Mammoth Mountain Will Be In Full Operation For The Holidays!!
Market Summary: December 4 – December 18
The Mammoth MLS is reporting 11 real estate closings in Mammoth Lakes for the period ranging from a low of $119,500 to a high of $910,000. Of the 11 closings, nine (9) were financeable properties and six (6) were conventionally financed. One un-finaceable property was owner financed. Seven (7) of the 11 sales were between $350,000 and $700,000.
At the period’s end the condominium inventory is up one (1) to 113. There were 14 new condos brought to the market during the period and only two haven’t been on the market in the recent months. There is only one (1) condo listed for sale under $200,000 and only nine (9) listed under $250,000. Clearly, the bottom of the condo market is different from the past few years.
Single Family Inventory
The inventory of single-family homes is down one (1) to 51. There is only one home listed under $500,000. So the bottom end of the single-family market resembles the condo market.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up seven (7) to 45 at period’s end. Of the 45 properties in “pending,” there are 32 are in “back-up” status. No short sales. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 11 for the period at 71. So maybe the snow and getting past the election has sparked the market. I would bet on the snow. And after this weekend we’ll see if the better snow and increased enthusiasm helps. But at some point people move into ski and party/relaxation mode, including the Mammoth real estate brokers.
Market Updates and News
The big news in Mammoth is that two good snowstorms blew through during the period leaving the Ski Area in wonderful shape for the upcoming holiday period. The town is white and temperatures are cold. The table is set for visitors to come and have a great time and for local businesses to prosper. The two storms were both warm storms creating more rain than snow at the town level but depositing heavy snow on the ski runs. I tell people that this has become an almost ideal scenario because the Mountain gets the coverage but the town gets to save on costly snow removal.
Even more impressive to me is that we have experienced multiple “atmospheric river” events this fall. In the past we called them “pineapples” or pineapple connections because of the stream of tropical moisture coming from the direction of Hawaii. These very wet storms have been the hallmark of the past big winters. Let’s hope the pattern continues. This drought needs to be busted, the cycle needs to change again.
I’ve been spending some time at the Westin Monache. I was showing units there on a quiet weekday and the facility looks well-kept. There is plenty to like, but especially when you think about swimming in the beautiful, warm pool during a snowstorm. And there are lots of little touches that make the place special. But then we were assigned a new bank-owned 2-bedroom in the project. I really like the 2-bedroom units at the Westin. They have full kitchens and comfortable layouts. Some of the floorplans and exposures are better than others but they are some of my favorite units in town.
I was speaking with Cammon Stover this past week. She is the Homeowners Relations Manager at the Westin Monache. I always try to pick her brain. She said that the Studio units continue to be the best renting (revenue) units in the property relative to their selling prices. She said the 1-bedroom units are on par with the Studios. (For me, the biggest difference between the Studio units and the 1-bedroom units is that the latter have outside decks.)
But what Cammon said that is interesting is that she is now clearly seeing the ability to move room rates upward. She says she meets once-a-week with her staff to discuss the ability to charge more for the rooms at different periods. It looks like the whole concept of “dynamic pricing” (think MMSA lift tickets) is catching on in the resort industry. This should be good news for Westin owners. And we”ll see if it impacts values over the coming years. Getting these values up is critical for future hotel condo/hotel development.
The Town planning activity takes a respite for the holidays but expect the ice rink/MUF draft EIR sometime in January and more discussions about moving that proposed facility to the center of town at the Shady Rest parcel. There are critical decisions coming for the Mammoth Town Council.
The annual Night of Lights (last night) that occurs the Saturday night before Christmas has become one of Mammoth’s “don’t miss” events. All of the new snow brought a solid crowd into town and this year’s event was icing on the cake to a great ski weekend. Plenty of sore legs and smiling faces.
Some of the condos sales during the period have interesting sales history that is telling about the market the last 15 years.
A Timbers townhome unit sold for $910,000. That is 120% of what it sold for new in 2000. But it is only 63% of what it sold for in January of 2008.
Conversely, a neighboring Cabins unit sold for 60% of what it sold for new in 2005. But it sold for an almost identical price in 2008 as an REO. That was one of the first REOs in the cycle.
A nice unit in the Lodges just closed for $695,000. It sold new in 2009 for 114% of that. And that was a developer close-out at that point.
A 2-bedroom at Grand Sierra Lodge closed for $470,000. That is 68% of the what the units sold for in 2005 but only 53% of what the units were selling for just 12 months later in 2006.
A 2-bedroom at Juniper Springs Lodge closed for $357,500. That is a 116% of what the unit sold for (new) in 1999. But that is only 74% of what it sold for the last time in 2003.
Other Real Estate News
The significant rise in the 10-year T-bill rate is obviously something the real estate industry is watching. It will certainly stall the low-end and first-time homebuyer markets. Borrowers simply won’t qualify unless the government relaxes the borrowing standards once again. Re-financing should come to a stand still. I haven’t seen any direct impact to the Mammoth market but it is early. The rates are still low by historical standards. Buyers could be more reluctant to pay cash if their money is making some interest in conservative places.
Maybe more impactful to the Mammoth market could be changes in the capital gains rate or the reduction of the mortgage interest deduction. Both are being talked about by the new administration. There is a good number of Mammoth second homeowners who utilize the interest deduction. But the National Association of Realtors is a VERY powerful lobby group in Washington DC and they will fight any changes to the mortgage interest deduction.
Capital gains reduction is another story. NAR would likely be highly supportive. Historically, a capital gains tax reduction spurns real estate activity. Especially in second homes that have appreciated but there has been no depreciation write-off (and subsequent recapture expense). There are probably dozens of properties in Mammoth that fall into this category that have interested sellers if they can reduce their tax liability. We’ll see. The local market could use some of that inventory.
Merry Christmas to all!!
Thanks for reading!