Prayers Answered Thanksgiving Weekend With Small Snow Dump!
Market Summary: November 20 – December 4
The Mammoth MLS is reporting 16 real estate closings in Mammoth Lakes for the period ranging from a low of $47,000 to a high of $1,250,000. Of the 16 closings, 13 were financeable properties and five (5) were conventionally financed. The 10-year Treasury rate climbed further during the period and conventional mortgage rates are heading over 4% or higher. Still historically low but the majority of the closings in Mammoth during the period were cash purchases.
The mix of sales was a bit different; two (2) “mobile homes” in the Ski Trails park (both under $60,000) and seven (7) closings over $500,000 including single-family homes and two Snowcreek townhomes.
Condominium Inventory
At the period’s end the condominium inventory is down two (2) to 112. There were eight (8) new condos brought to the market during the period, one is rehash and there are two new Woodwinds (the last Intrawest-built project) townhomes on the market and one new REO. There are still only two (2) condos listed for sale under $200,000. This time last year there were 124 condos on the market.
Single Family Inventory
The inventory of single-family homes is down three (3) to 52. There are only two homes listed under $500,000 but eight listed between $500K and $600K including some pretty decent properties. There were 52 homes on the market one year ago.
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes is down another 13 to 38 at period’s end. Of the 38 properties in “pending,” there are 30 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down 11 for the period at 60. This time last year there were 55 “pendings” in Mammoth and 83 in the aggregate market. The market is clearly flat. But 2016 has been a good year. The better snow conditions should help the market.
Market Updates and News
The Saturday night/Sunday morning snowstorm of Thanksgiving weekend was a welcome surprise. Almost a foot of snow in town and plenty more on the ski runs. Ski conditions have improved dramatically. A smaller storm last Friday morning dumped a few more inches and the temperatures have been cold enough for the snowmaking crews to even make considerable snow during the days. As of this morning the open runs are in good shape but some areas are getting “skied-off.”
The two week forecast has cold temperatures and episodes of snow so it looks like the holiday crowd should have reasonable conditions. Let’s hope. That is good news for the entire community. Even with decent to good snow conditions this is a slower time of year for tourism. Thanksgiving weekend was busy and there was a small crowd this weekend. But it is great time to get in some uncrowded skiing during the week. The crowds will be here soon enough.
I rode the chairlift last week with three Mammoth ski instructors and they were ignoring me but they talked amongst themselves the entire ride about “customer service” and “having the right attitude.” Wow! I was impressed. Maybe Rusty was serious about putting customer service “back into” the corporate strategy. We’ll see.
A long-time Mammoth friend paid me a visit this last week. In my early twenties he was my favorite busboy to work with. I’ve watched him raise a family here in Mammoth and he was fortunate enough to purchase a nice condo along the way. And while his English has improved over the years he often doesn’t understand the quirky things about the good ‘ol USA. And since I helped him with his citizenship in the 1990’s he often comes to me for help to understand some of this.
This time he had two parking tickets that were issued by the Town. Apparently two of his sons who are in college came home for the Thanksgiving weekend. Because there wasn’t much (if any) snow on the ground they parked their vehicles in the street right-of-way like they have done many times before. This is right in front of their condo. They have lived there for 20+ years. And they know darn well that when the snow starts piling up they can’t park there, but there is no harm when there is no snow.
So this is an example of the Town’s new attitude on parking. There has never been street parking available during winter months. But there has always been a reasonable approach. If there is no snow accumulation in the right-of-way or no need for snow removal operations then a certain amount of “illegal” parking has always been tolerated.
But now the Town seems set against even parking on the dirt portion of the right-of-way during the non-winter months. So are owners going to be allowed to pave portions of the right-of-way in front of their properties?? Maybe someone needs to point out that snow storage is best done on pervious surfaces. Of course, some of these people haven’t lived through a real winter (like the police chief). Meanwhile, I sit and watch The Stove use a large dirt parking lot and it creates plenty of dust pollution. The Town once again needs to catch their “arbitrary and capricious” behavior.
The California Supreme Court ruled during the period on the “Horike”/dual agency case. The media has covered it extensively, but to be concise real estate dual agency has not been outlawed BUT the Court ruled that listing agents owe a fiduciary duty to the buyer. This is quite consistent with how the real estate business has morphed in the past 30-40 years.
Way-back-then the relationship was loosely described as “the agents work for the seller.” Then the whole rules of Agency came about in the 1980’s. In a California residential real estate transaction the first document a seller or buyer should see and sign is the Disclosure Regarding Real Estate Agency Relationships (nobody ever reads it).
