Mammoth Decelerates After A Hectic Winter!
Market Summary: April 28 — May 12
The Mammoth Lakes MLS is reporting 18 real estate closings for the past two week period ranging from a low of $250,000 to a high of $899,900. Of the 18 escrow closings, all 18 were financeable properties and 10 were conventionally financed. The sales mix included three (3) condo hotel Village units and two (2) high-end Snowcreek townhomes. The 10-year Treasury yield moved slightly downward to 2.455%. The majority of lenders are quoting 30-year fixed mortgage rates right around 4%.
Condominium Inventory
At the period’s end the condominium inventory is up eight (8) to 94. There were 17 new condo listings in the period and three (3) are already in escrow. The new condo listings are all over the board in location, size and pricing. But new listings with solid attributes are capturing good selling prices.
Single Family Home Inventory
The inventory of single-family homes is even at 33. There are 17 homes listed under $1M. A home listed at $469,000 came back to the market after it was reported sold. The tax records show that it did sell for $440,000. Weird. Maybe somebody had to park some money. Or got a quick case of buyer’s remorse?
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes is down 10 to 49 at period’s end. Of the 49 properties in “pending,” there are 19 in “Active Under Contract” status (formerly “back-up”). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down 11 to 74. Looks like the spring selling season has slowed in the Mammoth region. There are still plenty of buyers looking, but just not finding what they want to pull the trigger on.
Market Updates and News
Mammoth has settled into a spring routine; the town is quiet during the week but is still drawing a ski crowd on weekends. Some restaurants have closed for a spring hiatus. The snowpack is melting quick and serious clean-up has begun. The Town has been busy filling pot holes all around. Major construction projects are moving into full swing including very visible sidewalk projects on Main St.. The official Town Clean-Up is slated for June 8. Mammoth will start greening-up, especially since there are spring showers consistently in the long-range forecast. Many local residents are taking vacations after a very busy and long, cold winter season. But it sure beats a drought.
The Mammoth Town Council agenda has been rather mundane. Discussions about the Ice Rink/MUF are quiet for now. They have engaged a consultant to begin the conceptual land use planning of The Parcel workforce housing property. They expect public forums to be held by August. They have established a new “Parcel headquarters” to centralize all of the planning and community outreach. So far, so good….The Mono County supervisors condemned the recent Wheeler Ridge/Rock Creek hydroelectric plant proposal. Words like “insane,” “horrible and ridiculous,” and “appalling and far-fetched” were used to describe the proposal. But the supervisors were reminded that they may have limited authority over the project. And so far, no comments from the Sierra Club…. And The Sheet reported this week that the Inyo County supervisors believe that the Bishop Airport will be ready for commercial air service by the fall of 2020.
The first YotelPad “selection event” is scheduled for June 18. The first round of deposit holders (“Tier 1”) can now receive specific, final pricing on units. Interestingly, 50% of the units are priced under $400,000 and 75% of the units are priced under $450,000. That is a fraction of what the Westin Monache units originally sold for some ~14 years ago at the “pre-sale” event. The YotelPad development team is also being conservative about the start of construction; they are saying most likely the spring of 2020. There may be some preliminary work completed on the site this summer and fall but the new construction may not happen for a year. They estimate it will take 18 months to build. The bulk of the structure will be prefabricated modules delivered to the site.
Speaking of the Westin Monache, owners received specific details of the unit refurbishment plans during the period. It is all very interesting and so far I have seen no specific reaction or uproar in the local real estate community, yet. The rumor for some time has been that the cost to the 2-bedroom owners would be in the $30,000 range. It is now twice that. The $30K range is for Studio units. The 1-bedroom units are in the ~$40K range depending on square footage. The plans include replacement of all of the furniture, appliances, flooring and soft goods. The kitchen cabinets and bathroom vanities will be painted to match the new decor. The interior paint budget for the 2-bedroom units is $7,000.
There are other details and incentives. There are some 0% financing options available on a first-come first-served basis. The front desk operators (essentially Alterra) are offering a discounted management fee for the next five years (although the agreement I read said three years). The refurbishment construction is slated to begin in fall of this year and owners won’t be able to access their units during the construction period. There will certainly be a push to have the work completed by the end-of-year holidays. And most importantly, units that are not refurbished will not be allowed to stay on the Westin rental program. Marriott is apparently mandating a high percentage of refurbished units in order to retain the Westin brand at the project.
