Adult Summer, Bike Races and The Future of Mammoth!
Market Summary: August 28 – September 11
The Mammoth MLS is reporting 12 real estate closings in Mammoth Lakes for the period ranging from a low of $188,000 to a high of $1,166,000. Of the 12 closings, nine (9) were financeable properties and only three (3) were conventionally financed. The five highest priced sales were all cash. The highest priced sale was a REO/bank owned property.
At the period’s end the condominium inventory is down 11 to 149. There were 13 new condos brought to the market during the period and most are really new to the market. The decline in inventory is a combination of sales and expired listings that have not been re-listed.
Single Family Inventory
The inventory of single-family homes is down four (4) to 72. There are now only three (3) homes listed under $500,000 but there are 11 listed between $500,000 and $600,000.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up 11 to 82 at period’s end. Of the 82 properties in “pending,” there is one (1) “contingent short sale” property and 57 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up five (5) for the period at 112.
Market Updates and News
I sure screwed up the last newsletter. And a few readers let me know about it!! The rest are either forgiving or “speed readers.” The link to my column about the Main Lodge Exchange commenting was incorrect. This is the correct column. I still encourage everyone to make comments. It is truly the best leverage the public has to see that much needed and quality improvements are made on the ski area.
The second mistake might not have been mine but my newsletter hosting software. The software has improved over time but has been glitchy on the “save” function. I had written about Aspen’s real estate market and the “first-ever sustained nosedive” in the market there. Somehow it didn’t get fully saved and didn’t appear in the newsletter.
My comments were somewhat tongue-in-cheek because the Denver Post had recently reported that the Aspen real estate market had taken a “precipitous drop.” You see, the sales of homes priced over $10 million had dropped in the first half of 2016 by 42% from 2015. A crisis for sure. And other luxury goods like furs, jewelry and art are also down significantly. One Aspen broker said “The high-end buyer has disappeared.” All of this while Aspen (like Mammoth) has had record summer tourism.
The local market watchers came up with many reasons for the drop; “Uncertainty abound the presidential election. Fear of Trump. Fear of Clinton. Growing trade imbalances with China. Brexit. Roller-coaster oil prices. Zika, etc.”…..I sure hope those poor Aspen brokers can survive.
I apologize for the mistakes.
Meanwhile, the Labor Day weekend crowd froze their butts off. I heard several people say “sure glad I brought my down jacket.” The weather warmed as soon as they left and has been delightful ever since. But from here-on out anything can happen. We’ll be praying for snow soon enough.
This weekend was the Gran Fondo road bike race. Over 1200 cyclists were expected and the big race was over 100 miles. Next weekend is the Kamikaze mountain bike races hubbed at Canyon Lodge. It is a great time to be cycling in the Mammoth region, the air is clear and road traffic diminished.
The Town is reporting record bed tax generation for July, up 21% from 2015. But that didn’t keep another major restaurant from closing; this time McDonalds at the entry to town. No great loss for most except for the kids that were working there. But it is a good life-lesson for them. The building should come for sale. It could have made a good police station.
My Real Estate Q&A that appeared over Labor Day may have proven to be a motivator for some of the local officials. There were lots of verbal comments from around town but last Wednesday the Town Council actually stopped parroting “move forward” and derived the first plan to actually do so. They all agreed that the Ski Area will-do-what-they-will-do at Eagle Base and Sierra Star but that it is incumbent upon them to figure out the Main St. revitalization potential and Village parking solutions.
The new Town-centric concerns are being discussed under the umbrella of “Community Plan.” The Town Council and Planning Commission have agreed to meet regularly with an outside facilitator to expedite these ideas. I hope they encourage some of the local retired bureaucrats who have a wealth of experience at all of this to join in (I’m not one of them). And maybe some leaders will arise from all of the players….I’ll be reporting.
Town Council meetings lasting more than four hours already appear to be a little too long for one of the new TC members. What did she expect? Maybe they’ll need to serve beer and wine.
