The Weather Turns Wet With Some Dusting of Snow In The Higher Elevations!!
Market Summary: September 23 – October 7
Condominium Inventory
At the period’s end the condominium inventory is up two (2) to 101. There were 13 new condo listings in the period and none have gone to contract so far. That includes three new listings at Mammoth Green. There are 41 condos listed under $400,000.
Single Family Inventory
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes is down three (3) to 60 at period’s end. Of the 60 properties in “pending,” there are 34 in “Active Under Contract” status (formerly “back-up”). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down nine (9) at 107. Once again, I would normally expect these numbers to be going up this time of year.
Market Updates and News
The weather turned cooler and wetter this last week much to the delight of those wanting snow. For those trying to complete construction projects, it wasn’t welcome. That includes the Grocery Outlet project on Old Mammoth Road, the Main St. sidewalk projects, the condos under construction at the Village and Canyon Lodge, and a whole variety of new and remodel projects around town. Dealing with rain and snow simply adds costs to the overall projects. Such is Fall in Mammoth.
By now most of us have received our Sample Ballots for the election next month. Proposition 5 is also known as the Property Tax Fairness Initiative and it is sponsored by the California Association of Realtors® (CAR). Every CAR member was forced to pay a $100 surcharge on the 2018 membership fees to push this initiative. The initiative is an interesting dynamic. CAR believes, if successful, the new law will open up more housing opportunities, essentially increasing the supply of listings in the market.
What Prop. 5 would do is replicate and expand upon the current property tax rules of California’s “reciprocal” counties. For instance, Los Angeles and Orange Counties are “reciprocal” counties. Seniors with low property tax bases (regulated by Prop. 13) who sell can transfer their historic low tax bases into these reciprocal counties. But many rural counties, like Mono (Mammoth Lakes) and Inyo (Bishop) are not reciprocal counties. Historically, the Assessors of these counties do not want to compromise their local tax rolls with these lower tax assessments.
CAR believes these non-reciprocal counties are preventing many seniors from selling their highly-valued legacy primary residences and moving to suburban and rural counties with lower prices. They are simply afraid of purchasing a new property and being saddled with a new and much higher tax base and payment. CAR argues that these seniors who are resistant to move are limiting the opportunities for younger buyers. (There is also the argument that this would create more transactions and ultimately more commissions for the membership.)
CAR has dubbed this as the “portability” of the tax basis. Prop. 5 would force all counties in California to honor the historic tax bases of seniors — essentially make all counties reciprocal counties. The expanding features of Prop. 5 would also make the portability available to the severely disabled and victims of disasters.
On face value the initiative should appear to be a positive thing for both seniors and the younger generations. The natural opposition might be the State Board of Equalization and the local Tax Assessors. As a government entity the BOE shouldn’t be taking a position. Theoretically the passing of Prop. 5 should create “movement” in the real estate economy and that is typically good for the whole economy. The brief description in sample ballot states that it could result in $100 million in lost property tax revenue for the State and that the loss would require a “backfilling” of school bond requirements. I’d like to see the math. That will be CAR’s challenge as we move closer to the election.
The impact locally could be significant. Places like Mammoth and Bishop are still limited in supply and almost everything is still selling at below replacement value. Hypothetically, ~100 new seniors moving their primary residences to the area would be significant. If that number went to 4-500 that would be profound. We’ll have to wait and see. CAR is well funded to promote the initiative. I’m sure the noise will start at any moment.
The new Starbucks location opened during the period in the old McDonalds location at the entry to town. It is purported to be the largest company owned Starbucks in California. But what is interesting to me is that the McDonalds company and brand has rebounded significantly since its downfall of a few years ago. That is when this long standing McDonalds outlet in Mammoth was jettisoned. I’m wondering if they regret letting this location go? After all it is one of the first facilities at the entry to town (prime “traffic counts” and visibility as the commercial pros like to refer to it). The visitors certainly know it is there.
Ultimately, can a Starbucks produce more revenue than a McDonalds? Especially when there are two other (very convenient) Starbucks outlets and other very popular independent coffee stores available. Time will tell. Mammoth can be a funny place, I wouldn’t bet against the location being a McDonalds again sometime in the future….
