Summer Weather and Tourism Go Hot, And the Real Estate Market Too!

Market Summary: May 28 – June 18

The  Mammoth Lakes MLS is reporting 36 real estate closings in Mammoth for the period ranging from a low of $148,000 to a high of $1,425,000. Of the 36 closings, all but two were financeable properties and 23 were conventionally financed (30-year rates are in the 3.75% range). The mix of sales continues to look very familiar. Fifteen of the 36 sales were condos sold under $300,000. There were six (6) more in the $300,000 range. And two (2) $1M+ homes. 

Condominium Inventory

At the period’s end the condominium inventory remains even at 73. There were 28 new condo listings in the period and 15 are already under contract and in escrow. That is significant selling activity for this time of year. The least expensive condo is listed at $229,000. There are only nine (9) condos listed under $300,000. It appears that the condo inventory will only build modestly through the summer as buyers quickly pick-off the new, attractive listings. There are no glaring concentrations of listings in any one condo project. There are only 11 units listed in the entire Snowcreek projects.

Single Family Inventory

The inventory of single-family homes is down (1) to 36. Very little new inventory but three (3) new listings in the period have already gone to escrow. This is a really tough time to be home shopping in Mammoth.

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is down three (3) to 67 at period’s end.  Of the 67 properties in “pending,” there are 49 in “Active Under Contract” status (formerly “back-up”).  The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down one (1) at 104. The “down” trend needs to be seasonally interpreted. This is typically Mammoth’s slowest real estate selling season. One year ago Mammoth had 49 properties in escrow and 80 in the aggregate MLS.

Market Updates and News

This will be my 36th summer living in Mammoth and I can’t remember the tourism level rising so quickly. The Mammoth Motocross (June 16-25) traditionally signals the launch of summer. This will be the 50th Mammoth Motocross — it is a big event for the motocross industry especially because the local track is so highly revered by the amateur and professional riders alike. It is also a noteworthy part of the Dave McCoy legacy.

The big summer crowds traditionally don’t show until we head towards Fourth of July. But the tourism level has already moved up significantly. It looks like it will be another very busy summer. No wonder the Town’s bed tax revenues have been so healthy the past 18 months. Thankfully it looks like it will be a very green summer. And many are still taking in some skiing.

Mammoth contractors and property managers are busy assessing and repairing the damage wreaked by the January and February onslaught of snow. One contractor stated “things aren’t happening very fast.” Another said “Many of these repairs may not happen before it starts snowing again.” Everybody has their hands full. There has to be plenty of insurance claims. And there is a small condo remodeling boom going on too. Owners who don’t have work already scheduled will have to wait.

Around town there are a half-dozen new homes that have started construction. There is finally a small crew framing at the new Creekhouse (Snowcreek Phase 7) units that are being offered for sale. There is grading and retaining walls being built on the site across from the Canyon Lodge parking lot. That is the next John Hooper development; large townhomes with private garages in the ~$1M price point. We’ll see if he gets units framed before winter. In the Village there is the start of some luxury apartments along Hillside Drive. And the Town is starting the new sidewalk project along Main St. below the Village.

Meanwhile, the rumors are that major work is scheduled to begin in the fall on the Sierra Nevada Resort property on Old Mammoth Road. The specific rumors are that a large portion of the Inn will be closed down and demolished and there will be commencement of the construction of the massive underground garage. This would be a major step in the downtown revitalization. But with Mammoth Lakes Housing chasing empty office and retail space for housing conversions, it is hard to imagine they will build more retail in the new project. ​

Another major change along Old Mammoth Road may be coming; the Planning Commission recently approved plans for a new Grocery Outlet store slated for the old Grumpy’s location behind the Shell station. The ~20,000 square foot building may actually begin construction this summer. Grocery Outlet says that the size of the store and the make-up of the community are in their “sweet spot.” Mammoth Lakes has been begging for another food shopping alternative.

Nobody seems to be talking about it but while I was away on vacation there was a lawsuit filed in Colorado federal court by Intrawest shareholders challenging the sale/merger deal with KSL/Aspen. It is somewhat hard to believe since the agreed upon stock/sale price is almost double the price from 12 months ago. But the price is slightly below what the stock was trading for the week before the announcement. One would think these minority shareholders would be excited about the sale. Apparently they want more. But the majority (68%) shareholder has approved the deal.

