Market Summary: June 7 — June 21
The Mammoth Lakes MLS is reporting five (5) real estate closings for the period ranging from a low of $67,000 to a high of $625,000. All five (5) escrow closings were cash purchases. This period last year there were 13 closings. The 10-year Treasury yield settled downward at the end of the period to .697%. Mortgage rates are excellent and there is talk the 30-year conventional rate mortgage may go below 3% in 2021. There is more anecdotal evidence lenders can get new loans funded in a 15 day timeframe. Amazing. Are we at “time and stability” already?
Condominium Inventory
At the period’s end the condominium inventory is up 10 to 109. It was higher than that during the period but properties went to escrow. There were 17 new condo listings brought to the market during the period and one (1) has already gone to escrow. Snowcreek remains as the strong seller. Units #264, #543, #637, #866, #971, #1104 and #1196 all went to escrow in the period. The new townhome project on Old Mammoth Road, the “540 Project” is available for reservations/sales. The prices range from $519,000 to $695,000 for 2 and 3 bedroom units. They all have garages and can be rented on a nightly basis. Right in the middle of town with great access to everything. Developed by longtime Mammoth developer John Hooper. This time last year there was exactly the same number (109) of condos on the market.
Single Family Inventory
The inventory of single-family homes is up five (5) to 39. That includes seven (7) new listings, but we’ve seen a few of them before. There are only 16 homes listed under $1,050,000. This time time last year there were 40 homes on the market.
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes is up 13 to 52 at period’s end. That still includes the 16 Obsidian Villas units. With the foundations unpoured for the balance of the project (16 of 20 total units) some of those potential buyers may be looking elsewhere. Of the 52 properties in “pending,” there are 22 in “Active Under Contract” status (formerly “back-up”). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 14 to 83. This time last year the pendings were 56 and 79 respectively. With STRs and campgrounds available in Mammoth Lakes and County-wide the property showings are increasing and sales should follow. My observation is we could use more quality inventory.
Market Updates and News
The Mammoth Lakes reopening is proceeding. STRs opened in Mammoth this weekend and the lodging industry is back in business. So far there is a decent crowd here but certainly not overwhelming. Far more than anytime since mid-March. Normally the Motocross crowd would be in town this time of year. They would be a welcome sight for local businesses. Restaurants are opening with most offering indoor and outdoor seating. As bigger crowds move into town (as anticipated) there may be more outdoor dining offered. There is plenty of to-go business happening. Curiously, there are a few restaurants not opening, and we know Slocums and Nevados have retired (as expected). Mammoth Mountain will reopen next week on June 26. That is great news. The Bike Park and scenic gondola rides will open.
The community continues with aggressive testing with well over 1,000 people now tested for the virus locally (it has become almost fashionable to be tested). There have been no new cases in over two weeks. But like so many places around the country, we’ll just have to see how this plays out in the coming months. From my vantage point most visitors are not wearing masks in the general public but are prepared (required) when entering a building. Still some aren’t.
Dr. Tom Boo at the Mono County Health Department issued some new guidelines in the past few days for STR. The hotel/motel and condo hotel properties should restrict occupancy levels to 75% of capacity each week and are encouraged (but not required) to maximize the number of properties vacant for 24 hours between occupancies. The 75% occupancy capacity is new but all reservations made prior to June 19 can be honored. Condo STRs are required to have 24 hours between occupancies. And again, all reservations made before June 19 can be honored. These restrictions remain in pace until September 30. But they will be reviewed every two weeks to see if the infection rate is growing locally.
Summer on the calendar finally brought consistent warm weather to Mammoth. It was a long winter, very long winter. My records showed I started heating the house on September 18 last year and I still had some heat on just a couple weeks ago. It was also one of the driest winter’s on record. There were two small forest fires in the backcountry vicinity most likely caused by lightning last weekend. Fire crews were aggressively moved in via helicopter and other helicopters were utilized to drop water on the fires. One day was quite windy. Thankfully they were contained and are basically out.
If the summer proceeds as we all hope it does, the toys of summer will be electric bikes (ebikes) and multi person off-road vehicles. The ebikes will include local rentals (very popular) and increasingly the individually owned. As the number of active riders goes up, so will the calamity. Hopefully nobody gets injured. Plenty of ebike riders think they’re reprieved from wearing helmets. Big mistake…. The off-road vehicles now come in all sizes and degrees of elaborate design. While some are licensed to drive on the street, most are trailered and will utilize the extensive forest management roads in the area. And again, the more there are the more for potential calamity. Luckily, if you are on a mountain bike you can hear them coming.
