Market Summary: January 31 – February 14
The Mammoth MLS is reporting 12 real estate closings in Mammoth Lakes for the two week period ranging from a low of $137,500 to a high of $1,460,000. Of the 12 closings, five were financed. A Studio unit at The Westin was financed by a lender. Maybe non-Fannie Mae financing will take hold in this market. Seven (7) of the 12 closings were condos under $240,000 including three condo hotel units. There were no REO/bank owned or short sale property closings reported.
Condominium Inventory
At the period’s end the condominium inventory is up 19 to 163. There were 27 new condo listings for the period and all but a couple are truly new to the market. This unusual rise in condo inventory could be the seller’s expectations for a busy late-winter and spring selling season. It certainly isn’t for the lack of rental income potential this season. The rise in condo inventory at this time of year shall be interesting to look back to. We’ll know more come Labor Day when the condo inventory normally peaks.
Single Family Inventory
The inventory of single-family homes is up four (4) to 57. So a 10% increase in inventory in the last month. There are only nine (9) homes listed under $600,000 and another three between $600K and $700K. Some of the new listings are priced pretty high. They will sit. The new Gray Bear homes remain tough competition, especially if the buyer is willing to wait 8 to 10 months for their new home to be built.
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes is down five (5) to 40 at period’s end. Of the 40 properties in “pending,” two (2) are “contingent short sale” and 20 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down another two (2) for the period to 56.
Market Updates and News
The weather in Mammoth has been absolutely gorgeous but unnerving to many. The euphoria of great snow conditions and mounting snow pack is now gone. The warm sunny weather is looking more drought-like. There is slightly over 20 inches of water sitting on the Sierra range according to the snow surveys. That is a good amount but not enough. El Nino winters are known for having long warm spells and Mammoth is looking to get back into a wet pattern. But so far that isn’t in the long range forecast.
Summer in February and a Packed President’s Weekend in Mammoth!!
The warm weather has brought “hard and fast” conditions to the Ski Area but the skiing remains very good. The President’s Weekend was at about maximum capacity and the upcoming week is booked with families here to take in Ski Week. This has become a very busy 10 day period in Mammoth, almost rivaling the Christmas/New Year’s crowd…..The word is out that Super Bowl weekend is typically a great weekend to ski. But the crowd was substantial this year. On the Friday before I rode the lifts with many people and they were all stoked to be skiing at Mammoth on an “uncrowded weekend.” I’m sure the conditions had something to do with it.
Many people remain puzzled (and questioning) about the recent Rusty Gregory comments pertaining to his desire to close the Sierra Star golf course. But he did say that he’d like to hear some public comment. But nothing else has been said. I was thinking that the town could come up with a Letterman-style “the 10 best things to do with the Sierra Star land.” I’m sure the public would come up with some great ideas.
Some quick math shows that 90 days of 100 additional players paying $45 each would cover the shortfall, maybe make it positive. I’m thinking back to the old business class concept of “pricing function.” It would assess that since hardly anybody plays at Sierra Star (in part because of the cost) and the Mountain has at least 100 guests staying in their beds on an the average summer night, that they could offer that discounted price to their Hospitality guests. It might even raise the occupancy rate (what a concept). With another 100 players per day playing at a discounted rate the players would likely spend more money at the clubhouse (isn’t that the concept of cheap season passes?) Now the course could be profitable.
But there is something else. Rusty wants something. We just don’t know what it is yet. Either that or he just feels the need to be back on the radar. It is easy to become irrelevant these days. But Rusty spearheaded the Master Plan including the golf course construction. They cut down 6,000 trees. It is his doing. He ultimately needs to take responsibility. But so many big shots seem to think responsibility is a bygone concept.
Speaking of the Super Bowl, the Airbnb Effect hit the San Francisco area last weekend. Thousands of accommodations were listed on Airbnb by property owners trying to capitalize on the big event. This ended up with a “glut of supply in the market with thousands of extra listings at ridiculous prices.” But according to Airbnb more than 15,000 Super Bowl fans stayed with their hosts in the Bay Area over the period. According to Airbnb’s data service Beyond Pricing, at the peak there were 9,000 short term rentals listed for the period in the area but with only a 52% occupancy rate.