So who knows what this will do to the merger and formation of the new company. The recent SEC filing was detailed about how the pricing was derived. The Intrawest sale/merger was the obvious lynch-pin to the Mammoth Resorts deal. Nobody around Mammoth seems concerned, so maybe I shouldn’t be. But lawsuits like this could take years to sort out…

On the local real estate front the heated market has recently caused some appraisal problems. Some appraisers have gone on scheduled vacations (it is normally that time of year) and there is more appraisal work than available appraisers. And one long-time appraiser “isn’t ready” to recognize the increase in values even though the comparable sales to substantiate the new values are there. Oddly, the appraiser is also an active broker and his agents, by virtue of the their new listing prices, are clearly recognizing the upswing in values.

Noteworthy Sales

Speaking of increased values, low-end condo sales in projects like Sierra Manors, Timberline, Mt. Shadows, Viewpoint, San Joaquin Villas and others clearly show a 10-15% increase in values from just six months ago.  

Three commercial spaces in the 501 Old Mammoth Road building closed escrow and the Disabled Sports thrift store will be moving in. This highly successful thrift store will have even greater visibility.  

A low-end home sale closed for $450,000. This just shows how desperate the home buying crowd has become. This small, ramshackle “A” frame home has traded owners a few times in the recent past. Before that it has a long marketing period with no sale. Adding-on to (or even major remodeling) a property like this is a classic “good money after bad” scenario. I hope it works out for these owners. That money could purchase a pretty nice (and larger) condo in Mammoth.

The high sale of the period was a home in the Eagle Base proximity. The long-time owners and residents have had this property on-and-off the market for the past 15 years. It finally sold. It represents another market indicator….. 


New Favorite Listing For The Period!!
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  ​​​​​​​My clients who have purchased in The Woodlands condominium project in the past few years are quite satisfied. It is an attractive and well run project. It is located at the top of Chateau Road on the Red Line shuttle route but also has access to the Green Line route that runs up to Eagle Base. This specific location is close to the 12th hole of the Sierra Star golf course.
  There are some special attributes to this property; it is an end unit and rather than a loft floorplan this unit has three full bedrooms all on the first level. It also has three (2.75) bathrooms. So there is plenty of utility. Upgrades and remodeling to kitchen and baths. It also has distant mountain views and is surrounded by lovely trees. The fireplace is original and will have to be retrofitted, but there are some good options for that. Parking is in front of the unit. This would make an excellent vacation rental property and most of the work is done!  Listed at $449,000
Listing courtesy of Steve Schwind, Shoulda-Bin-A-Cowboy RE 

Other Real Estate News

The DRAFT 2017 Mammoth Lakes Housing Action Plan was released (I’m on the committee) and there is some interesting statistical information in the report.  The last Plan was completed in 2011. That was following another massive winter but the nationally economy was more recessionary. Here is some of the standout information.
 
  • An estimated 200 rental units that were long-term rentals have been lost in the past three years. Sixty (60) have been converted to short-term rentals. Another 130+ have been sold and are now owned by second homeowners, many who rent short-term. (My take is that as values rise this trend will continue.)
 
  • Somewhat unique to Mammoth Lakes; local residents compete with second homeowners through all price points of the real estate market. In most mountain resort communities the second homeowners prefer the higher-priced properties. Here in Mammoth there is a strong appetite by second homeowners for lower-end properties. Years ago I began referring to these condos as “crashpads” and have written about this phenomenon again and again.  And now the Internet driven short-term rental craze has certainly exacerbated the problem. The draft Plan also states that the second homeowners compete for long-term rentals too, approx 10% of local apartments are rented by non-local residents.
 
  • The Mammoth long-term rental market is so tight that it cannot absorb new residents or employees moving to the area. Approx. 42% of the workforce commutes into Mammoth. That is 5% higher than in 2011. The Plan states this is driving the increased real estate values in Crowley Lake and Bishop.
 
  • Rents and home sale prices have increased an average of 22% since 2011 and local workforce income have increased only 12%. While real estate prices have not recovered to pre-recession levels, they are still higher than what most local residents can afford.
 
  • High housing development costs will remain a major obstacle for affordable housing. The high expense of building in a remote, high altitude environment is not likely to change anytime in the future.
 
 
Thanks for reading!

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