The Mammoth Hotel renovation project at the downtown Sierra Center Mall converting it into a 160 room hotel is on hold for now. Besides the Covid-19 hiccups, construction of the new County administrative building is dragging on. Many County employees are working remotely but the offices are still there. Some of the “evicted” tenants will be there through the summer and maybe beyond. Starting construction projects in fall can lead to headaches. But we’ll see. Sooner or later the building will be very vacant.
I’m working on a Q&A column for 4th of July weekend addressing the prospects for the local real estate market in the balance of the year. There are lots of dynamics playing out that affect Mammoth and the eastern Sierra in a positive manner. One of them is the Digital 395 project that most have now taken for granted. Up until a few years ago telecommuting would have been unattractive in this area. There simply wasn’t the bandwidth to do more intensive style work and the now ubiquitous Zoom meetings. Now you can basically have all the bandwidth you want (as long as you pay for it).
And so far there is no apparent panic selling from STR owners. The condo inventory numbers (above) would show it. In fact, if rental demand for summer and fall is high, the algorithms will push up rates and owners may have the chance to recoup some of their loses. That would be nice for STR owners and the Town. Mammoth also wins because it is a “drive-to” resort yet relatively isolated. Conversely, there are plenty of vultures swarming believing prices will soften, and maybe substantially. But more on all of that later.
The Town continues to monitor their financial position based on TOT and sales tax projections. Based on “new” information this past week it may not be as bad as originally thought. It really depends on what happens the next 3 to 4 months.
Noteworthy Sales
An upgraded and end-unit 1 bedroom / 1 bath in Snowcreek Phase I sold for $359,000. Probably a nice little buy for this efficient floorplan that includes an “alcove” area that is great for bunks or other purposes (office) and has a washer/dryer hook-up in the unit. Close to the common area spa and Red Line shuttle. Excellent utility.
A slightly upgraded 4 bedroom / 3 bath townhome at Mammoth Estates closed for $625,000. These units may be 50+ years old but they are a short walk to the Village gondola. There isn’t much on the market in this price range.
Favorite New Listing for the Period
The planned Westin Monache renovations have been put on hold until the fall or next spring. But the owner rental reserves have been moved to deposits and the new furnishings and decor have been ordered. The facility is still the premier hotel facility in Mammoth. I was in the project in the last few days prior to the reopening and the hallways are especially worn. The units are fine except for some lumpy sofas. So here is unit #301 that is a corner 2 bedroom / 2 bath with views up to Mammoth Mountain and the Mammoth Pass. You can check out the video tour here. This unit grossed $90,000 in rental revenue in 2019.
Listed at $639,000
Other Real Estate News
The California State Board of Equalization and County Assessors are preparing for a painful future for commercial property assessments. It could be a confusing combination. First they are preparing for a deluge of Prop. 8 reductions due to the impacts of Covid-19 and the resulting loses of rents and tenants. Secondly, the California Tax on Commercial and Industrial Properties For Education and Local Government Funding Initiative will be on the November 3rd ballot. With all of the other crazy stuff going on in the world this has, and may not be, on anybody’s radar.
The Prop. 8 assessment reduction is what Mammoth Mountain Ski Area argued for in last year’s hearings for the drought years of 2012 through 2016. Their revenues were down significantly and they were justified in arguing for the reduced assessment. So commercial property owners who experience declining rents due to the lockdown and subsequent economic fall out are certainly going to be justified in requesting Prop. 8 reductions. The problem? Proving the exact damage can be an extensive and expensive proposition for both the taxpayer and Assessor’s office. And in commercial cases, the burden of proof falls on the taxpayer/property owner. Both parties may move into “negotiation mode”, but the State can ill afford dropping property tax revenues.
Meanwhile, the ballot initiative proposes the “split roll” which could remove commercial and industrial properties from Prop. 13 protections. It would make them regularly reassessed at market values. Many of these properties are owned by “entities” like LLCs and corporations that actually change true ownership but not technically for re-assessment. This is the major argument, all in the name of pumping the new tax revenues to schools and local governments. There are major lobbying interest on both sides. It will get noisy. The Board of Equalization estimates that if the initiative passes there will be the need for an additional one thousand commercial appraisers in the State just to process the new assessments and likely appeals. There might be a similar need for an additional thousand appraisers on the private side. It could become a growth industry and a career opportunity for many.
Thanks for reading! Stay healthy!