Bluesapalooza Comes And Goes, Locals Astonished By The Crowds!
Market Summary: July 21 — August 4
At the period’s end the condominium inventory is up nine (9) to 128. There were 32 new condo listings in the period and six (6) are already in escrow. Again, appealing new listings are attracting buyers. This can be the “dogs days of summer” in the Mammoth real estate market and activity can be slow, but not in this segment of the market in 2019. Most are new IKON Pass holders and buyers looking to get in the short term rental (STR) business. Lower interest rates should only increase the activity.
Single Family Inventory
The inventory of single-family homes is up another another three (3) to 62. There are now four (4) homes listed under $600,000. There were a number of price reductions during the period — so the properties are clearly beginning to compete with each other. And many local families are out looking for homes and weighing what will sell at current prices and what will be reduced. Lower interest rates will help them “reach.”
The total number of properties in “pending” (under contract) in Mammoth Lakes is down four (4) to 63 at period’s end. Of the 63 properties in “pending,” there are 25 in “Active Under Contract” status (formerly “back-up”). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down three (3) to 90.
Market Updates and News
This year’s Bluesapalooza crowd was finally rewarded with smoke-free air and perfect mid-70s temperatures. What a change from the recent past. The previous week brought a day of substantial rain to the region including some lightning strikes. There were fire crews and helicopters attacking some hot spots in the back country this past week, but thankfully none of this got out-of-control.
The Blues crowd had to be bigger than ever. The traffic congestion in town (along with the closing of Minaret Road for the event) had many local residents wondering if this week becomes one to be out-of-town. Or maybe just plan to hide. The event continues to bring major headliner bands and talent to town. It is really just a matter of time before more promoters see Mammoth as an attractive destination venue. But the Town needs to work on a consistent and viable location for such events. Can a $25 million ice rink really top the cost/benefit analysis list?
MMSA’s Chief Executive Officer Mark Brownlie gave a nice presentation last week on the future of the Ski Area. He is a refreshing change. There were about 45 in attendance at the Chamber of Commerce event. A surprisingly low attendance for what might be learned. But The Sheet concisely covered the event in last week’s issue. One point that was missed in their article is that they had 530,000 “paid” visitors last year. That is an impressive number but that could go down next year as IKON Pass sales in SoCal are “through the roof” according to Brownlie. If they can hold that number of visitors who pay the steep rate for a lift ticket then revenue numbers should be even stronger. Their stated goal is to average 1.8M skier days by 2024.
Another point was the capital expenditure on the new zip line (the Mega Zip). They have spent $4 to 5 million and it isn’t operational yet. It is an engineering feat and subject to State oversight. But Brownlie believes it will be a major summer attraction. He also believes the Via Ferrataclimbing experience built around the Roger’s Ridge area of the Mountain is a “must do” in Mammoth. He also expressed that a mountain roller coaster is in the future. These have become very popular in other resorts. All of this will certainly make Mammoth Mountain an increasingly popular summer destination.
Also not covered in The Sheet article was that the proposed Canyon Lodge interior improvements came in over budget so that have scaled the project back a bit. There was no word on the re-development of Chair 16/Canyon Express.
The new Mono County Administrative building took major form during the period (see above). The concrete “tilt up” structure is located on the “McFlex” property between Main St. and the hospital (owned by the County, Town and Hospital District) behind the new police station. This is after years of internal debate about continuing to lease office space, purchase, or build. The efficient building process is what pushed the County to build. They admittedly have to keep the contractor within budget.
But the Town could have been part of this development. Instead they continue to lease office space long-term. Hmmmm…. so the Town Council doesn’t want develop an ice rink on leased land but they are more than willing to continue 30+ years of major office leasing (in the Minaret Village) when they could have joined the County in developing a joint County/Town administrative building? Clearly, more arbitrary decision making.
The Chamber of Commerce keeps talking about alleviating the workforce housing crisis by working with second homeowners and converting their properties to long-term rentals. They keep talking. I have been skeptical because there is always some level of usage (beyond rentals). And owners seem to be endeared to this low level of family and friend usage no matter how dated or unproductive the property is (believe me, there is plenty of it out there.) But looking at the STR rental numbers of a large variety of units over the past year, there is a volume, maybe hundreds of units, that would be better off placed on long term rental. And maybe even paying for those family and friend rentals somewhere else. These properties are in worn, dated and stale condition with deservedly unmotivated rental agents. These are the Chamber’s target. If only they can get past the occasional family and friends usage.
