The Weather Cools But Real Estate Demand Stays Hot!!

Market Summary: June 18 – July 2

The  Mammoth Lakes MLS is reporting 12 real estate closings in Mammoth for the period ranging from a low of $180,000 to a high of $704,000. Of the 12 closings, eight (8) were financeable properties and six (6) were conventionally financed. There were two (2) bank-owned REO sales in the period. These stats don’t reflect the general activity and demand in the market. There was also a small pre-holiday listing push this last week.

Condominium Inventory

At the period’s end the condominium inventory is up two (2) to 75. There were 25 new condo listings in the period and 10 are already under contract and in escrow. The least expensive condo is still listed at $229,000 but there were a couple of less expensive condos that came to the market, but they have already sold. There are still only nine (9) condos listed under $325,000. Many of the new listings have significantly higher asking prices. But some don’t. Appraisals have become an issue — some new sales are not appraising at their selling prices. For now, buyers who plan to finance may have to put a little more down or change the terms of their financing.

Single Family Inventory

The inventory of single-family homes is up four (4) to 40. There were some new and reasonably priced listings. And some re-hash. We need to see some new <$1M home listings.

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is up three (3) to 70 at period’s end.  Of the 70 properties in “pending,” there are 51 in “Active Under Contract” status (formerly “back-up”).  The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is even at 104.

Market Updates and News

The entire Eastern Sierra is experiencing a crazy amount of runoff. It was certainly expected but to actually see it is somewhat unreal. The warmer weather of two weeks ago really primed the pumps. To the north the Walker River looks like Class 5 whitewater. The Coleville area pastures have mini lakes. Locally, the area where Mammoth Creek flows under Highway 395 looks like a lake. Horseshoe Lake is full to the brim and has found its own, new gushing creek flowing into Twin Lakes. Crowley Lake was dropped quite low but has re-filled rapidly. Many bridges and roads are found to be underwater or flooded. There is still considerable snowpack in the Lakes Basin. 

Mammoth summer is just so much fun. The ebb and flow of summer tourism has begun in Mammoth. The massive Motocross crowd moved out and the 4th of July crowd is moving in. A myriad of special events are stacked up and there is truly something for everybody. Tioga Pass was opened for vehicle traffic on Friday so the international guests will start flowing through. The Pass may be open but access to trails, etc. is very limited. It will be weeks before many of the local higher elevation campgrounds will be open.

Most local business people, and especially contractors, are super busy. If you aren’t already on their schedule you will most likely be out of luck for the balance of 2017. Two contractor quotes from the past weeks are panning out; “Nothing is going to happen fast.” And “There are lots of things that won’t be fixed before it starts snowing again.” 

The big winter caused significant damage. Properties with structural damage are required to be re-engineered and that process is furthering delays. Hundreds of broken windows (and frames) have been ordered but simply haven’t been delivered to town. Some people are getting impatient with the contractors but that won’t prove to be a good strategy.

The real estate market continues to be busy during the period that is historically slower. The short term rental craze continues (see the Airbnb / Airdna discussion below). Local residents looking for a home to purchase have a real sense of urgency. Other are buying anticipating significant announcements and progress emanating from the KSL/Aspen/Intrawest mega-merger. At the same time other owners are seeing this as an opportune time to sell. For more market information check out my Real Estate Q&A that appeared in this weekend’s issue of The Sheet.

A recent Zillow analysis stated that “there are more homes listed for sale at the end of summer than at any other time of year. In most major metros, August had more for-sale listings than any other month.” That is traditionally true here in Mammoth too. It is normally a great time to be shopping. The “anticipation of winter” drives the post Labor Day buying demand. We’ll see if it holds true this year. It doesn’t look like it. The demand has already come forward. 

Speaking of The Sheet, the latest issue is 48 pages. With the demise of the locally produced Real Estate Book, local brokers have turned to The Sheet for their print advertising avenue. While the volume of real estate print advertising has declined steeply in the past few years, there are still those who are compelled to shell out their dollars. It reminded me that it was 30 years ago that the Mammoth Times evolved.