The yields on 10-year Treasury bonds got crushed during the period and settled out around 1.75%. That should mean interest rates on 30 year mortgages will drop into near all-time lows once again. With more and more purchasers utilizing financing (as opposed to paying cash) this could spark some buying. Also, anyone who paid cash with borrowed money against an equities account should be looking at refinancing soon.
As you can tell by my last newsletter, listing real estate has been on my mind lately. I was inputting a new listing into the MLS the other day and I realized I had good photos of the property both winter and summer. The results of having both are quite favorable; the outside looks different, the light is different, etc. It is beneficial for prospective buyers to see what the outside looks like in different seasons. Prospective sellers should keep that in mind. I’m always available to come shoot photos. Meanwhile, my latest Q&A is about the current state of listing real estate in 2016.
Noteworthy Sales
With seven of the 12 sales during the period being condos selling under $240,000, the “crashpad” effect is alive and well in Mammoth. Good snow conditions should do that. But three were condo hotel units. Those units might be more income oriented but they do make comfortable crashpads. The older and smaller 1970’s condos are the true crashpads, and they have been selling too. And even though that inventory is pretty limited, there has been no significant upward trend in values.
The sale of Gray Bear #7 at $1,460,000 is another closed home in this new subdivision. This brand new home is 5 bedrooms / 4.5 baths and has one of the nicest lots in the subdivision overlooking Bear Lake in Sierra Star.
Another upper-end home sold at $1,300,000. I showed this nice home to several clients through the past months. The all said that they didn’t want to stand in their living room and “look at the back of other homes.” In this price range buyers should have the luxury of a nice view and setting. Maybe this buyer didn’t realize it because of all the snowpack. I don’t think this buyer was sufficiently educated on the market.
Other Real Estate News
And of course I’m watching the tug-of-war over the placement of the ice rink and MUF at Mammoth Creek Park West. I’ve been to a couple of workshops. The owner of the bowling alley thinks the concept is the greatest thing since sliced bread (can’t imagine why?). And I’m receiving regular emails from adjacent property owners who adamantly oppose the project. I haven’t made any comments on the plan, yet. The environmental process is lengthy and just starting.
But here are a couple of things that nobody has considered yet;
- One component of the environmental review is noise. In this case it is a BIG issue because the surrounding properties are residential. But so far all of the noise consideration and potential mitigation measures have been focused on the structure and the ice rink mechanisms. But the site planners have placed ~125 parking spaces right on the residential property lines. And parking lots themselves create all sorts of noise. An un-policed parking lot (and it will be un-policed) is a prime spot for all sorts of late night partiers, motorhome squatters, and other mayhem. It is potentially far worse than the ice rink noise. But so far the only question has been why the parking lot isn’t closer to the road? The Town’s answer is they can’t afford to move the playground equipment and grassy play areas. (So far it would appear they are trying to do this whole development as cheaply as possible, not as best as possible. That always works out well).
- Another element of the environmental review is traffic. Nobody has even gone there yet. A serious traffic study hasn’t even been mentioned. The new ~125 parking spaces are serviced by one driveway. But that driveway is located at the end of a blind curve in Old Mammoth Road that was partially straightened years ago but still has serious sight-line issues. I know it well, it was my regular commute for many years. Even worse is that the blind curve is at the end of a 40 mile-per-hour zone where many north bound drivers are exceeding that. And the visibility in the curve decreases in the winter with snowpack and decreases in the summer when the aspens and willows in the creek area are fully leafed.
There are other distractions in this immediate zone including fisherman in the creek, all sorts of bike path users, etc. And I’m sure a traffic study (we need winter study AND a summer study) will show that a preponderance of the traffic exiting the proposed MUF driveway will be turning left onto Old Mammoth Road. All of this makes the blind curve scenario even worse. It will require serious mitigation.
The process has just begun, I’m sure we’ll discover some other serious issues. Ironically, if this was a private development, the Town staff would already have these issues on the list. But this is their project. They seem hell-bent that this project can be done and done well within the budget. We’ll see. Maybe these Town newbies need to be reminded about our recent bankruptcy fiasco.
Thanks for reading!