So far none of the current Westin Monache listings are reflecting this new information. And how this will affect values or the inventory of units for sale is yet to be determined. Each unit that has been on the Westin rental program has a certain level of “rental reserves.” Most are in the $10,000 range. That helps. Current sellers may have to offer some small credits to potential buyers. Ultimately, new owners should benefit from the refurbishment, but it is costly just the same. And will Westin be able to charge more for the newly refurbished units?? And Alterra certainly wants the property to remain a Westin; they need a high-end flagged hotel for their new, demanding out-of-area IKON clientele.
In the meantime there may be an open door for third party off-site rental companies to make inroads into the project. Owners could do their own upgrades like the other condo hotel properties in the Village and Eagle. That wouldn’t be best for the Monache project but it is certainly a possibility. Alterra needs to be bringing these condo hotel units back to their front desk operations, not losing more of them. It will be interesting to see how all of this works out.
Noteworthy Sales
A small but recently remodeled townhome sold for $425,000. The property sold a little over year ago for $100,000+ less than that. So now two recent buyers have purchased the property without recognizing the serious incurable defect of the property.
A Studio + loft unit at Mountain Shadows closed for $250,000. For small units these are some of the best values in Mammoth. They are upstairs units with vaulted ceilings. They have two full bathrooms. The loft is really like a master bedroom/bathroom. When I started in the Mammoth real estate business 33 years ago my broker at the time referred to these units as “bread and butter” sales. At the time they were selling in the $50,000 range.
Favorite New Listing for the Period
This property has so many the most popular attributes on the Mammoth buyer’s “wish list.” This is Juniper Crest #14 and it has an expansive view looking up to the Mammoth Pass including views of Mammoth Rock, it has easy ski access to Eagle Express/Base, it has a large private garage, a private spa, immediate access to the Town’s bike path system, and strong rental potential both winter and summer.
These properties were built in the mid-2000’s. This is a 3 bedroom + loft / 2.5 bath property and features a gas fireplace and gas cooking and hydronic heating. The property has numerous upgrades and is in excellent condition.
Priced at $1,149,000
Courtesy Century 21 Mammoth Realty
Other Real Estate News
Airbnb was all over the news during the period. Some of it good and some of it bad. I received an email from learnairbnb.com about how Airbnb hosting is becoming a “lifestyle.” It is becoming “a community of like-minded, open-minded people from all over the world, who share in the love of getting to know new people and making friends from all over the world.” And because Airbnb hosts are incentivized to stay in other Airbnb properties the community and lifestyle should indeed grow.
But according to the Wall Street Journal, Marriott is planning to get into the home-rental business very soon. Marriott already is the largest hotel chain in the world by room count. Their first aim appears to be at business and corporate travelers. They already have nearly 400,000 companies as their customers. But other hotel companies have tried to dabble in the home rental business without great success. Unfortunately for Airbnb this new threat of a well funded and organized competition may be poor timing with the recent sideways IPOs of Lyft and Uber. Airbnb’s IPO is in the offing. I can imagine they want to go public ASAP.
And US News and World Report ran a recent article “Is Airbnb Ameliorating — or Exacerbating — Inequality in Cities?” While the article points out the economic stimulus provided by Airbnb including millions in tax revenues for local municipalities, the downside is a “chain of rising rents” for the more economically disadvantaged. A 2018 study in New York City claims Airbnb alone has increased rents for median tenants by $380 to $700 per month in varying neighborhoods.
In the meantime cities and regulatory agencies have been “overwhelmed” by it all. The article points out that Airbnb “hosts” appear to be proficient at evading requirements. Some cities have pursued outright bans on the service. Others are simply trying to collect taxes. Neighborhoods are changing radically and there is serious pushback. The balance between community and tourism is out of control in many places.
Here in Mammoth the interest in owning a short term rental property is not going away. It isn’t for everybody and performance can vary greatly depending on the size, location, etc. of the property and owner motivation. In the past few years we have seen some owners jump in and be very successful. Others are disappointed. Some realize they can’t be bothered. For those thinking about it, here is some great information on the subject from a very sharp CPA/attorney.