Everything Is Selling, And Time Is of The Essence!
Market Summary: August 2 — August 16
The Mammoth Lakes MLS is reporting 18 real estate closings for the period ranging from a low of $265,000 to a high of $975,000. This period last year there were an identical 18 closings. Of the 18 closings, 17 were financeable properties and 13 were conventionally financed. There were another seven (7) Snowcreek closings. Snowcreek remains hot, hot, hot. There were only four (4) condos sales under $500,000. The 10-year Treasury yield moved up noticeably to .709%. Rates remain quite attractive. The mortgage pipeline is full and appraisal delays here in Mammoth are stalling closings. There are just so many appraisers who work (and have the knowledge) of the area. Fannie and Freddie announced this week that there will now be a 1/2 percent premium on cash-out refinances. One local loan officer stated to me this last week, “Buyers are actually qualifying for loans, it isn’t the funny money of the 2000s.” How things have turned around in the past four months.
At the period’s end the condominium inventory is down another 13 to 79. The market should be building to the normal Labor Day weekend peak of inventory, but not this year. There were 31 new condo listings (same as last period) brought to the market during the period and nine (9) have already gone to escrow. There is very strong activity in the condo segment of the market and it seemed as though it accelerated this past week. There were numerous incidences (including several with me) of multiple offers on properties. This time last year there were 129 condos on the market.
Single Family Inventory
The inventory of single-family homes is down two (2) to 36. There were seven (7) new home listings in the period. Many of the ~$1M homes that have sat on the market for prolonged periods are selling. And the $2M and above listings are beginning to sell. This time last year there were 67 homes on the market.
The total number of properties in “pending” (under contract) in Mammoth Lakes rose a whopping 44 to 164 at period’s end. But even that number is deceiving. The market is so active that there are now “off market” transactions happening that are not being reported in the MLS. I was involved in one last week. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 41 to 212. The concentration of activity appears to be in Mammoth Lakes. Last year there were 64 and 98 respectively.
Market Updates and News
Large volumes of visitors continue to occupy Mammoth. It has been perfect summer weather with a hint of smoke, but most visitors won’t notice. The Tourism professionals who are coming under greater scrutiny recently stated that the “traffic” numbers are actually very close to last summer. This may be so but is sure seems like a bigger crowd. Maybe there are more people in each vehicle counted this year. The popular recreation areas like the Lakes Basin are losing their appeal due to overcrowding. Bicycles are everywhere including large groups (families) causing traffic snafus and questionable riders on rental ebikes. The shuttle loading of mountain bikers from the Village to the Main Lodge appears busier than ever.
If it weren’t for people wearing masks, the evidence of a pandemic is hard to detect in Mammoth Lakes and the High Sierra. Eating and drinking outside is quite comfortable in the Mammoth summer and most establishments continue to expand their outdoor seating and eating and drinking opportunities. I have a feeling it will become more popular and condoned in the Mammoth summers ahead. And maybe even during colder periods. The Mammoth restaurant industry is being very proactive. Last Friday they were commended by the Mono County Health Dept. for their testing and screening cooperation and their employee education and use of PPE. The Health Dept. also stated that they are unaware of any transmission of Covid-19 from any local restaurant to any member of the public. Hopefully by the colder season the local industry is allowed to have indoor seating.
Last week the Health Dept. did issue new requirements on lodging properties and STRs that begins August 24 and are to remain in effect until April 21 of next year. Overall occupancy levels should be reduced from the current 75% to 70%. All bedding and linens shall be laundered between stays with no exception. And all kitchen supplies shall be washed between stays. And all units shall have a 24-hour period between stays. Housekeeping staff may enter the property in the 24-hour period provided they have proper PPE. Quite frankly, I’m out working in this STR environment showing rental units and units adjacent to rental units. Most of this is being followed, but some of it isn’t. I wonder if the STR industry won’t move towards mandating guests bring their own bedding and towels and what ever kitchen supplies they intend to use. That would sure make it easier on them.
The community wide drumbeat of less marketing and more clean-up is getting louder and louder. The territorial nature of many local residents, especially younger ones, is very impressive. Like nothing I have ever seen in this community. They have exhibited a collective intolerance for visitor’s trash, bad behavior and graffiti. All of which has shown up with the volume of visitors and many (clueless) first-time visitors. Mammoth is a small town and it is a hard place to hide. Negative behavior on a consistent basis gets noticed and dealt with. New community values are being established during this crazy time. May it continue.
