March Does Not Disappoint!! Spring Breakers Get Great Conditions.
Market Summary: March 18 – April 1
The Mammoth Lakes MLS is reporting 18 real estate closings in Mammoth for the period ranging from a low of $187,000 to a high of $1,100,000. Of the 18 closings, 15 were financeable properties and 14 were conventionally financed. The mix of closed sales is back to a familiar theme; nine (9) of the 18 closings were condos under $400,000 (which is the new “low” threshold) and one (1) residential closing over $1M. There were two other residential closings. The 10-Year Treasury rate reversed in to the 2.75% range in the past few week. That helps.
At the period’s end the condominium inventory is down seven (7) to 51 but three of those are Creekhouse units that are under construction and far from completion. So there are essentially 48 resale condos currently on the market. It has been a long time since the inventory was that low. And we are just starting our spring selling period. The least expensive condo is listed at $230,000. There are now 14 condos listed under $300,000 and but only another 11 listed between $3–400,000. There are a handful of worthy properties available under $300,000. But that doesn’t buy much size anymore. There were 16 new condo listings in the period and seven (7) are already under contract and in escrow.
Single Family Inventory
The inventory of single-family homes is up seven (7) to 35. The least expensive home on the market is at $609,000. There are new listings in the under-$950,000 market and a few more in the ~$1,200,000 range that are worth looking at. A beautifully remodeled A-frame came to the market and sold immediately with a back-up offer in place. These old A-frame properties are seeing a resurgence in popularity. In the early 2000s they were considered tear-downs.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down one (1) at 58 at period’s end. Of the 58 properties in “pending,” there are 41 in “Active Under Contract” status (formerly “back-up”). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up three (3) to 84.
Market Updates and News
Another big winter (actually spring) snowstorm rolled through and left outstanding coverage and ski conditions on Mammoth Mountain. Just in time for the spring break weeks. The midweek days this past week experienced good but not overwhelming crowds. Everyone seemed to be enjoying themselves. The coverage is now the best of the year. The water content figures in Mammoth Pass are much improved but the hard data is due any day. Hopefully it all suggests a beautiful summer with excellent access to the backcountry.
The senior skiers continue to complain about the loss of their ski pass discounts but it looks like the Ikon Base Pass will be wildly successful, at least in the number sold. Others are concerned that there might be “too many” new pass holders on Mammoth Mountain next season. The seniors should just buy the new pass and plan some road trips around their grandkid’s visits to Mammoth. I bought mine — it will be my 34th season pass. I hope I can get plenty of quality days on it.
According to the interest level I’m seeing, the new pass offering has spurned another wave of “crashpad” buyers. This phenomenon last occurred in the early 2000s. The reasoning goes; we have cheap ski passes so now we need a small condo where we can come-and-go as we please (and the snow conditions warrant) and leave all our stuff. And God knows we don’t want to rent…. And hence the term crashpad was originated. It is really all about utility although some people with $1M properties consider their’s to be crashpads. But in the local real estate market it helps to absorb many of the low end and less-than-desirable properties. After all it is only a crashpad.
Meanwhile, there is increasing evidence of more competitiveness in the nightly rental business. And the property owners may end-up being the primary beneficiaries. I’ve spent plenty of time in the Westin Monache lately and walking down the hallways I am seeing more and more wi-fi driven “resort locks” on the entry doors. This trend has been apparent for years in the other condo hotel properties but is now hitting the Westin hard. There are currently two 1-bedroom units at the Westin in escrow that the new owner (same buyer) intends to self rent via Airbnb, etc. He’s already doing it in the Village.
I spoke to the homeowners relations manager at the Westin Monache about this and she seemed disturbed by the trend but said her boss’s attitude is “they’ll be back.” But that hasn’t proved to be the case at the Village or Eagle. So how are they going to motivate owners back to the “front desk” operators?? I’ve said before that this has to be a goal for Alterra. ALL of the condo hotel front desk operation are now under their ownership. And these operations are significant revenue sources in the enterprise (I’ve seen the numbers in tax appeals). Losing these revenue sources (units) to an alternative rental model is a new challenge for the corporate jockeys. They are losing years of cash flow.
So the old “Quality, Service, or Price” mantra comes to mind. The quality and service aspects have certainly improved in the past few years (it had to). But can they really improve it much more to be significant to owners? Or will that and the dynamic pricing model be the answer? Or will cutting the management pricing (percentage) be the next step? There is a new trend. We’ll see.
Just this week there is announcement of a new rental company in Mammoth. They are an established international entity named TurnKey Vacation Rental. They have hired an long-time local resident with decades of experience in the hospitality business and have some truly unique technology behind them. They also charge 18% of gross on rentals. Their motto is “More Revenue. Better Service.”… And two local real estate agents have been promoting their new Ready 4 Rentals service that is totally Airbnb driven and they charge even less than 18%. So vacation rental management pricing wars are officially under way. We’ll see if Alterra is forced to join in. And no wonder two of the biggest and oldest reservation company owners sold out a year ago…
The local Town Council race hasn’t heated up yet but it should. I think most of the candidates are trying to figure out where they stand on the issues, or where they should stand on issues to get elected. Strong pressure on the low-end of the real estate market and tight rental supply continues to keep workforce housing the slam dunk issue. But other issues may present some contention. Speaking of workforce housing, here is my Q&A that ran this weekendin The Sheet.