The Mammoth Times was primarily created as a local real estate megaphone. George Fowler of Coldwell Banker quietly drove the whole enterprise. I was there the first weeks, months and years. It was the first time I saw a Macintosh computer and a laser printer perform desk top publishing. I was enthralled. My first real estate related column appeared in 1991. To this day it amazes me that George allowed my columns to run because I was threatening to be a significant competitor. The columns ran until 2006 when I shifted to The Sheet. During the prime real estate years from 1997 to 2006, RE/MAX of Mammoth owned the weekly center spread of the Mammoth Times.  At the time I felt it was the most valuable advertising possible. It would be impossible to justify that budget today. Seeing The Sheet chocked full of real estate ads completes an interesting 30 year circle.  

….One irony that came to mind this past week; Mammoth’s new police station construction is back on track after several delays. But the location now strikes me as rather funny. Between the new police station and the new courthouse (built a few years ago) is the Mammoth Community Church. The Church has been there for decades. But the ultimate placement of the new Town and County facilities is rather ironic. The new police station will give Mammoth its first jail (the only jail in the county is in Bridgeport). So the incarcerated can conveniently stop by the Church on their way to court. Divine intervention?

Noteworthy Sales

Sales were up and down during the period. Closings at Juniper Springs Lodge, The Westin, and White Mountain Lodge show a continuing upward trend in the 2 bedroom condo hotel units.
An older triplex selling at $535,000 reaffirms the upward valuation trend for income properties no matter their age or location.

A sale on Mountain Blvd. $349,000 shows local residents are willing to support increased values in modern, livable units with private garages, no matter the location.
Conversely, sales at The Lodges, Meadowridge and Aspen Creek show no upward movement in values but buyer demand to “get in.” 

New Favorite Listing For The Period!!
  ​​​​​​​There are quite a few new listings that might have made this cameo but they have all gone to escrow already. So here is one suits the crazy era we may be entering. This monstrosity was built at the end of Mammoth’s first real estate boom (1980) by two of my former associates at RE/MAX. It was dubbed The ______ Castle Bluntly, this is an ego palace of a bygone era. The garage was designed to house at least eight cars and a front end loader (for snow removal). It was built on two side-by side lots (which has recently become popular in The Bluffs).    
   The home itself has only 4 bedrooms and 3.5 bathrooms but there are other rooms (office, den, spa room, etc.), an elevator, multiple fireplaces, and lots more. Almost 5,000 square feet of living. It is also adjacent to the ski-back trail between Canyon Lodge and the Village. Based on the size, location and current pricing, this property could warrant a major remodel and become the castle of the modern era. 
Listed at $1,525,000
Listing courtesy of Stephanie Cook, Mammoth Realty Group

Other Real Estate News just released the 2017 Best and Worst Places to Buy Vacation Home Rental Property report. The interactive charts are really quite excellent. This is some of the best data I have seen on the vacation rental market.

The report starts “Even though our data models are showing Airbnb rentals making up to 3X more than traditional long-term rentals, using vacation rentals as an avenue for investment is still not mainstream. But buying vacation rentals is fast becoming a whole new real estate asset class, allowing normal folks to afford and significantly profit for a second home.

But choosing the right place to buy vacation homes is a challenge. House prices, short-term rental restrictions and profit margins vary wildly from city to city and even street to street.”

The report (and graphs) break down owning-to-rent and renting-to-rent. The renting-to-rent scenario is coming under greater scrutiny because the concept is displacing regular housing. This has been a major issue in metropolitan areas like London and New York City. It is now clearly under the eye of the Town of Mammoth Lakes. I expect the Town Council to attack this issue in the next 12 months. Affordable local resident and workforce housing has become a major issue in town. It is compromising many businesses and institutions including the fire department (mostly volunteer), the hospital and schools.

But the buying-to-rent is more than welcome here in Mammoth. Recent statistics show the Town captured over $16 million in bed tax (TOT) in the last fiscal year and condos generated just under 69% of that. The Town loves this volume of tax dollars. 

The Airdna report clearly spells out that “the more expensive the house, the lower the return on investment.” This highlights why the low end of Mammoth’s condo market has received so much demand.  The “sweet spot seems to be the homes in cities with a Zillow mid-tier home value index under $300,000.”

Mammoth Lakes is especially noted in the rent-to-rent category for a very high ROI. But like I said, that has now come under the radar of the Town and they intend to do something about it. Other cities already have. That should ultimately benefit the own-to-rent owners.

There are currently 27 condos listed in Mammoth under $400,000. With this type of ownership “fast becoming a whole new real estate asset class” it is going to be interesting to see where we are a year from now. Especially if the KSL/Aspen/Intrawest merger with Mammoth brings positive change.

Thanks for reading!

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