The Mammoth Lakes Fire Department appears to have come to some decision on the loft situation here in Mammoth. As reported to me, the lofts in town that DO NOT have escape windows but do have legal style staircases and are open at least 50% to the rooms down below are going to be acceptable for nightly rental usage. This would include many of the Snowcreek 1 and 2 units. They are going to recommend “sequenced smoke alarms” in these properties so that occupants will have further advanced notice of any smoke or fire. This new criteria will make all but a small amount of Mammoth lofts “legal” in the eyes of the MLFD.
But the next criteria is in the Town’s hands; head room. Many of the 1970’s built condos can meet the proposed MLFD criteria but not the 7 feet of clear headroom. I’ve had to be especially careful in these lofts over the years. There are probably a few hundred units like this. And they normally have the fire escape windows. We’ll have to wait and see what the Town decides….
Airbnb was back in the news during the period. First, the Los Angels Times was reporting that L.A. landlords have figured out that they can make a year’s worth of rent (traditional rent) in just two months under an Airbnb program. The immediate fear is this will create further housing crisis in L.A. The L.A City Council is now looking at capping the Airbnb rental potential to 90 or 180 days. But enforcement will be a challenge.
And according to an article in the Wall St. Journal, homeowners who rent rooms via Airbnb are now being rejected for re-finances. The banks now see a blurred line between someone’s “home” and an “investment.” We’ve dealt with a version of this in Mammoth for the past six years when Fannie Mae decided condo hotel type properties should not be in their portfolios. The banks have apparently decided to “play it safe” too. I’m sure they are expecting some sort of ruling from Fannie Mae regarding owner-occupied properties that are renting rooms on a nightly basis.
Some of the usual suspects closed during the period; a Studio at The Westin Monache, a 2 bedroom at Juniper Springs Lodge, a 2 bedroom in the Fairway Homes (Snowcreek 5), an Old Mammoth Road 1+ loft unit, and a low-end home. And a couple of “fixer” homes.
The high sale of the period was a Stonegate townhome that was bank owned. This property has a storied past and is just another classic foreclosure story. The property was foreclosed on last December but the bank and servicing company moved slowly. In the interim the previous owner continued on the nightly rental program. They collected the lucrative nightly rental dollars through the holiday period and all through the winter–even though they no longer owned the property. And ultimately, they probably consider themselves to be the victims.
And we’re not about June Lake but that market has seen some solid sales activity this summer……
Other Real Estate News
The California Supreme Court heard arguments this past week on the “Horiike” case. This case has the potential to radically change the real estate business in California (and as goes California….). The case is centered on the ever-controversial topic of dual agency. This is a topic that I have held strong opinions on in the past.
Dual agency arises when the same agent represents both the buyer and seller. But in California it also arises even when the agents both work at the same brokerage. And in theory the brokerage is working for the seller. It is an old legal concept that rarely exists in reality.
When I had a large real estate brokerage I was never really concerned about dual agency when the buyer and seller were being represented by different agents in my company. The in-house agents were very competitive with each other and wanted the best for their clients regardless of the brokerage and legal concepts. Rather than being collusive they were almost abusive (to each other). Their egos made sure of it.
But dual agency when the same agent is representing both the buyer and seller is a totally different story. I don’t think it works. I’ve listened to all of the prima donna agents who think they can do it “honestly and fairly” and just because they think they can makes me suspect. The industry has varying opinions.
The Horiike case resulted as a sale in Los Angeles. This is an even more abnormal case of dual agency. Many of the Coldwell Banker offices in L.A. are truly owned by the same entity under the same designated broker license. Thousands of agents are considered dual agents even though they work out of different offices and most likely have never met one another. The case is founded on a mis-representation of square footage (once again). And Mr. Horrike, the buyer, is a foreigner.
This past week the plaintiff’s attorneys argued for a breach of fiduciary duty. The defendant’s attorney agreed that the listing agent mistakenly misrepresented some attributes of the property but that the buyer didn’t read everything he signed. (The commonly used Statewide Buyer and Seller Advisory places the burden of verifying the square footage on the buyer.)
There is plenty of conjecture about how this case will be decided by the California Supreme Court and the potential ramifications on the industry. It may create radical change or it may change nothing. Stay tuned.
Thanks for reading!