Many prudent STR owners are asking if they should raise their nightly rental rates. Or raise rates across the whole industry. After all, “everything is being repriced.” This is a marketing discussion we should be having but the MLT (Mammoth Lakes Tourism) wonks won’t have. Their jobs are increasingly on the line. The theory of pricing function is Marketing 101. For decades the summer rentals were a give-away. In the past few years demand and rates have risen. Now may be the time to bump them up 10-20% and see what happens. The community wants quality not quantity at this point. Every property owner and business has the right to seek economic efficiency and effectiveness. Gross rental volumes and TOT could actually rise and the crowd might be far more manageable, and tolerable. Mammoth has clearly met the law of diminishing returns. The Airbnb algorithms aren’t necessarily working for the Mammoth community.
Town Council member John Wentworth has a strong recreational and environmental streak and has been up in the Lakes Basin volunteering as a community liaison. This is good. Rather than seeking some solitary trail he can see the situation first hand and see what the real issues are. He’s also been a strong proponent of handing MLT millions and millions of dollars for marketing. Maybe he can be the leader of the changes ahead?…. And after a satirical article in The Sheet about the closed Mammoth Visitor’s Center a couple of weeks ago, the Center is now reopened. So maybe the folks at The Sheet will become the thought leaders in the community?
Speaking of the Council, there will be two seats up for election in fall. One incumbent will not run. Based on the four candidates running, it will be inevitable that the Council will be comprised of at least two women, maybe three. One candidate works in the local Hospital administration. I can’t wait to hear what she has to say. Another candidate has worked in the Town’s finance department for 20 years. I really can’t wait to hear what she thinks. The third works in the lodging industry. The running incumbent is a long, long-time local resident and part of the “good old boy” past of Mammoth. His days may be numbered. I think these other candidates are part of the new direction.
And yes, the old La Sierra building on Main Street was torn down this past week (see above). It isn’t completely hauled away but will be in the coming weeks. One less eyesore and liability in town.
Selling Snowcreek remains the theme of the summer of 2020. Agents are pounding the owners with mailers and agents are soliciting other agents for leads on any upcoming listings. I was out showing the 1 bedroom units last weekend; there were three on the market. Today they have all gone to escrow. The Snowcreek units closed during the period; #602, #306, #1121, #971, #720, #1325, and #728.
Forest Creek #21 closed for $407,500. These are interesting 2 bedroom / 3 bath townhomes that feature atriums that originally had private spas and also large kitchens with plenty of entertainment/bar space. They also have freestanding fireplaces so no fireplace reconstruction hassles. But the project currently has a small black eye; three units were destroyed by fire this past winter and the owners are apparently going to have to replace their electric heaters in the units. Sometimes things like this create buying opportunities.
Favorite New Listing for the Period
Horizons Four is a condominium project in the center of town on Meridian Blvd. It has a long history of nightly rentals and a faithful following. Over the years “everybody” has stayed there. The units were built in the early 1970s and have a variety of upgrades. Here is the most outrageously upgraded unit in the project and it has a strong rental history too. This is a 2 bedroom + loft / 3 bath unit. The finish quality of the remodel is what you would find in a ~$1.5M home here in Mammoth. This is “turn-key” and ready to continue on the rental program. The extra features of the property include a pellet stove fireplace, a stack washer/dryer, a jet tub in the main level bathroom, and built-in cabinetry in all three sleeping areas. Beautiful solid wood doors and durable surfaces everywhere. Here is a link to the video virtual tour.
Listed at $639,000
Other Real Estate News
• Surprisingly, Airbnb’s public offering may be back on track. Pre-Covid the company was humming along towards their IPO. Like so many “unicorns” they had solid revenues but were losing lots of money. But their IPO potential was good. Investors would pile in. Then the Covid disaster struck. The business has taken a big hit internationally and they have made significant layoffs. Their estimated valuation was $31 billion pre-Covid. Now it is $18 billion. Makes me wonder why they are rushing to get the IPO completed. They have waited patiently in the recent past, now they seem to be in a hurry. I wonder what their industry data is telling them.
Meanwhile some of my favorite Internet Airbnb consultants have just come out with new book Airbnb for Dummies. It might be the best $20 a STR owner might spend. My copy is due to arrive at any time. Regardless of Airbnb’s fate, the information has to be invaluable to any STR owner/operator.
• The Mammoth real estate market’s high level of activity is apparently being mirrored in Lake Tahoe. Especially on the Nevada side. All of the same dynamics are playing out; parents working from home, kids going to school online, people fleeing the big city, the drive-to aspect, etc.. And apparently the summer crowds are insane too.
• And to echo all of this, Zillow is reporting all-time record traffic on their website. I have explained to many people my observation that “many people are on the move.” For Mammoth that means movement both into and out of the community. I am seeing more 1031 tax-deferred exchanges since the 2003-2005 era. The local escrow companies, inspectors, and appraisers are all buried in work. Interesting times and marketplace.
Now I have to get back to work!! Thanks for reading, stay healthy!