The delivery and signing of this document is so critically important that in the late 1990’s one of the associate brokers working for me who was also a member of the California Bar Association (licensed attorney) showed me a Bar publication titled “How to Sue a Real Estate Broker.” The first and paramount question is; Did the agent provide the Agency Disclosure document first?? If not, the agent and brokerage have a big problem.
So Agency is a big deal, especially for supervising brokers and owners of real estate firms. Dual agency occurs when associates within the same brokerage represent buyers and sellers in the same transaction. It becomes especially dicey when the same agent represents both parties. My regular readers know I don’t like that arrangement. Regardless of how good the agent, it is difficult to adequately represent both parties. Individual agents from the same brokerage can usually do just fine representing the buyer and seller.
But now the Court has affirmed that the seller’s agent owes fiduciary responsibility to the buyer too. In practice, the seller’s agent needs to do a better job in producing the seller’s disclosure package. Many agents are lazy and simply check a few boxes saying they don’t have anything to disclose. The ruling should ultimately put a greater burden on them to be diligent with the disclosures. We’ll see. I’m sure glad I’m not responsible for a bunch of agents anymore…..
I’m hearing that the Snowcreek II litigation has been resolved. The settlement conferences have been on the local court dockets the past few weeks so it is likely. This will allow these properties to once again qualify for conventional financing. And hopefully the HOA has some settlement money to rectify any lingering problems. The project is actually in good shape. This should help their values.
Local temperatures look to be moderating and that is good news; Mammoth has seen some “pipe freezing” temperatures the last 10 days. When the high for the day is 25 degrees the property managers need to pay attention.
Noteworthy Sales
The Snowcreek Phase 5 townhomes continue to be some of the “best buys” in the marketplace. Comparably priced single family homes aren’t anywhere as nice.
Another older fourplex property closed escrow but the sales price was more in line with reasonable rent multiples. Maybe some sanity will return to this segment of the market.
Another 2 bedroom / 2 bath condo hotel unit in the Village closed for almost $500,000. Developers need to see these values increase before any new development can be considered.
The high sale of the period appears to have been a successful and maybe profitable “flip.” The modern (2006) Presson-built home in the Slopes was purchased a year ago for $1,050,000. It had been a heavily lived-in and somewhat neglected property but that was an attractive price. So paint, carpet and flooring, minor landscape and basic furniture and some TLC brought it back to the market in late spring at $1,299,000. It sat. But a reduction to $1,250,000 finally got the sale at that number with a few thousand in additional repairs. The expenses (including taxes) can add up. I hope the seller is happy with their profit.
Other Real Estate News
Several readers have polled me about our president-elect’s threat to dismantle the Dodd-Frank regulations. Speaking from just a Mammoth real estate perspective, there is some good and bad policy emanating from the legislation. Most of the specific regulations impacting our business went into effect January of 2014. And most of the effects are in the area of lending.
The lending community and loan officers despise most of the new and cumbersome regulations and additional paperwork. I personally don’t see the extra work, but they certainly do. It has caused additional delays in transaction closings. The mortgage industry is definitely in favor of streamlining the Dodd-Frank legislation. Or eliminating the whole thing.
The one excellent change to conventional lending is in the area known as RESPA — the Real Estate Settlement Procedures Act. The Dodd-Frank changes require lenders to give borrowers an exact accounting of the costs related to the loan at the front end of the process. Borrowers also have three days prior to the close of escrow to review the settlement accounting for the transaction (commonly referred to as the “HUD” in real estate lingo).
This process makes the costs related to the loan completely transparent. Quite frankly, in the past this was a sore spot with many borrowers; they believed they were being strong-armed with “junk” fees at the 11th hour, whether they were or not. I hope this part of Dodd-Frank does not get eliminated.
The appraisal changes instigated by Dodd-Frank appear to be a simple money grab with no clear benefit. Lenders are now required to order appraisals through a third party clearinghouse. This has, in many cases, doubled the cost of the appraisal. The reasoning for this is to eliminate any nepotism between the lender and the appraiser. This favoritism is “part of the blame” for the mid-2000s housing problems.
And along those lines the appraisers have a much more detailed (and time consuming) checklist when appraising a property. All of it costs the borrower more for the appraisal. And all in the name of “consumer protection.” ….But the reality? Nothing has changed. The appraisers appraise the property for (or more) the sales price. I can’t remember when “a property didn’t appraise.” So everybody is happy and the deal closes. So that part of Dodd-Frank could easily get tossed out the window.
Thanks for reading!