And one of the lame duck council members who supports the Ice Rink and just returned from Banff stated that Mammoth as a community has psychological issues like PTSD and an inferiority complex for not supporting the Ice Rink development. But comparing Mammoth Lakes to Banff is asinine. Maybe a $15M ice rink wouldn’t be so hard to swallow if Mammoth was located adjacent to a transcontinental railroad and had 100 year old “grand” hotels and all of the wealth and philanthropy that comes with it. Maybe it is time to re-read my post from 12 years ago, A Long Road To Aspen. We can only hope that the new Alterra alliance can help with our psychological issues.
For more of my latest thinking on the Ice Rink, see below.
Two Westin Monache 2-bedroom / 2-bath units units closed at $560,000 and $570,000. Both are south facing units. Now there are no 2-bedroom / 2-bath Westin units on the market. So what will the next round of pricing be? And will these larger units now finally see the same type of appreciation as the Studio and 1-bedroom units have seen in the last 12-18 months?
More upward condo pricing at Krystal Villa, Mammoth Ski& Racquet, Bigwood, Mammoth Creek, Discovery Four, La Vista Blanc and The Summit.
A beautifully remodeled home on Aspen Lane closed for $850,000, only 2300 square feet and no garage. Old bones with some great lipstick. The single-family market remains strong.
Favorite New Listing For The Period!!
This probably doesn’t look like much, but this an older 5 bedroom / 3 bath home located on Ridgecrest Drive above the Village. It has killer views and has a great location on a quiet residential cul-de-sac. What makes this so interesting is that the home has been used as two units in the past, it is laid out that way. This was built before the incorporation of the Town of Mammoth Lakes and these things happened.
But what makes this an even more interesting opportunity is that following the Workforce Housing Action Plan of 2017, properties like this may be given amnesty for this “illegal” use and there may even be future grant money for improvements. None of this is finalized, but it is likely to be on the new Council’s agenda in the future. And applying for a variance for a big street-side garage would make sense too. So a new owner could potentially have a 3 bedroom / 2 bath home for themselves and a 2 bedroom / 1 bath legal apartment. That market rent could easily be in the $1400-1500 range or more. All with great sun and views, and close to the Village.
Listed at $749,000
Courtesy of Mammoth Realty Group
Other Real Estate News
So anybody that read last week’s issue of The Sheet knows that I was in a meeting some 10 days ago regarding the new Ice Rink/MUF. I was basically “called to the principal’s office” by Parks & Rec Director Stuart Brown to be corrected about comments made in the last issue of this newsletter. So I encouraged Ted Carlton (aka Jack Lunch) to attend (it was really the old HR move; if you know you are going to get shit on, bring a witness).
Stuart Brown is an affable Aussie who came to Mammoth originally as a marketing guy who ended up in Parks & Recreation. He could have made a good Intrawest salesman (if you know what I mean). So we got to hear his sales pitch. The best line was that beyond the Ice Rink and MUF, this facility in this location at Mammoth Creek Park will ultimately become THE “social gathering place” in Mammoth (doesn’t that require food and beverage?).
Without belaboring, here are my take-ways;
• Stuart handed me a massive spreadsheet of Parks & Rec facilities and maintenance items. They themselves were impressed with the fact that some items actually “went green for the first time” meaning they have been completed. But there is plenty to do and it all costs money. And after scrutinizing the spreadsheet this last week, my opinion is there are so many “dead” facilities on the list that have so much potential. Clearly they are grossly underutilized. So if Parks & Rec can’t make things happen at facilities that already exist, that doesn’t give me confidence that the Ice Rink/MUF will be any different. Or how about fixing the jaw busting gaps in some of the bike paths?? Or how about cleaning up all the garbage that blows into the forest around Shady Rest Park (that’s where I go for Town Clean Up)?
• Town Public Works Director Grady Dutton was also in attendance. He said he wasn’t concerned about the cost of building the Ice Rink/MUF but was concerned about the ongoing expenses, “especially energy.” For a guy who said he was “writing EIRs in 1970” (is he thatold?) and an engineer, I would like to know what kind of energy analysis he has done on this project. If he is concerned, wouldn’t that initiate some type of analysis?? Or maybe he has and doesn’t want to talk about it? Now I’m getting the feeling that if this alligator actually does get built, plenty of Parks & Rec maintenance may be deferred forever.
• This project just went out for bid. Last week the business world was reporting the termination of projects around the country because of the increased cost of steel due to the tariffs. Also, construction is booming in many places in California and the rebuilding of fire and mudslide destroyed properties is just beginning. Demand is high all over the West. It is going to be interesting to see how high these bids come in.
• Despite asking, nobody seems to have completed any sort of cost/benefit analysis on this project. Or at least one they are willing to share. Another handout Stuart gave me showed the current ice rink’s visitations. Total this year was 9,874. Peak was 2012 with 11,209. The average since 2012 is 7,380 per year. Annual visitation is about equal to a mediocre day on Mammoth Mountain. Of course it will skyrocket with the new facility. Or maybe we should be putting the $15M towards helping Rusty finish the gondola system?
• The Parks & Rec people assured us that they have studied dozens of ice rinks to “see what they did wrong” so the Town doesn’t make the same mistake. That reminded me of what an old helicopter pilot once told me; “Everything I do is to keep it from crashing.”
• One of the handouts I gave themwas a Washington Times article from 2015. The key pull-quote is;
“This is such a ludicrous waste of taxpayer money. I would say to all politicians ‘Let it go’ and not spend any more money on ice rinks,” said David Williams, president of the Taxpayers Protection Alliance, a government spending watchdog. “Ice rinks are not a priority for most citizens. Fixing the streets, making sure people are protected, those are the government’s job. Ice rinks are a luxury, a vanity project, and should be privately funded.”
That is what Eldon Beck told us in 1993.
Meanwhile, thanks to so many old-time local residents who have expressed appreciation for keeping this rant going….