the interest at this level.
There was a subtle but curious change on the back page of The Sheet during the period. Snowcreek Property Company has owned that spot for years. They have advertised CreekHouse (Phase 7) for several years but they haven’t had any new product to sell in the past couple of years. But the Dec. 26 issue had a new CreekHouse ad; “Coming 2016”. No word yet what that means. But with the success of the Gray Bear homes the market should be telling them that their high-end product is in demand…
Mammoth’s revolving door of restaurants continues to swing; there are three new eateries in Mammoth and one changing it’s face. The most exciting one for me is located in the old Z Ranch location (the old “A” frame at the Y of Alpine Circle and Mountain Blvd. that was originally Gomez’s but before that housed The Cast Off and was purportedly a “titty bar” back in the late 1950’s). It is now Ramenya, a “Japanese Noodle Shop. They’ve been open a week here in Mammoth but since 1990 in Los Angeles. I’ll be trying that soon.
Two other small spots have opened in the Sierra Center mall; Delicious Kitchen and an organic cafe Food Cache. And Grumpys’s may or may not be around in the future. The building sold to the owner of Mammoth Mountaineering and the top floor is apparently becoming the new retail store and the bottom floor a new restaurant. There is re-construction happening while Grumpy’s is still open but the future looks to be very different from the past. Change is good.
I have no idea how much Mammoth property was being rented via Airbnb the past two weeks, but for those who missed it here is my column that appeared is last week’s issue of The Sheet.
Noteworthy Sales
With only eight sales there isn’t much to talk about. The seven condo sales under $330,000 were all right in line with current values. The REO sale was a 1 bedroom / 1 bath unit at White Mountain Lodge in The Village. Sold for $275,000. It had no furniture/appliances and needed paint and carpet and some repairs. And nothing special for view and location. So really no discount for the buyer. Village 1-bedroom values remain strong (er).
The $1M+ home that sold was a large mid-2000’s “modern mountain craftsman” style home that is a very popular style. It sold for $1,050,000 which would look cheap for it’s size and age. But the home had been lived in and was worn compared to most second home-type properties. But even less desirable (I showed it to potential buyers many times) was the lack of a “great room” feel; the kitchen and living room were somewhat disjointed. And that is a big design mistake in this market. Mammoth is about the great room.
Other Real Estate News
In the past few weeks we were marketing an REO that is a special property; excellent location and view and floorplan. (I gave all of you a head start by posting it as as “Coming Soon ” property on the blogsite.) There ended up being eight offers and it went to a “highest and best” scenario and it is now in escrow. Many of the potential buyers made “blind offers” (meaning they haven’t been in the property). Many of them actually wanted to finally see it while on vacation the last two weeks. Many were disappointed they didn’t offer more. They lost the opportunity to purchase a special property because they were too focused on “low balling” to get a steal. This is a huge mistake many buyers make. Instead the real buyer IS going to make an excellent purchase. They will be rewarded with years of quality enjoyment and at resale.
And coincidently, I listed an 1980 “original condition” condo and was going through some papers in a drawer and there was a Mammoth Real Estate Times from the fall of 2006. In it was a Q&A column I wrote on “curable and incurable defects.” The timing of these two events was ironic. Here is some of that post;
“…..this is a critical distinction to make when purchasing a piece of real estate–one that is often ignored in a buyer’s (and their agent’s) analysis. I love the analogy real estate author Dian Hymer, whose books are geared towards buyers, uses when discussing incurable defects during the home purchasing process. She calls it a “prenuptial for homes–focusing on resale potential before you buy a property is a little like considering the terms of the divorce settlement before consummating a marriage.” (I’m sure glad a known female author said it and not this bachelor.)
The simple definition of incurable defect is; a defect in a property that cannot be fixed or is too expensive to repair. That seems simple enough, but there is more than meets the eye. Sometimes people can be staring right at a gross incurable defect and they can’t recognize it, or don’t have the experience to recognize it. And once you own the property, there isn’t anything you can do about it. And once you go to sell the property, the subsequent (potential) buyer will expect a compromise on price (that is unless you are lucky enough to find a buyer who is just as unaware). And while an incurable defect can have great effect on the resale-ability of a property, it can radically affect things like rent-ability, short-term and long-term maintenance costs, and overall enjoyment by the owner/occupant.
Every real estate market has subtleties. And Mammoth is no different. In fact, Mammoth probably has more subtleties than most. In many of the subtleties are the potential for incurable defects. I often tell people that at property can look great on a summer day, but how does it work after 400 inches of snow? Many of our clients are proverbial fish-out-of-water, they are from southern California and have little experience with freezing temperatures, snow (and snow management), thaw, ice, etc.
One of the most common things I see in our local market; buyers (and agents) getting excited about a property that is in decorator finished condition. The property is immaculate and looks like it belongs in a magazine. The problem is they don’t look past the décor and can’t see the defects–especially the ones that can’t be fixed. While I believe in bringing a property to market in its best possible condition (and in this second home market this is very appealing to buyers), sometimes the sellers who have lived with the defects try to distract buyers by making the place really zing.
In California today we transact properties with a large stack of disclosures that prompt both the sellers and buyers through a thought process to think about these existing or potential defects. But there are still limitations to what these documents can reveal. For instance, things like wind and solar exposure, topography, poor design for this particular environment, and a whole host of other things aren’t necessarily “defects” but certainly impact the enjoyment and efficiency of the property. And the micro-trends in the community, planned or not, can greatly impact a property in the near and distant future…..”
Incurable defects have their opposite. Some properties simply have stellar attributes, regardless of the condition. Buyers (and their agents) often miss them. It is a fascinating aspect of the real estate business…….
Happy New Year!
Thanks for reading!