And as an aside, the patch of lingering snow on Dave’s Run is almost gone. Hopefully that bodes for a heavy winter.
Noteworthy Sales
Some of the better condos that were on the market at Labor Day have closed escrow. They include properties at Winterset, Villa De los Pinos, The Summit, and Snowcreek I.
A nicely remodeled 2 bedroom +loft / 2 bath at The Summit closed for $610,000. This specific unit has been in escrow for a couple of months. Similar units in un-remodeled condition were selling in the mid $300K range just 18 months ago. The location has good access to Eagle Express, so that location and the remodeled condition are bringing premium pricing.
A small home in the Slopes on a pie-shaped lot closed for $650,000. This home had been on the market for awhile and this property has changed hands a number of times in the last decade. There is no room for a garage. This segment of the market is tricky right now. Buyer beware.
…..On the other hand, a 1989 vintage ~2700 square foot home with a 1-car garage in Old Mammoth closed for $599,900.
A large floorplan Stonegate unit closed for $1,575,000 or $463 per square foot. That’s an impressive sale. A little more and the values are getting back to peak values. But the property is legal for nightly rentals.
Favorite New Listing For The Period!
Other Real Estate News
I’ve been to both private and public presentations down at the Mammoth Lakes Foundation in the past few months to view the plans for the Mammoth Arts & Cultural Center. The plans are impressive; the Center would include an indoor theater seating almost 300 and a lobby/reception area that could host catered parties of a similar number, an outdoor amphitheater, and various other amenities. The goal is to create THEplace in Mammoth for the increasingly popular calendar of local live performances, film festivals, lectures, conferences, community functions, and miscellaneous other events.
The Foundation personnel believes it is a “$18-20 million” project as it stands but “we won’t know how much it will really cost until we get the bids.” The local contractors have told me it is really like a $30 million project (sounds familiar?). The Foundation has $13 million in commitments so far from public, private and corporate sources. They are actively soliciting “large” commitments (so if any of my readers have deep pockets and would like to be involved that would be great). They plan to solicit “smaller” donations (like pavers) later on.
I’m really hoping this project is successful. The Foundation has the mojo of the Dave McCoy legacy. The location is ideal. It is ambitious but viable, sooner or later. But again, the construction costs in Mammoth are a limiting factor especially for large, custom built clear-span buildings.
Meanwhile, the Foundation’s relatively new executive director is Rich Boccia. He’s a perfect fit for the job as a former public educator and administrator. He has already sat in two other executive positions in Mammoth and knows all of the players. If anybody can get this project into the ground and operating it is him. But I have posed another far more viable and valuable program to him that could benefit the community even more so (in my opinion); a hospitality curriculum at the college.
A hospitality college here in Mammoth was at one time the goal of the Intrawest corporation. It was actually one of the driving forces for building the college facility in the first place. Intrawest was instrumental in developing the “Ambassador program” in Whistler that deeply educated the service concept into the local workforce. It is one of the foundations to the success of that resort. Because Mammoth was their only resort that had an actual college, Mammoth was to be the perfect place to have a hub of hospitality education. The plan was to make it a corporate training ground for all levels of employees and managers. It would benefit not only Mammoth but the corporation and all of the other resorts the company owned and operated.
But the concept never got off the ground because Intrawest departed before it was implemented. And Starwood didn’t care. Today the facilities exist and the college is full of “empty classrooms” as Boccia says. Now it is a great opportunity for Alterra Mountain Company. It is a “long term thinking” proposition. Most of the curriculum can already be found at places like Cornell University. Alterra has enough resorts to make it viable and valuable. They should desire consistent systems throughout their resorts. And have the most highly trained service personnel at all levels.
Sadly, it goes back to the concept that people want build things but not maintain them. We have a lovely college facility with “empty classrooms” all day long. The Foundation and Alterra need to be encouraged to utilize the facility to the benefit of everyone, including the corporate bottom line.
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Thanks for reading!