With the big (on the Richter scale) earthquakes south of Mammoth in the Ridgecrest/China Lake area, the most recent popular question has been about earthquakes and Mammoth real estate. So here is this week’s Q&A appearing in The Sheet.I wonder if there were any guests sober enough to read it?
And the Mammoth Town Council has no meetings agendized in the immediate future. Some members are on extended vacations. Other would like to stall decisions on workforce housing, ice rinks and sprung structures, etc.
And for some reason many of my readers got the impression in my last newsletter that I was planning on moving out of town in the near future. Not so. I’m sure there are some people that would like me to leave. I have work to do and hopefully lots more skiing too. But really long winters can wear on you.
The least expensive sale for the period was an in-town garage/storage unit; 300+ square feet of garage with a 200 square foot loft. Garages are coveted in Mammoth, even if they aren’t attached to your home.
The two most expensive sales of the period, single family homes at $1,382,500 and $1,675,000 were both cash sales.
With 12 low-end condo sales and two high-end home sales, the sales mix of the period looked very familiar.
An oversized Sunstone 2 bedroom / 2 bath with an amazing view closed for $600,000.
A nice 3 bedroom San Joaquin Villas unit with a huge garage finally closed for $410,000. This is a really nice (and newer) property for the money. But it was on the market a long time. The problem? The second bath didn’t have a shower…
Favorite New Listing For The Period
Other Real Estate News
Anybody who has bought or sold real estate in the past few years probably dealt with “contingency removal.” It has become a big thing. Some agents are like rabid dogs chasing down various stages of contingency removal. The ultimate contingency removal is removal of ALL contingencies. Some agents even believe the transaction is complete when that happens. But there is certainly more to it.
The California Association of Realtors (CAR) produces the bulk of the standard forms used in residential real estate transactions in the state. Today, the process is ongoing with designated committees of brokers and agents and the legal team. And revisions take months if not years of back-and-forth. And the library of forms is large and grows every year. Some of it is thanks to our State legislature, and some of it thanks to lawsuits and case law. All of it designed to “protect” the buyers, sellers, and of course, the agents and brokers. It has evolved substantially in the past 20 years.
In the late 1990s CAR recognized a real problem in California real estate transactions. The state had become multiculturally diverse. And many of those cultures had very different ways of conducting transactions. At the time the standard purchase agreement had many potential “holes” based on different cultural interpretations. So CAR embarked on creating a new purchase agreement that truly spelled out exactly how a transaction would flow. Within a few years it became a sophisticated purchase agreement and joint escrow instruction document. It dictates the process and procedure of almost all residential transactions in California today. It works well and very little is left up to interpretation. And it has made all of the parties less vulnerable to litigation.
With this mature purchase agreement (the RPA) has come a host of other documents including extensive disclosure forms and also forms that act on certain time frames within the RPA. What I have found is that many younger agents who have learned the business with all of these forms have simply become what I refer to as “check-box realtors.” They check boxes on all the forms and the master file form that their broker wants to complete the closed escrow file. And when all of the forms and boxes are checked the transaction is complete (and most importantly commissions can be disbursed). They spend little time actually thinking about the transaction (like we had to before all of the forms). (BTW, I believe in Make America THINK Again.)
So the Contingency Removal form has become the holy grail for many agents. They push and push to get the buyer to remove all contingencies. Conceptually the CR is about keeping the parties (especially the buyer) moving towards closing. “Time is of the essence ” is fundamental to a real estate transaction. But many agents think it means the transaction is complete. And if the buyer doesn’t close the deposit automatically goes to the seller and the transaction is canceled. They obviously haven’t been in the situation.
There is this thing called escrow. And escrow has the deposit. And escrow doesn’t do anything including release the deposit without mutual instruction from the buyer and seller. Nobody makes unilateral decisions. That is the civility of escrow. The buyer has the seller tied up. And vise versa.
The RPA also includes mandatory Mediation and Arbitration provisions. These are both time consuming and expensive alternative dispute resolution methods. They are rarely used. In theory they are great. In practice they are cumbersome. Attorney buyers and sellers love to cross out the Arbitration provision.
Ultimately the parties have to get back together and work it out. Maybe it takes another week. Maybe one party, or both, makes a concession. Or maybe the seller is advised to cancel (with the buyer), forget the deposit, and get the property back on the market. Nothing happens automatically.
So the next time your agent sends you a contingency removal form to sign, ask him/her a few questions and ask about the ramifications. It’s good to think.
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Thanks for reading!